Hacienda Minister Donald Guerrero says the Dominican economic model is working. Guerrero made the statement when interviewed for El Caribe newspaper. He highlighted the high level of growth. “I could say that not only did we grow 7%, but there was growth with price and exchange rate stability, and the reverting in the trend of poverty levels that had practically stagnated after the financial crisis of 2003,” Guerrero told journalists from the El Caribe.
He observed that around 660,000 jobs have been created from 2013 to 2018, and poverty has declined from 49.7% to 25.5%. He said the country generated over US$30 billion in hard currency in 2018. There are around 1,247,000 students in the new all-day curricula schools, and more than 1.8 million students receive food at public schools. In the six-years of Medina administration, more than 19,400 new schoolrooms have been built.
“That is a true social revolution that has lead the economy to exhibit high levels of growth, a matter of pride for the country and of admiration by other nations. That growth has been achieved with stability and by reducing poverty. That is a successful model,” he continued to stress.
He considered the weakness of the Dominican system that taxation is below the average for Latin America. He said the tax burden for 2018 closed at 15% of GDP, when the average for Latin America is 20%. He said there is a need to increase government tax revenues to sustain the social programs. Guerrero advocated for less tax evasion and less tax exemptions and incentives. He said incentives are at present around 5.5% or 6% of GDP.
He defended government spending, saying the Medina administration is one of the most prudent in spending in Latin America. “There are only two countries that are at our level or below, which are Guatemala and Costa Rica. We have – last year – a total spending pressure on the Gross Domestic Product of 17.4%. The average of Latin America exceeds 24%,” he explained.
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El Caribe
4 March 2019