Santo Domingo.- State-owned Reservas bank administrator Vicente Bengoa affirmed Sunday that the International Monetary Fund (IMF) has the government on its knees, even when the Dominican economy is among those of highest growth and stable in Latin America.
The official said despite the 2009 crisis the country’s economy grew 3.5%, while those of Central American nations declined.
Bengoa also affirmed that the PetroCaribe agreement with Venezuela, contrary to the ties with the IMF, is one of solidarity, and called on the Dominican people to pray for president Hugo Chavez’s health. “The PetroCaribe contract has greatly helped Dominican Republic in exchange for nothing, it’s a contract of solidarity, unlike the IMF which has the government on its knees, demanding more taxes on the Dominican people, which imposed a Capitalization Law that forces giving RD$18.0 billion to the Central Bank this year, and more than RD$24.0 billion next year, a totally absurd thing.”
Bengoa added that when the international financial crisis was unleashed in 2008, a barrel of crude reached almost US$150 in June and averaged more than US$80 throughout the year, “we were able to face the difficult situation thanks to the US$520 million payment from PetroCaribe.”
From: Dominican Republic, vieja Santo Domingo
This statement has sounds of half truths . We did wonderfully well in 2009 with economic growth, not because of PetroCaribe but because the G20 meeting in London directed the IMF to give the poorer countries loans at very cheap rates, using drawing rights of the richer nations, so the economic crisis would not impact too much on the poorer countries who were really just innocent bystanders in the crisis.
With these cheap loans the DR spent large amounts on infrastructure around the country but probably also used the money to pay normal expenditure that should be paid from tax revenue ..The IMF has become quite aware of the pathetic nature of tax system here and has sought to tighten it up ,,,but it is very difficult when there is no proper compliance system in place and so much tax is avoided ...That is why the tax imposition falls most unfairly on those areas where the government has some ability to ensure it is paid. It is not the fault of the IMF , but of the government,
From: Dominican Republic, vieja Santo Domingo
I should also add that if the government introduced budget cuts as most other countries are doing instead of spending handreds of millions of dollars on jet setting trips , then the need for the IMF to step in would be less. The hotel and air travel expenses for the last jaunt to the Middle East and to Paris which was for more than 50 people must have been many of millions of dollars
Written by: generoso, 4 Jul 2011 8:33 AM
From: United States, Quisqueya
An irresponsible statement coming from an irresponsible minister, blaming the IMF for the increasing troubles of the DR.
The DR came to the IMF, not the other way around. The IMF provides money under their strict banking terms, with their own set of rules. Countries can just say no, and walk out.
This axiom that the DR government is on "its knees" is so ridiculous. The PLD government is on its knees, but more likely on its belly, after a long "parranda" with borrowed moneys, because of the splurge and inefficiency of their many empty suit ministers like Mr. Bengoa.
The memory of a Vicente Bengoa with a bottle of expensive wine in one hand and a gun in the other, making a scene at an all inclusive hotel in Bayahibe, while looking for his mistress, still lingers in my mind.
And regarding Chavez, he is another idiot for throwing Venezuelan oil money around, like it belonged to him, for a possible future political alliance.
From: Dominican Republic, vieja Santo Domingo
I totally support the statement from generoso about Chavez throwing the Venezuelan money around with the Petro caribe contract ....it is a wonderful contract for the caribbean countries but how can it help the Venezuelans whom he leads,, I believe that in some countries the contract has been renogiated on even better terms for the benefiting countries but not here .
i do not know if the PLD is iriendo a parranda with the borrowings but I suspect that at least some of it has not been wisely spent .
From: Dominican Republic
Excuse me I found something else.
The high cost of the President's travels
Acento.com.do reports on the hotels and flights that push up the cost of President Leonel Fernandez's travels abroad. In a report, the online newspaper lists details of the hotels where the President and his committee stayed and the private flights taken during the last trip that took him to Spain, Jordan, the Palestinian Authority, Israel, France and the USA. Acento reports that there were 55 people in the presidential delegation, of whom 45 were special guests of the President and First Lady Margarita Cedeno de Fernandez. The hotels included the Villamagna and Arts Barcelona.
