PLD Presidential candidate Leonel Fernandez urged yesterday that the government implement the necessary fiscal reform without delay. The government’s economic team had announced the measures would be postponed until July 2004, two months after the Presidential election. “We request that the government stop using these band-aids of improvised measures, and that we undertake the complete reforms for the welfare of the country,” stated the former President during a luncheon for the Dominican-Canadian Chamber of Commerce. Fernandez said that the sources of funding of the present fiscal deficit need to be identified, including the revenues that will cover the quasi-fiscal debt of RD$21 billion generated by the savings certificates issued by the Central Bank this year. Fernandez criticized the imposition of measures such as the temporary increase in customs’ exchange rate surcharge from 4.75% to 10%, the pending 5% tax on exports and the 2% surcharge on imports, among others.
As reported in Hoy newspaper, the former President said: “This country needs the tributary reform to happen now, in November, but the government, which is responsible for the economic problem, is not assuming that responsibility and plans to postpone discussions of reform until after the electoral period.” Fernandez feels the Mejia government would not undertake the reforms either if it lost the election in May 2004. In Fernandez’ view, the recent collapse of various banks is an indication that the authorities need to establish rigorous mechanisms to regulate banking in the private and public sectors. He explained that the present debt of the government with private banking institutions has surpassed RD$17 billion and the Central Bank will have to dish out RD$21 billion in 2004 on the savings certificates it issued this year. Furthermore, he said, the high interest rates being charged by the commercial banks are a restraint on the development of business in general.