Former manager of the Central Bank, economist Pedro Silverio Alvarez writes in an op-ed piece in Diario Libre on how the 2019 National Budget worsens the situation of weak Dominican institutions. Silverio observes that the 2019 budget reproduces the same institutional weaknesses of previous budgets.
He says the bill highlights the irresponsibility of the political leadership that prefers to resolve problems in the easiest way, and not deal with the need to reform outdated special laws. He mentions as an example, that Article in the 2019 National Budget Bill authorizes the Executive Branch to adjust downward the percentages that laws in effect allot to the Central Electoral Board (JCE), the National Congress, the Judicial Branch, the Attorney General Office (PGR), the Chamber of Accounts, the UASD university, city governments, Ministry of Youth, National Council for Children and Teenagers (Conani), the Customs Agency (DGA) and the Tax Agency, and the Presidency (Arts. 32 and 33 of Law 423-06).
He also observes that Art. 26 of the 2019 National Budget authorizes the Executive Branch to modify Art. 6 of the Central Bank Recapitalization Law 167-07. Art. 53 of the budget bill authorizes the Executive Branch to determine the proportion of the public debt that will be issued in pesos and in dollars. Art. 59 authorizes the Executive Branch to sell shares or participation in public enterprises for up to US$150 billion without having to submit the project for congressional approval. The same article authorizes the Ministry of Hacienda to carry out amendments to the budget related to these operations.
Silverio says these inclusions in the 2019 National Budget Bill evidence institutional and quantitative fragility. He presents the example of how a chapter has been included named Reductions in Payables (Disminucion de Cuentas por Pagar). He says it is suspect that the account is to be used to disguise the real values of the fiscal deficit.
Silverio also criticizes that the government does not include a budgetary reserve chapter for public calamities. He said the chapter is not included for 2019 or for the following years. But then the government’s solution is that the bill authorizes the Ministry of Hacienda to contract financing for the management of natural disasters for US$300 million. “This is a good example of how taking on public debt is always the easier solution, while not the most efficient.”
Silverio concludes:
“The government has become accustomed in great measure to solve the problems by taking on more public debt. This creates other problems, potentially greater ones. As an example, five years ago the government dedicated around 36% of the tax revenues to cover the debt of the public debt. For 2019 it is estimated that the service of the public debt will use up around 47% of the tax revenues, even when tax revenues have been growing 15% on average every year. If that is sustainable, someone will have to explain,” he concludes.
Read more in Spanish:
Diario Libre
19 November 2018
