[DR1] Growth not trickling down to poor

[NewsWhore]

Economist Ajacx Mercedes, speaking at a workshop organized by Centro Juan Montalvo said that the 12.6% Gross Domestic Product growth rate has not trickled down to the population. He pointed out that the poor continue to be affected by low wage employment, and there has not been an increase in spending on health and education. He said that the Central Bank report showed that the DR's accelerated macro-economic recovery with the change of government led to a decline in unemployment, from 19.7% in 2004 to 16.4% in 2006. Nevertheless, Mercedes points out that the relationship between employment and GDP is very weak, and in June 2005 fell from the already historically low level of 0.67% to 0.22%. As reported in Clave Digital, this elasticity index is an indicator that reveals how much unemployment drops per percentage point increase of GDP. "That means that we are growing more but we are not creating jobs, which is an example that economic growth does not necessarily mean increased welfare for the population," he stressed. Mercedes also mentioned that it is the informal sector that is generating most of the jobs - or 55.9% of these. Pablo Mella, also from Centro Montalvo, commented that the government "Solidaridad" and "Comer es Primero" programs are generating "professional poor." They require people to declare that they are poor to be eligible for government benefits. He said that these two government programs do not address the root of the problem, and are nothing but an electronic food parcel, despite the sophistication with which the government has sought to disguise them.

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