El Caribe editorial today says that the present government is guilty of setting off a time bomb with a short wick given its debt spree with Spanish private banks for US$443 million in barely 10 months in office. The lenders are primarily private banks, but El Caribe says the Spanish government is behind the deals and provides export insurance to these banks. One of the deals also directly involves several Spanish government ministries. Merca Santo Domingo is a company under the Spanish ministries of Agriculture and Finance.The Dominican government has contracted a US$143.3 million loan with Deutsche Bank, Sociedad Anonima Española to build marketplaces and cold storage warehouses throughout the country as part of the Merca Santo Domingo project to be implemented by the Ministry of Agriculture in the DR. El Caribe says that since the loans do not have grace periods, they will have to be repaid by the present government. The newspaper forecasts that in two or three years the government will be issuing sovereign bonds to pay these private banks. Likewise, the newspaper warns that when the government finds itself hard pressed to pay, the Spanish banks will exercise pressures that may affect the nation’s principal source of tourism income. That’s because Spanish companies are the main investors in the DR’s tourism industry. El Caribe’s editorial writer may be exercising wishful thinking when he hopes that the President will think again and stop the projects that have not yet been started among the 26 that have been approved or are pending approval by Congress. El Caribe points out that Belgian and Italian banks are jumping on the ‘lend-to-the-Dominican-government’ bandwagon. The newspaper reminisces about the time when legendary editorial writer Rafael Herrera would ask a “stupid question.” “We could ask some idiotic questions. For example, which law stops US suppliers from competing in this bacchanalia of borrowing?” [US law requires transparency in business deals, not a requirement for most other countries.]
