Interviewed on Channel 11 TV’s El Telematutino program yesterday, economist Bernardo Vega criticized what he described as excessive governmental spending. He said that President Leonel Fernandez has followed his predecessor, President Hipolito Mejia’s example. He addressed the increased the public payroll and spending despite President Leonel Fernandez having told the nation in his inaugural speech that he would apply austerity.
Vega said that while the government has improved its revenue collection mechanisms, “what it is not doing is spending it well,” as reported in Hoy. He commented that no one in the PLD administration remembers the example of austerity set by party founder Juan Bosch. He said that the day after Bosch was sworn in, he fired several government workers, and served coconut water instead of expensive beverages in the Presidential Palace.
Vega expressed disappointment at the fact that public investment is focused on non-priority works such as the Santo Domingo metro instead of small projects needed by communities.
He recommended that the government enter into a “shadow program” with the IMF, which does not include financing, and thus does not impose strict conditions.
Vega says that the Dominican tax system is regressive, and the poor pay relatively more taxes on their income compared to the rich. For instance, he mentioned that under Law 158-01, if someone purchases a tourism property and sells it two years later, even if they doubled their income, they do not have to pay taxes. On the other hand, most consumer goods are taxed a hefty 16%.
Vega forecasts a high abstention rate in the 2008 presidential election. He says the candidates’ lack of political programs make the election less attractive to non-partisan voters. He forecast, nevertheless, that lots of money would be spent on the campaign, which he described as insipid. He predicted that the vote would go for Fernandez because the alternative he considers very bad.
Vega said that the PLD decision to attract second and third party leaders to the reelection cause creates the impression that the government is desperate for votes and that the quality of government is deteriorating. He believes the government loses more votes than it gains with the move. He commented that the people would like there to be a change in the quality of government officials, but this was not achieved with the changes. “On the contrary,” he said. He singled out the case of former Environment Minister Max Puig. “What a way to reward the one who fought for the national interest!”