The Fernandez administration has been ranked second of 139 counries for wastefulness of government spending by the World Economic Forum in its 2010-2011 Global Competitiveness Report.
From: United States, words of wisdom from the nutcracker
the whole south america and caribeen countries are all cueros of the imf .
From: United States
masterfully stated, General Generoso. most of the problems are of the government´s making. maybe, spending a fortune on a parking garage for students who do not own many cars, is just another indication of why we are on our knees. oh, yes...salaries for 10 deputy ministers of SPORTS.
Written by: Atabey, 4 Jul 2011 11:18 AM
From: United States, NYC
"The IMF has become quite aware of the pathetic nature of tax system here and has sought to tighten it up ,,,but it is very difficult when there is no proper compliance system in place and so much tax is avoided ...That is why the tax imposition falls most unfairly on those areas where the government has some ability to ensure it is paid. It is not the fault of the IMF , but of the government,"
-Ricardolito
Yes, and many Latin nations and others, check out Greece!, share the same tax compliance problem. People have avoided paying taxes for generations, its culturally ingrained and unless this picture changes DR will not get out of its fiscal mess. But all the expenditures need to be backed by stronger tax compliance overall and the property registration system now working itself into through the system-I'm not sure when it's suppose to come on line-will begin to address some of the major fiscal concerns. There are no free lunches.
From: United States
So Vicente get off the IMF tit. The DR wouldn't last 4 years.
And whatever happened to the "quasi deficit" USD $1B Banniter bank corruption?
The DR has conveniently ''forgot' about it with that Groundhogs day mentality.
From: Canada
Open handed no strings attached oil from Venezuelan communists or on your knees IMF rope around your neck capitalism ...
What if DR profits went into education and the long term health of the country was projected out 40 years into the next working generation ...what if ...
Written by: juanb, 4 Jul 2011 11:34 AM
From: Dominican Republic
Theses guys should wear knee pads. They never get off their knees
The facts are that the economy is no where near as healthy as the gov't says.
Most of the income the govbernent collects is wasted or stolen so it doesn't matter how much is taken in.
The newest, most odious round of taxes imposed will convince the IMF to keep lending.
However, as history shows the gov't will just continue its profligate ways and we will wind up in the same position when the accord runs out.
On our knees with our mouths wide open.
Written by: generoso, 4 Jul 2011 11:38 AM
From: United States, Quisqueya
From: United States
IMF = Economic Hitmen
Making debt slaves out of the everyone with their fiat, digital, conjure it up out of their a$$ dollars. International bankers rule the world with few exceptions. Next up asset sales to pay back the loans.
Whatever this politician's foibles, the DR already has the IMF noose around its neck. Whoever the new President may be, he will tow the IMF line or else.
From: Puerto Rico
Besides the evil IMF and it's fractional reserve banking scam.( remember they simply transfer a bunch of numbers from one computer to another), I blame the evil people in the RD who made the decision to take all this debt money and line some of their own pockets with it. These evil bankers have all the money they could ever want. What they want more than money is power and control and eventually push their evil agenda on those who are their slaves.They want the whole world.
From: Dominican Republic, vieja Santo Domingo
Molondron ,,thank you for the links and yes Atabey ..our tax compliance problems are the same as they have in Greece where it seems few pay the taxes they owe ..Luckily our borrowings are far less than those of Greece and our banks are in a stronger position.
Written by: Atabey, 4 Jul 2011 4:12 PM
From: United States, NYC
Rich,
I'm all for having a sensible or prudent domestic investment strategy in DR. Where funding for all the various and long needed sectors are adequately met. But I understand too that our needs in DR are enormous. That even if we spent 4% of the PIB, our educational deficit, to point out just one very important sector, would still require vast more funding to get reasonable educational results or achievements. The enormous pent-up needs that require vast spending are the product of many generations of lower than required investments in all these sectors, going back to the Trujillo Era and beyond. The explosive population growth rates during the Trujillo Era and post Era only exacerbated the problems in all these areas or sectors. The collapse experienced during the "lost decade" of the pre-assassination years followed by the post assassination debacle caused further damage to DR's development. And the lack of strong technocratic modernization during Balaguer's
Written by: Atabey, 4 Jul 2011 4:16 PM
From: United States, NYC
first 12 years in office continued the poor state of organization and systematic approach to solving the perennial problems of education, sanitation, electrification, potable water, housing, etc., needed in DR. Sensible family planning schemes to slow down population pressure did not come into play. Also, the lack of forcing through a modern vision of organizing the State apparatus to conform to the modern notions and practices of the late 20th century were not enacted by Balaguer. The corruption that would become even greater under the PRD governments. All these aspects condemned DR to less than expected return over this time period.
