IMF agreement a step closer

[NewsWhore]

The DR has signed a letter of intent that will pave the way for the signing of a new Stand-by Arrangement with the International Monetary Fund (IMF) and will guarantee the DR access to an additional US$900 million in funds, this year alone. The agreement, which is the first for a Caribbean nation in more than two years, could include up to US$1.7 billion in funds for the DR during the 28 months of the agreement. The agreement was announced at the Annual Meeting of the Boards of Governors of the International Monetary Fund (IMF) and the World Bank Group being held in Turkey. As part of this new agreement with the IMF, the DR has agreed to reduce its budgetary deficit of 0.8% of the GDP to zero in 2010. The agreement calls for a 2% budget surplus by 2012. The agreement also requires reforms to the DR's crumbling electricity sector and a more efficient tax system. Yesterday, IMF Managing Director Dominique Strauss-Kahn congratulated Dominican authorities for the strength of the policies and reforms included within the agreement, "which demonstrates the commitment to strengthen the DR institutionally and economically." The Letter of Intent will now be sent to the Executive Director of the IMF for final approval. Although there have been calls from some quarters in the DR for the stability an IMF agreement would provide, there is also concern that a new "fiscal reform", Dominican political code for a tax increase, would come on the heels of this new agreement. Minister of Hacienda Vicente Bengoa, Governor of the Central Bank Hector Valdez Albizu and Economy, Development and Planning Minister Temistocles Montas were all attending the meeting in Istanbul when they signed the Letter of Intent.
See: www.imf.org/external/np/sec/pr/2009/pr09357.htm (http://www.imf.org/external/np/sec/pr/2009/pr09357.htm)

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