The National Council of Business (CONEP) published a paid advertisement in the press outlining its position on the announcement that the country would sign a stand-by agreement with the International Monetary Fund (IMF). CONEP
urged the government to nullify Decree 727-03, which levies a 5% tax on exports. The leading business organization also implored the government not to delay certain economic strategies for political reasons until July 2004. CONEP feels the needed
fiscal reforms should be implemented immediately, accompanied by a general increase in wages in the name of the wellbeing of the entire nation.
Also contained in the statement:
An expression of support for the signing of the agreement, with the understanding it would bring stability to the economy, fresh resources and increased discipline over government spending and better supervision of the national financial system.
Regret that the agreements violate the legal framework and the Constitution as Congress is sidestepped for the imposition of taxes.
A prediction that the violation of the legal framework would create increased distrust and uncertainty, entailing a hard blow to free enterprise, and could affect future investments.
Agreement to continue to make sacrifices, with the belief that an equal share of the burden be shouldered by the government in the form of increased fiscal discipline and the fulfillment of the government?s commitments to the Central Bank to reduce
its quasi-fiscal deficit. Likewise, a supplication that the government put a stop to what it calls unbridled monetary expansion.
The view that the population should have to pay for increases in the power rate as being extremely onerous. CONEP considers the notion of subsidizing the deficit as inappropriate, as the increase in taxes to hard-currency generating companies would
bring a decline in the nation?s exporting capacity and would considerably affect job levels and the competitiveness of the country, resulting in the electrical problem remaining unsolved.
CONEP states that the Dominican economy over the past years has been headed towards trade liberalization to attract new international markets with the signing of free trade agreements, participation in the FTAA negotiations, and now bilateral trade
talks with the United States, which is found to be incompatible with a system of export taxes and described as a mortal blow to the National Competitiveness Plan.
CONEP points to the contradiction in taxing the hard-currency generating companies ? even if only temporary ? as they are those best suited to lead the country to economic recovery in the short term. The strategy of taxing these companies is called
inconsistent, counterproductive and incompatible with the objectives of increasing hard-currency revenues in order to improve the balance of payments.
CONEP criticizes the authorities for basing its measures on an alleged deterioration of the global economy and the collapse of the Baninter bank. CONEP points out that while the weight of the crisis is being levied exclusively on the private sector,
the current situation is instead due to the weaknesses in the governmental banking supervision, whose effects have been made worse by the authorities acting contrary to what is stipulated in the Monetary and Financial Code.