Reporting on the Dominican Republic for Bear Stearns, Franco Uccelli says that while the country’s prospects have improved, the DR still needs to confront numerous significant challenges to achieve a bullish outcome. He emphasizes that it must first reinstate the IMF agreement to restore credibility to its economic and financial program and so that disbursements from multilaterals may be resumed. He furthermore comments that the expectation is for the agreement to be finalized some time between December and January. He continues his summary to indicate that the government needs to pursue the restructuring of its commercial debt, including its outstanding international bonds, as a way of negotiating its way out of the current liquidity crunch.
On the home front, he points out that the resilient economy is already showing signs of recovery, but highlights that, to begin with, order must be restored to the country’s fiscal accounts in order to offset the previous administration’s financial slippage and to foster the re-establishment of manageable and sustainable fiscal conditions over time. Secondly, the Central Bank’s quasi-fiscal debt burden must be reduced to less onerous levels through the combination of creative and viable liability management operations and the restoration of macroeconomic stability and growth. Lastly, the electricity crisis must be resolutely confronted so that the sector’s red-ink bleeding can be contained and reversed, and the lights may be kept on.