The International Monetary Fund is just waiting for the approval of the Fiscal Reform and the 2013 Budget before embarking on the process of signing a new agreement with the Dominican Republic. As soon as these two items are taken care of the IMF expects to begin examining a letter of intent that will force the country to seek economic discipline since it is facing a RD$187 billion deficit.
It should be recalled that an IMF mission visited the country in September and held discussions with President Danilo Medina and his economic team, as well as with business leaders and political, social and even religious leaders. Their diagnosis indicated that the local situation was complicated by the electricity sector that caused a US$1.8 billion setback for the economy.
According to rumors, the new agreement will be of the stand-by category and last for 28 months and bring in some US$2 billion.
Such an agreement would require, according to El Nuevo Diario, a reduction in government spending, the elimination of government entities, a tax increase, and the elimination of tax exemptions and incentives to the private sector which this year total RD$118 billion.
The government is holding public debates on the taxation reform through the Economic and Social Council (CES) but legally can impose its own decisions given that the ruling PLD party is majority in Congress.