Debt service for 2007

[NewsWhore]

The Dominican Republic has to pay US$2.248 billion over the next two years. The nation has to pay US$914 million or RD$30.644 billion at the current rate of exchange in 2007, according to figures from the Ministry of Finance's Public Credit Department. So far in 2006, the government has paid US$823 million and still has US$254 million outstanding. Not taking into consideration the numbers extracted from the Ministry of Finance database, the head of the National Planning Office recently stated that the Dominican Republic had to pay RD$65 billion in 2007. El Caribe says that only by taking into consideration the figures for the two years can one approximate the numbers cited by Juan Hernandez, the head of ONAPLAN. Perhaps coincidentally, today's editorial page article by economist Felix Calvo, a member of the Mejia administration's financial staff, focuses on the economic issues facing the government, especially in the context of the new tax proposals announced in Washington by President Fernandez. According to Calvo, the government must generate a 2.5% surplus in the GDP in 2007, and only by generating such a surplus can the government hope to pay the foreign debt charges. Calvo says that the IMF requirements were simply laid out, but no specific requirements were put forth. Like the Nike advertisement: "Just do it". Therefore, these discussions are quite relevant, especially in view of the fact that the government has already imposed two tax reforms that produced around RD$55 billion that were not, according to Calvo, used in an appropriate manner. According to the economist, the last tax reform went through a PRD-controlled Congress that allowed the government to receive RD$24.360 billion, more than the RD$24.276 billion they said that they would lose through the inception of the DR-CAFTA agreement, and the elimination of the exchange tax, tariffs and the consular invoice. However, DR-CAFTA has not yet entered into effect, and the exchange commission was in force until June 2006. This tax generated RD$10 billion for the government. The tariffs were not eliminated either and they produced RD$3.6 billion as of June. These two items, when added to the RD$24.360 billion approved by the Congress, add up to RD$37.960 billion, much more than the original RD$31.477 billion requested. The government has never mentioned this windfall. Calvo calls the affirmation that the government did not receive the expected results from the second tax reform a blatant manipulation of the facts. In fact, he says, they received more.

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