Economist Pavel Isa Contreras says the Dominican Republic is already feeling the severe effects of what he estimates is the worst economic crisis to affect the world as we know it today.
In an interview on AN7 TV channel, he said that the drastic restriction of travel and the closing of borders will have a major impact. “Markets are closing, exports do not find markets, there are severe difficulties for the transport of merchandise,” he remarked. He pointed to the extensive supply chain behind the stores, that of wholesalers that supply retailers, agriculture that supplies industry, and more.
“Without doubt there will be a significant reduction in people’s income,” he said. This will be felt the most among those working in tourism, the most affected sector. He said anyone working outside of essential services and health services will suffer. He named export free zones.
He said the impact will worsen with the community spread of the disease as the governments see it necessary to implement extreme social isolation measures and oblige people to not leave their homes.
“Probably all the economy will be affected,” he said. He remarked it took China two months to reopen activities. He forecast many companies will close if the present shutdown of businesses lasts for two months. “Many businesses will not be able to hold out without selling,” he said.
Isa Contreras recommends the government forget about its fiscal deficit. “These are unchartered waters and we do not know how long the suspension may last,” he said. He warned that more than half of Dominican households depend on what the breadwinners bring in with their everyday work. He said those that work in the informal sector do not have any income if they do not work, nor do they have savings.
He called for the government to subsidize the companies so they can keep their employees. He urged the government to make deposits to the accounts of people on the “Comer es Primero” welfare plan, so that they can continue to buy essential goods. He said this measure would complement others being taken by the Tax Agency (DGII) and the Monetary Board, which primarily favor the formal sector. “The government needs to spend lots of money. There is no alternative,” he declared.
Later on Esta Noche con Mariasela, Contreras expanded on the economic topic, urging for actions to protect the jobs of people.
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25 March 2020