Juan de la Cruz writes in El Dia newspaper today on the legacy the Mejia administration will leave the Dominican Republic. He comments that although the country posted an 8% growth rate in 2000 and maintained an exchange rate of RD$16:US$1 in 2000, the DR is altogether another country only four years later. He comments that Fernandez (who was President from 1996-2000) will get back a country with a -0.4% growth rate ? the worst in Latin America ? and an exchange rate of RD$50:US$1. Furthermore, the public foreign debt has doubled, going from US$3.7 billion in August 2000 to US$7.3 billion at present, or 57% of the GDP, when factoring into the equation the buyback of the Edenorte\/Edesur power distributors and other loans from multilateral organizations.<\/p>\n
This is not to mention the high cost of the quasi-fiscal debt, or the nearly RD$80 billion in certificates of savings deposited at the Central Bank, a large number of which are due to expire at the start of the new government, or the capital flight drain of US$3.5 billion and repatriation of foreign investment of US$2 billion. <\/p>\n
De la Cruz also mentions that from 2000-2004 inflation rose 100%. Inflation from December 2002-December 2003, by contrast, stood at 43%, and previous to that accounted for a mere 9.20% in 2000. <\/p>\n
He comments on the recession affecting the local economy that has decapitalized commerce, especially middle-sized business, and made matters difficult for large companies to compete with foreign markets, given the country?s high tariffs. <\/p>\n
According to him, consumers and producers alike have had to pay the high cost of the fiscal deficit and quasi-fiscal debt that represented 5.2% of the GDP in 2003, as well as the salvaging of the Baninter, Bancredito and Banco Mercantil banks. Consumers and producers feel the pain as a result of the government?s penchant for passing these costs on to them in the form of new taxes. <\/p>\n
These new taxes comprised an increase to the exchange surcharge from 4.75% to 10%, a 2% additional tax on imports on top of the 3% import tax, a 25% tax on savings and loans organizations, a 0.15% tax on bank checks, an increase of US$10 to the departure tax, and a 5% tax on the export of goods and services. <\/p>\n
In 2000, the average price of a barrel of petroleum was US$28.9, while today it costs US$41.17, which, combined with the severe currency depreciation, makes fuel costs extraordinarily high. Gasoline has gone from RD$27.90 per gallon in August 2000 to RD$106.70 at present and diesel from RD$18.95 per gallon in 2000 to RD$73.50, entailing increases of about 400%. Propane gas at the end of the Fernandez administration of 1996-2000 stood at RD$6 per gallon, while its current price is RD$25 per gallon, representing a 313% increase.<\/p>\n","protected":false},"excerpt":{"rendered":"
Juan de la Cruz writes in El Dia newspaper today on the legacy the Mejia administration will leave the Dominican Republic. He comments that although the country posted an 8% growth rate in 2000 and maintained an exchange rate of RD$16:US$1 in 2000, the DR is altogether another country only four years later. He comments … <\/p>\n