NewsWhore
10-25-2006, 07:00 PM
President Leonel Fernandez's first full day in Washington, DC yesterday was dominated by his meeting with International Monetary Fund (IMF) chairman Rodrigo Rato. During their talks, which lasted for almost one hour, President Fernandez announced that his government was sending a new tax reform package to Congress in order to obtain the resources necessary to reduce the current debt load, and in accordance with suggestions made by the IMF. Temistocles Montas, the President's Technical Secretary, told reporters that the issue would be taken up with Congress, "within the next few weeks." According to Montas, the idea is to get the legislation passed in time to be included in the 2007 budget. Montas also said that President Fernandez told chairman Rato that because last year's Congress did not ratify the government's tax reform proposals as they were presented, there was a RD$7 billion reduction in tax collection, and this was going to have to be "rectified", in the words of the President. Montas also commented that reforming the tax system is necessary in order to deal with the "profound" changes that will be brought on by the implementation of DR-CAFTA. Accordingly, President Fernandez asked Rato and other IMF staff to be patient with the country and asked the IMF for support, considering that the tax reform will affect some of the overall goals of the IMF's Stand-by agreement. With reforms to the tax system the government hopes to gain more stability in order to petition for more loans, and seeks to ease the burden placed on the country by increasing external debt.
According to what Montas told the press, Rodrigo Rato told the Dominican President that the current levels of debt, which are pegged at 41% of the country's GDP, are not sustainable and that the IMF would like to see these debts reduced to a 25% level. The IMF also wants the DR to obtain what they call a "primary surplus" (government accounts before debt payments) of at least 2.5%. Of course the electricity situation also came up in the talks, "since this is what most distorts the fiscal situation of the Dominican Republic". The IMF is strongly urging the total removal of the subsidy that will cost the government US$700 million or thereabouts this year. As a master "spin doctor", Montas told reporters that the government was counting on the electricity distribution companies, the EDEs, to increase their own cash flows through better collections and thus allow the government to reduce the subsidy gradually rather than have it removed all at once.
Fernandez told reporters that he would only talk to the press after his meeting with President George W. Bush, which takes place later today. His meeting with President Bush was moved back a day due to agenda issues.
More... (http://www.dr1.com/index.html#1)
According to what Montas told the press, Rodrigo Rato told the Dominican President that the current levels of debt, which are pegged at 41% of the country's GDP, are not sustainable and that the IMF would like to see these debts reduced to a 25% level. The IMF also wants the DR to obtain what they call a "primary surplus" (government accounts before debt payments) of at least 2.5%. Of course the electricity situation also came up in the talks, "since this is what most distorts the fiscal situation of the Dominican Republic". The IMF is strongly urging the total removal of the subsidy that will cost the government US$700 million or thereabouts this year. As a master "spin doctor", Montas told reporters that the government was counting on the electricity distribution companies, the EDEs, to increase their own cash flows through better collections and thus allow the government to reduce the subsidy gradually rather than have it removed all at once.
Fernandez told reporters that he would only talk to the press after his meeting with President George W. Bush, which takes place later today. His meeting with President Bush was moved back a day due to agenda issues.
More... (http://www.dr1.com/index.html#1)