The modernization drive and its corresponding technocratic stamp are still in the process of being realized in DR under the LF Administration. Strong + factual statistical tabulations and the all important compliance schemes to generate enough domestic taxation support for the fiscal budget are now being developed. There are no Free Lunches
From: United States Virgin Islands, Virgin Islands (US)
From imgenuine:
"These evil bankers have all the money they could ever want. What they want more than money is power and control and eventually push their evil agenda on those who are their slaves.They want the whole world."
You are absolutely correct. If we in the Caribbean and Latin America would only look at the big picture, we would realize that what we take for granted and despise, millions of people from Europe and North America want. Among them are a relatively small group of people who are driven by their own delusion of superiority. They are deceived by their own conceit and so they seek to re create the feudal system that existed in Europe 1,000 years ago. They are experts at using fiat "money" to manipulate governments and the economies of nations for their own profit. Now they desire more for as yourightly said. "They want the whole world ."
Written by: juanb, 4 Jul 2011 6:10 PM
From: Dominican Republic
Here's what they have done with our tax money so far:
6.09 Prevalence of trade barriers ..................................................121
2.01 Quality of overall infrastructure .............................................1112.07
Quality of electricity supply ...................................................132
4.09 Quality of primary education .................................................137
5.03 Quality of the educational system.........................................133
Written by: juanb, 4 Jul 2011 6:13 PM
From: Dominican Republic
Here's how:
1.03 Diversion of public funds.......................................................134
1.07 Favoritism in decisions of government officials ....................139 (out of 139)
1.08 Wastefulness of government spending ................................138
It just goes on and on, ad nauseum.
Written by: RoyStone, 4 Jul 2011 6:34 PM
From: Australia
3.5% growth in the economy - is that in Pesos?
The value of the Peso drops far more than that against most other currencies.
In the last 12 months it has dropped from
0.0215 Euro to 0.0180 Euros, a drop of over 16%
0.036 Aus Dollar to 0.024 Aus Dollar a drop of 33%
0.049 Brazilian Real to .041 Brazilian Real a drop of over 16%
From: United States
absolutely right, Roy. which translated in a fall in the GDP PPP. that is what counts, not nominal GDP. factor in inflation, and see what the real picture is. as for the guys who are railing against the IMF. i myself am aware of the misery occasioned by structural adjustment directives. however, if you do not want to be saddled with them, the answer is simple....do not go to them for money.
Written by: RoyStone, 4 Jul 2011 8:53 PM
From: Australia
The Dominican economy not doing as bad as Central American Banana Republics is hardly something to boast about. Probably doing better that Haiti too .... wow!
Live it up now and pay later (or never if possible) is Dominican tradition. Why should the government do otherwise? Don't borrow what you can't afford to pay back. Payback costs are high due to a plummeting Peso and a poor credit rating. Okay, the rating has been worse, but that does not make it good.
From: Canada
Molondron. ... dr administration is second worst of 139 countries???
From: Dominican Republic, vieja Santo Domingo
since when can you change a peso into an australian dollar or brazilian real ?? ,there is no exchage rate between the currencies nor is there any significence,,you may just as well say we have been devalued against the thai baht or the mongolian ram . And the figure against the euro depends on what dates you use . ,,so what Roy Stone writes is not important ,In fact there have been few countries who can show that their groth was higher than their inflation in the last 6 months .
As most of the contracts for Dominican exports and imports are in US dollars , the US dollar exchange rate is very important .
