In an interview with Diario Libre on 30 August 2015, economist Eduardo Garcia Michel summarized several of the major challenges ahead.
He says that while the three years of the Danilo Medina administration could be described as positive for economic growth, the public does not share this perception and the country’s foreign debt continues to grow significantly.
In addition to the trust in the economy the government has created, Garcia Michel says that its other key accomplishments include the progress made in education with the classroom construction program and daycare centers. He also praised the construction of new roads and city bypasses to benefit urban populations and tourism in areas like the east and in Santo Domingo.
Nevertheless, he says this has not been enough to bring about change in the country. “One cannot continue on the economic path the country has taken, which this administration inherited and has not changed,” he told Diario Libre journalists.
The economist called for changes, including to the continuous taking on of debt. He said that debt levels are now unsustainable.
“This country has become accustomed to receive, as if addicted, US$4 to US$5 billion to finance the public sector, cover the deficit and pay for past debts,” he commented. He called for creating new revenue sources, including purging the public finances to generate considerable surplus and diminishing the debt coefficient in relation to the GDP, and servicing the debt in relation to tax revenues.
Garcia Michel said the electricity sector is draining government funds. “There is no sense in maintaining the system, which is part of the deficit, and which demands more than 1% of the GDP,” he commented, highlighting that the talks for the Electricity Pact are in process.
He called for a change of the paradigm of the Dominican economy, which although growing, people do not perceive the growth. He said that real wages have been declining for the past 15 years and that the mass migration of undocumented workers has depressed wages, especially in the farming and construction sectors.
He also questioned the wisdom of continuing to allow the cargo and passenger transport unions to hold monopolies, which leads to real chaos.
Garcia Michel said that despite a decline in quality in the telecom sector, no one has protested or made any complaints.
He said the export deficit is evidence the country is not competitive.
An economy cannot grow without savings and investments that he says are not sufficient in the DR.
The economist commented that in the monetary sector, there is a large snowball that is growing, the quasi-fiscal deficit, and if previsions are not taken could become an avalanche.
He called for a general reform of social security coverage.
“We cannot conform and say that all is well with the economy when there are so many problems deep down that are not touched upon or even mentioned,” he concluded.
http://www.diariolibre.com/opinion/dialogo-libre/hay-avances-en-la-economia-pero-todavia-no-es-suficiente-NF1070539