NewsWhore
10-21-2010, 04:00 PM
Former governor of the Central Bank Bernardo Vega says that the government should not take loans for US$580 million to private lenders scheduled for 2011, according to the 2011 National Budget sent to Congress for approval, as reported in Hoy. The funds are earmarked by the government for building hospitals, highways and the Santo Domingo Metro. The loans do not require tenders, and he said they are overvalued and not priority.
Speaking on Telematutino on Channel 11, he said that the problem is not so much the level of borrowing as the quality of the borrowing. He said that there is a 1:2 ration of government borrowing from multilateral organizations (soft loans, long terms, transparent) and commercial borrowing (market interest rates, short term, lack of monitoring).
Vega commented that the explanation for taking on this debt should have come from the Ministry of Economy or the Ministry of Hacienda, not the Central Bank. He challenged the claim that the present levels and those stipulated for 2011 are manageable.
In his opinion, by law all loans taken by the country need to be evaluated by a commission that is a dependency of the Ministry of Economy. "In practice, whoever wants to earn some money in a credit operation can go directly to the President or to the a ministry to sell them the idea and then they convince the President. The loan is sent to Congress. I do not believe that is how the country should take on debt," he stressed.
Vega was interviewed on Telematutino 11. He said the government is making wrong use of taxpayer money, given the excess in government payroll and non-priority public works.
See: www.hoy.com.do/dr/videos_tv.aspx?id=1828 (http://www.hoy.com.do/dr/videos_tv.aspx?id=1828)
More... (http://www.dr1.com/index.html#5)
Speaking on Telematutino on Channel 11, he said that the problem is not so much the level of borrowing as the quality of the borrowing. He said that there is a 1:2 ration of government borrowing from multilateral organizations (soft loans, long terms, transparent) and commercial borrowing (market interest rates, short term, lack of monitoring).
Vega commented that the explanation for taking on this debt should have come from the Ministry of Economy or the Ministry of Hacienda, not the Central Bank. He challenged the claim that the present levels and those stipulated for 2011 are manageable.
In his opinion, by law all loans taken by the country need to be evaluated by a commission that is a dependency of the Ministry of Economy. "In practice, whoever wants to earn some money in a credit operation can go directly to the President or to the a ministry to sell them the idea and then they convince the President. The loan is sent to Congress. I do not believe that is how the country should take on debt," he stressed.
Vega was interviewed on Telematutino 11. He said the government is making wrong use of taxpayer money, given the excess in government payroll and non-priority public works.
See: www.hoy.com.do/dr/videos_tv.aspx?id=1828 (http://www.hoy.com.do/dr/videos_tv.aspx?id=1828)
More... (http://www.dr1.com/index.html#5)