And the borrowings from the IMF are only about half the sovereign borrwings and when you look at the borrowings of the private sector ,,you can see that the IMF has no one on their knees .
the loans from the IMF were at very low interest rates and were taken up by numerous developing countries ...the problem comes in the roll overs at worse rates.
Written by: Tommy, 5 Jul 2011 12:21 PM
From: Canada, Northern Ontario
True about the US!
Our Peso has not really changed much in relation
with the US $ in 2-3 years!
Have a great DR dias!
From: United States
it has not changed in relation to the dollar, because it is pegged. but, since the dollar has fallen relative to other currencies, it has done the same.
Written by: RoyStone, 5 Jul 2011 8:00 PM
From: Australia
Ricardolito, the plummeting rate of the Peso against the Australian dollar could make Australia a very good source of tourists for the Dominican Republic - much better than Kazakhstan (where Leo has been sprooking).
Please explain to me, if the Peso and the economy is doing so well, why is there so much grumbling on this site about escalating prices in the Dominican republic?
Of course roll-over rates are high - if you can't or won't pay off the initial loan, you are a bad risk.
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With these cheap loans the DR spent large amounts on infrastructure around the country but probably also used the money to pay normal expenditure that should be paid from tax revenue ..The IMF has become quite aware of the pathetic nature of tax system here and has sought to tighten it up ,,,but it is very difficult when there is no proper compliance system in place and so much tax is avoided ...That is why the tax imposition falls most unfairly on those areas where the government has some ability to ensure it is paid. It is not the fault of the IMF , but of the government,
An irresponsible statement coming from an irresponsible minister, blaming the IMF for the increasing troubles of the DR.
The DR came to the IMF, not the other way around. The IMF provides money under their strict banking terms, with their own set of rules. Countries can just say no, and walk out.
This axiom that the DR government is on "its knees" is so ridiculous. The PLD government is on its knees, but more likely on its belly, after a long "parranda" with borrowed moneys, because of the splurge and inefficiency of their many empty suit ministers like Mr. Bengoa.
The memory of a Vicente Bengoa with a bottle of expensive wine in one hand and a gun in the other, making a scene at an all inclusive hotel in Bayahibe, while looking for his mistress, still lingers in my mind.
And regarding Chavez, he is another idiot for throwing Venezuelan oil money around, like it belonged to him, for a possible future political alliance.
i do not know if the PLD is iriendo a parranda with the borrowings but I suspect that at least some of it has not been wisely spent .
You gentlemen may find these articles interesting, if I am reading your commentary correctly.
http://www.acento.com.do/index.ph....ujos-y-comodidades-de-jeques.html
http://www.acento.com.do/index.ph....-10-anos-de-Leonel-Fernandez.html
http://www3.weforum.org/docs/WEF_....CompetitivenessReport_2010-11.pdf
The high cost of the President's travels
Acento.com.do reports on the hotels and flights that push up the cost of President Leonel Fernandez's travels abroad. In a report, the online newspaper lists details of the hotels where the President and his committee stayed and the private flights taken during the last trip that took him to Spain, Jordan, the Palestinian Authority, Israel, France and the USA. Acento reports that there were 55 people in the presidential delegation, of whom 45 were special guests of the President and First Lady Margarita Cedeno de Fernandez. The hotels included the Villamagna and Arts Barcelona.
The Fernandez administration has been ranked second of 139 counries for wastefulness of government spending by the World Economic Forum in its 2010-2011 Global Competitiveness Report.
-Ricardolito
Yes, and many Latin nations and others, check out Greece!, share the same tax compliance problem. People have avoided paying taxes for generations, its culturally ingrained and unless this picture changes DR will not get out of its fiscal mess. But all the expenditures need to be backed by stronger tax compliance overall and the property registration system now working itself into through the system-I'm not sure when it's suppose to come on line-will begin to address some of the major fiscal concerns. There are no free lunches.
So Vicente get off the IMF tit. The DR wouldn't last 4 years.
And whatever happened to the "quasi deficit" USD $1B Banniter bank corruption?
The DR has conveniently ''forgot' about it with that Groundhogs day mentality.
What if DR profits went into education and the long term health of the country was projected out 40 years into the next working generation ...what if ...
