NewsWhore
04-06-2011, 04:50 PM
Writing in today's Hoy newspaper, Bernardo Vega muses about the economic strategy consultations carried out by the Fernandez government, including one contracted to French economist Jacques Attali and another to Ricardo Haussman at the University of Harvard. These propose a change in economic strategy, while he points out that the Central Bank Governor has defended the present economic model.
Vega writes that in his first term of office (1996-2000) President Fernandez semi-privatized deficient and costly government enterprises, reducing payroll and the government deficit. But as of his second term in government, he changed the strategy, giving priority to politics. "Sponsoring large excesses of government employees, many of whom do not work or have very low productivity, to achieve political support for the elections, reduces the availability of resources for public works, and these then have to be financed with foreign or domestic borrowing. The budgets of these public works are not transparent so the excesses can nurture the accounts of the political party," he writes, noting that: "It is no coincidence that the PLD treasurer is now the Minister of Public Works."
Vega explains that the result is that the percent of GDP made up by savings, be it of the public or private sector, has reduced in comparison to previous years and for it to grow more loans are necessary. "That model has its limits," he highlights.
Vega, himself a former governor of the Central Bank, says there are other trends. "Taking advantage of the recent free trade agreement each day we export more goods to Europe, primarily farm products. Due to the high cost of petroleum and the devaluation of the dollar, travel comes mostly from the Americas. The Dominican economy is increasingly more tied to that of Haiti, be it by twin apparel plants, our growing exports to Haiti, or by the increasing presence of an illegal workforce that keeps wages down, worsens distribution of revenues and delays the mechanization of farm activities".
He says the change in model is happening, following or not following the recommendations of the studies and the opinions of our economists. "The invisible, healthy or perverse hand of Adam Smith?"
More... (http://www.dr1.com/index.html#8)
Vega writes that in his first term of office (1996-2000) President Fernandez semi-privatized deficient and costly government enterprises, reducing payroll and the government deficit. But as of his second term in government, he changed the strategy, giving priority to politics. "Sponsoring large excesses of government employees, many of whom do not work or have very low productivity, to achieve political support for the elections, reduces the availability of resources for public works, and these then have to be financed with foreign or domestic borrowing. The budgets of these public works are not transparent so the excesses can nurture the accounts of the political party," he writes, noting that: "It is no coincidence that the PLD treasurer is now the Minister of Public Works."
Vega explains that the result is that the percent of GDP made up by savings, be it of the public or private sector, has reduced in comparison to previous years and for it to grow more loans are necessary. "That model has its limits," he highlights.
Vega, himself a former governor of the Central Bank, says there are other trends. "Taking advantage of the recent free trade agreement each day we export more goods to Europe, primarily farm products. Due to the high cost of petroleum and the devaluation of the dollar, travel comes mostly from the Americas. The Dominican economy is increasingly more tied to that of Haiti, be it by twin apparel plants, our growing exports to Haiti, or by the increasing presence of an illegal workforce that keeps wages down, worsens distribution of revenues and delays the mechanization of farm activities".
He says the change in model is happening, following or not following the recommendations of the studies and the opinions of our economists. "The invisible, healthy or perverse hand of Adam Smith?"
More... (http://www.dr1.com/index.html#8)