The Dean of the Economic School of the Pontificia Universidad Cat?ica Madre y
\nMaestra, Pedro Silverio, revisits the missteps of the 2003 fiscal managers of
\nthe Dominican Republic. He begins with the exchange crisis left over from 2002
\nthat brought about the US$600-million sovereign bond issuance that was meant to
\nchange the profile of the foreign debts by exchanging short-term, high-interest
\ndebts for long-term, low-interest debts. Silverio says that we now know it was a
\nmean lie to cover up the financial shortcomings of the government to cover its
\nforeign debts. Next came the Baninter debacle, and the monetary authorities had
\nto decide whether to remain within the limits of the law or rush to the aid of
\ndepositors. The path chosen has meant the impoverishment of all Dominicans ?
\nespecially the most disadvantaged. Silverio called the issuance of debased
\ncurrency ?incomprehensible?, considering that macroeconomic deterioration was
\nthe basis for nearly all banking crises. Then along came the IMF and its standby
\nagreement with what, to most observers, were very generous terms. A positive
\nresult was seen in the exchange rate, and things seemed to be moving toward
\nstability. But, as par for the course, the government jumped into the void again
\nwith its unfortunate buyback of the Ede-Norte and the Ede-Sur, and effectively
\ntoppling the IMF deal. And, Silverio adds, just when it looked as though no more
\nmistakes could be made, the Mejia administration demonstrated otherwise by
\nmilitarizing the exchange market and causing the disappearance of hard
\ncurrencies. Silverio says it was this series of errors that prompted The New
\nYork Times to write its editorial asking President Mej?a to spend his final
\nmonths in office working to strengthen the beleaguered Dominican institutions.
\nSilverio, who also heads the Cenantillas think tank department at PUCMM,
\ncomments finally that this plea assumes that President Mej?a knows what to do.
\nBut, he concludes, ?this is a supposition that the majority of Dominicans do not
\nagree with.? For comments, write to silverio@pucmm.edu.do<\/p>\n","protected":false},"excerpt":{"rendered":"
The Dean of the Economic School of the Pontificia Universidad Cat?ica Madre y Maestra, Pedro Silverio, revisits the missteps of the 2003 fiscal managers of the Dominican Republic. He begins with the exchange crisis left over from 2002 that brought about the US$600-million sovereign bond issuance that was meant to change the profile of the … <\/p>\n