The facts are that the economy is no where near as healthy as the gov't says.
Most of the income the govbernent collects is wasted or stolen so it doesn't matter how much is taken in.
The newest, most odious round of taxes imposed will convince the IMF to keep lending.
However, as history shows the gov't will just continue its profligate ways and we will wind up in the same position when the accord runs out.
On our knees with our mouths wide open.
Thank you Molondron for the heads up on the very enlightening articles.
Professor Dreadlocks, I would like your opinion on this report:
http://www3.weforum.org/docs/WEF_....CompetitivenessReport_2010-11.pdf
Making debt slaves out of the everyone with their fiat, digital, conjure it up out of their a$$ dollars. International bankers rule the world with few exceptions. Next up asset sales to pay back the loans.
Whatever this politician's foibles, the DR already has the IMF noose around its neck. Whoever the new President may be, he will tow the IMF line or else.
I'm all for having a sensible or prudent domestic investment strategy in DR. Where funding for all the various and long needed sectors are adequately met. But I understand too that our needs in DR are enormous. That even if we spent 4% of the PIB, our educational deficit, to point out just one very important sector, would still require vast more funding to get reasonable educational results or achievements. The enormous pent-up needs that require vast spending are the product of many generations of lower than required investments in all these sectors, going back to the Trujillo Era and beyond. The explosive population growth rates during the Trujillo Era and post Era only exacerbated the problems in all these areas or sectors. The collapse experienced during the "lost decade" of the pre-assassination years followed by the post assassination debacle caused further damage to DR's development. And the lack of strong technocratic modernization during Balaguer's
The modernization drive and its corresponding technocratic stamp are still in the process of being realized in DR under the LF Administration. Strong + factual statistical tabulations and the all important compliance schemes to generate enough domestic taxation support for the fiscal budget are now being developed. There are no Free Lunches
"These evil bankers have all the money they could ever want. What they want more than money is power and control and eventually push their evil agenda on those who are their slaves.They want the whole world."
You are absolutely correct. If we in the Caribbean and Latin America would only look at the big picture, we would realize that what we take for granted and despise, millions of people from Europe and North America want. Among them are a relatively small group of people who are driven by their own delusion of superiority. They are deceived by their own conceit and so they seek to re create the feudal system that existed in Europe 1,000 years ago. They are experts at using fiat "money" to manipulate governments and the economies of nations for their own profit. Now they desire more for as yourightly said. "They want the whole world ."
6.09 Prevalence of trade barriers ..................................................121
2.01 Quality of overall infrastructure .............................................1112.07
Quality of electricity supply ...................................................132
4.09 Quality of primary education .................................................137
5.03 Quality of the educational system.........................................133
1.03 Diversion of public funds.......................................................134
1.07 Favoritism in decisions of government officials ....................139 (out of 139)
1.08 Wastefulness of government spending ................................138
It just goes on and on, ad nauseum.
The value of the Peso drops far more than that against most other currencies.
In the last 12 months it has dropped from
0.0215 Euro to 0.0180 Euros, a drop of over 16%
0.036 Aus Dollar to 0.024 Aus Dollar a drop of 33%
0.049 Brazilian Real to .041 Brazilian Real a drop of over 16%
Live it up now and pay later (or never if possible) is Dominican tradition. Why should the government do otherwise? Don't borrow what you can't afford to pay back. Payback costs are high due to a plummeting Peso and a poor credit rating. Okay, the rating has been worse, but that does not make it good.
As most of the contracts for Dominican exports and imports are in US dollars , the US dollar exchange rate is very important .
And the borrowings from the IMF are only about half the sovereign borrwings and when you look at the borrowings of the private sector ,,you can see that the IMF has no one on their knees .
the loans from the IMF were at very low interest rates and were taken up by numerous developing countries ...the problem comes in the roll overs at worse rates.
Our Peso has not really changed much in relation
with the US $ in 2-3 years!
Have a great DR dias!
Please explain to me, if the Peso and the economy is doing so well, why is there so much grumbling on this site about escalating prices in the Dominican republic?
Of course roll-over rates are high - if you can't or won't pay off the initial loan, you are a bad risk.