The Dominican Republic has failed to provide the information on eight of the points set out in the International Monetary Fund letter of intent, but, during the first two reviews of the agreement, it has asked for extensions or permission to provide the data at a later date. According to Diario Libre, the new letter of intent that will be signed on 17 October also includes the requests for the dispensations. These requests are found in paragraphs 2, 12, 13, 15, 16, 19, 24, and 25 of the report on the first and second reviews of the IMF agreement. Much of the failures were in providing the data requested by the IMF. In the first case, an economic report due in October on September’s economic behavior will feed into the third review towards the end of this year. The Dominican economic team of Hector Valdez Albizu, Temistocles Montas and Vicente Bengoa reported to the IMF director general Rodrigo de Rato, that the redesign of the institutional and fiscal control framework was very complex on the one hand and the delay in legislative projects before the National Congress on the other, have caused the team to request an extension of the deadlines. Another area requiring an extension was the data concerning late payments of the public debt, including the volume of the debt. The problem seems to be a lack of documentation concerning the debt as of the end of 2004, both on the part of public officials as well as private suppliers who have not turned in the legal documents required.
In spite of all this, Franco Uccelli, the Bear Stearns Investments specialist on the Dominican Republic says that the IMF will approve the Letter of Intent that the DR submitted to the IMF board of directors. Uccelli did emphasize that there were several major challenges ahead for the nation. In his report, Franco Uccelli says that the letter of intent was drawn up to coincide with the end of the first and second reviews of the current IMF program in the Dominican Republic. Uccelli says that a large part of the letter “was astutely communicated to the financial markets by the Fernandez administration as part of their efforts to manage expectations, and because of which there are few surprises in the new document.” The official forecast for the 2005 GDP was raised from 2.5% to 4%, inflation was reduced from the 11% – 13% range to single digits (the Central Bank is talking about 6% – 8%), the surplus in current accounts was reduced from 2% to 1.6%, and the goal of the non-financed public sector was increased slightly from 0.7% to 0.8% of the GDP. Uccelli sees the Dominican Republic with good reason to celebrate the upcoming signing of the new IMF agreement.