NewsWhore
04-08-2010, 04:50 PM
Writing in Hoy, former Central Bank governor Bernardo Vega comments on his interpretation of the second letter of intent sent to the International Monetary Fund. He says that the second letter was necessary, five months after a first was sent in October 2009, because the government had not met two of its commitments. It failed to reach the agreed level of government deficit and did not meet its commitment to eliminate the arrears with the electricity generators by December 2009. It didn't reach this goal until March 2010.
Vega comments that the IMF is being very generous with the Fernandez government. It has allowed the government to postpone politically costly measures until after the May elections. He says that the government will receive RD$830 million by the end of March, RD$1.44 billion by the end of May, and RD$1.79 billion by July. In addition, the government will be placing at least US$600 million in sovereign bonds.
"The commitment for a flexible electricity tariff that covers power generation, transmission and distribution is the most costly politically," writes Vega. The price of electricity will now fluctuate with the cost of petroleum, natural gas and charcoal. And distribution companies commit to sign on 33% more clients and collect 70% of the power served.
He also warns that the government is committing to "design" a strategy to reduce tax exemptions.
"The injection of an extraordinary amount of foreign resources in so few months, plus the expenditures for the construction of the Barrick gold mine, the export of goods and services stirred by the Haitian tragedy, could well create bottlenecks in our production and overheat the economy," he warns.
More... (http://www.dr1.com/index.html#5)
Vega comments that the IMF is being very generous with the Fernandez government. It has allowed the government to postpone politically costly measures until after the May elections. He says that the government will receive RD$830 million by the end of March, RD$1.44 billion by the end of May, and RD$1.79 billion by July. In addition, the government will be placing at least US$600 million in sovereign bonds.
"The commitment for a flexible electricity tariff that covers power generation, transmission and distribution is the most costly politically," writes Vega. The price of electricity will now fluctuate with the cost of petroleum, natural gas and charcoal. And distribution companies commit to sign on 33% more clients and collect 70% of the power served.
He also warns that the government is committing to "design" a strategy to reduce tax exemptions.
"The injection of an extraordinary amount of foreign resources in so few months, plus the expenditures for the construction of the Barrick gold mine, the export of goods and services stirred by the Haitian tragedy, could well create bottlenecks in our production and overheat the economy," he warns.
More... (http://www.dr1.com/index.html#5)