NewsWhore
03-19-2009, 06:40 PM
In a speech on "Building the DR of tomorrow: vision and priorities for the next five years" at The Economist Conference yesterday, President Leonel Fernandez expressed his optimism that the DR would weather the financial storm. He blamed the DR's present economic troubles on the external economic crisis, but he stressed that his administration's goals are to maintain macro-economic stability and reduced inflation while stimulating growth.
He commented that The Economist analysts expect a negative one percent growth for the DR in 2009, but this compares to the Central Bank's 3% growth forecast. He says he is optimistic that growth will be higher. He attributes this to the relief in the lower price of petroleum (down US$2 billion from 2008), food products and some imported inputs, and to major projects under way or soon to be started.
At the conference, President Fernandez presented the panorama of how the world had gone from US$147 per barrel of fuel to US$34 this year. In the DR this meant that from inflation that had been forecast to end 2008 at 12%, the year had closed at 4.5%. "We went from a scenario of high inflation in 2008, to the current opposite concern - recession. It is something unheard of in international economic spheres. More than an economist, we need a psychiatrist to understand the abrupt changes that are taking place." Nevertheless, he stressed that the Dominican authorities are seeking to maintain stability while guaranteeing growth.
He says main projects that will get under way this year are the Coral Highway (La Romana-Punta Cana) with a US$300 million loan being secured with the Corporacion Andina. The Viadom road concessions and improvements project for the remodeling of the Duarte Highway, Santiago roundabout road, and the expansion of Navarrete to Puerto Plata to four lanes. This highway expansion should start in 45 days, he said.
He also spoke on the progress made on the start of the second line of the Metro and the train from Haina to Santiago. He expects the private sector to come up with US$4 billion for these projects.
Fernandez also said that growth would be spurred by several tourism projects that have been approved and should commence shortly.
"Our strategy is to overcome the crisis with our own internal dynamics," he said. He forecast that remittance, tourism and direct foreign investment flows would remain similar to 2008 levels.
On the question of exports, he said the decline in the cost of imported petroleum would offset the expected decline of US$900 million in exports.
He defended government spending, saying that percentage-wise his administration's spending was below that of other Latin American countries. He said the forecast for this year is a 1.7% fiscal deficit, compared to 3.7% in 2008.
President Fernandez nevertheless said that the DR needed to change its economic model in the medium and long-term. He said the country needed to diversify and back its productive sectors - industrial and agriculture, without abandoning the services sector. "How to be part of the global value chain by expanding, identifying and developing products with a greater value added to sell to international markets, generating greater wealth and guaranteeing long term sustainable development," he said. "It is clear the DR has to make the most of the trade agreements it has signed with Central America and the Caribbean, the USA and the European Union", stressed the President.
He made the point that the DR only exports to the USA and some to Europe. "We do not have a presence in Latin America," he said. "We have to tackle increasing our international commerce", he told his audience of businesspeople.
He said that his government is aware of the need to invest in education, and is focusing on higher education and technical training.
Fernandez said: "For the DR to fail, first the world has to fail. And the international effort that is being made is one so that the world will not fail and it makes me optimistic about the DR's future."
President Fernandez backed the implementation of the National Competitiveness Council's National Competitiveness Plan.
Fernandez is also optimistic that the country will be able to put the RD$70 billion in national pension funds to work.
More... (http://www.dr1.com/index.html#1)
He commented that The Economist analysts expect a negative one percent growth for the DR in 2009, but this compares to the Central Bank's 3% growth forecast. He says he is optimistic that growth will be higher. He attributes this to the relief in the lower price of petroleum (down US$2 billion from 2008), food products and some imported inputs, and to major projects under way or soon to be started.
At the conference, President Fernandez presented the panorama of how the world had gone from US$147 per barrel of fuel to US$34 this year. In the DR this meant that from inflation that had been forecast to end 2008 at 12%, the year had closed at 4.5%. "We went from a scenario of high inflation in 2008, to the current opposite concern - recession. It is something unheard of in international economic spheres. More than an economist, we need a psychiatrist to understand the abrupt changes that are taking place." Nevertheless, he stressed that the Dominican authorities are seeking to maintain stability while guaranteeing growth.
He says main projects that will get under way this year are the Coral Highway (La Romana-Punta Cana) with a US$300 million loan being secured with the Corporacion Andina. The Viadom road concessions and improvements project for the remodeling of the Duarte Highway, Santiago roundabout road, and the expansion of Navarrete to Puerto Plata to four lanes. This highway expansion should start in 45 days, he said.
He also spoke on the progress made on the start of the second line of the Metro and the train from Haina to Santiago. He expects the private sector to come up with US$4 billion for these projects.
Fernandez also said that growth would be spurred by several tourism projects that have been approved and should commence shortly.
"Our strategy is to overcome the crisis with our own internal dynamics," he said. He forecast that remittance, tourism and direct foreign investment flows would remain similar to 2008 levels.
On the question of exports, he said the decline in the cost of imported petroleum would offset the expected decline of US$900 million in exports.
He defended government spending, saying that percentage-wise his administration's spending was below that of other Latin American countries. He said the forecast for this year is a 1.7% fiscal deficit, compared to 3.7% in 2008.
President Fernandez nevertheless said that the DR needed to change its economic model in the medium and long-term. He said the country needed to diversify and back its productive sectors - industrial and agriculture, without abandoning the services sector. "How to be part of the global value chain by expanding, identifying and developing products with a greater value added to sell to international markets, generating greater wealth and guaranteeing long term sustainable development," he said. "It is clear the DR has to make the most of the trade agreements it has signed with Central America and the Caribbean, the USA and the European Union", stressed the President.
He made the point that the DR only exports to the USA and some to Europe. "We do not have a presence in Latin America," he said. "We have to tackle increasing our international commerce", he told his audience of businesspeople.
He said that his government is aware of the need to invest in education, and is focusing on higher education and technical training.
Fernandez said: "For the DR to fail, first the world has to fail. And the international effort that is being made is one so that the world will not fail and it makes me optimistic about the DR's future."
President Fernandez backed the implementation of the National Competitiveness Council's National Competitiveness Plan.
Fernandez is also optimistic that the country will be able to put the RD$70 billion in national pension funds to work.
More... (http://www.dr1.com/index.html#1)