In an op-ed piece in Diario Libre today, Friday 21 November 2014, former Central Bank general manager, economist Pedro Silverio Alvarez comments that when the International Monetary Fund “in its politically correct language” urges the government to “improve its fiscal consolidation” or increase taxes to reduce the deficit so it does not have to reduce capital spending, it ignores the current levels of expenditure. <\/p>\n
He comments that from January to September 2014 the Medina administration added 25,000 employees to the central government payroll. “If the government had frozen the payroll, even without firing anyone, to the level of 2012 when taking possession, it would have meant RD$35 billion in savings in 2015,” he writes. He continues: “Nevertheless, the IMF prefers to ignore that reality and instead suggests increasing taxation so that the government may need to borrow less from abroad. ”<\/p>\n
Silverio stresses that the IMF does not mention the local debt the Medina government has taken on. “Put in another way, the important thing is for the government to meet its foreign commitments. Issuing debt n both of the central government and the Central Bank n is not a problem that seems to concern the IMF mission. <\/p>\n
He criticizes the IMF for omitting to mention the need for the government, including autonomous and decentralized organizations, to have a single debt issuer, which in this case would be the Ministry of Hacienda as has been recommended by international organizations.<\/p>\n
Silverio comments that an increase in taxation does not guarantee that the debt will be more sustainable, and will only increase the government’s appetite for taking on additional debt. <\/p>\n
“A taxation increase will only guarantee that the middle class will continue to be hard-pressed due to the high tax burden that it will inevitably have to bear. “That is why we have the middle class that has made the least progress over the past decade in Latin America.”<\/p>\n
http:\/\/www.diariolibre.com\/opinion\/2014\/11\/21\/i892191_las-conflictivas-recomendaciones-del-fmi.html<\/p>\n
http:\/\/www.imf.org\/external\/np\/sec\/pr\/2014\/pr14515.htm<\/p>\n
http:\/\/dr1.com\/premium\/news\/2014\/dnews111414.shtml<\/p>\n","protected":false},"excerpt":{"rendered":"
In an op-ed piece in Diario Libre today, Friday 21 November 2014, former Central Bank general manager, economist Pedro Silverio Alvarez comments that when the International Monetary Fund “in its politically correct language” urges the government to “improve its fiscal consolidation” or increase taxes to reduce the deficit so it does not have to reduce … <\/p>\n