Political corruption is destroying the Dominican Republic. Essay
Political corruption is destroying the Dominican Republic.
Today i want to share with you, what is happening at the moment with the tax reform, what is and what involves, the factors or posible consequences that may happen, so in order to start is good to know that the Dominican Republic suffers from government corruption, wasteful spending, and high unemployment, as well as unreliable electric service caused by seasonal drought, low collection rates, theft, and infrastructure problems. Today im going to focus in the first two: government corruption and wasteful spending.
The Dominican government is a machine of dispensing favors and political patronage to supporters. For example, the departing administration of president Leonel Fernández has 334 vice ministers distributed among 20 cabinet ministries. The Ministry of Agriculture has 37 vice ministers, Public Health has 34. Each vice minister enjoys a nice salary plus benefits such as a discretionary credit card, travel expenses, car with a chauffeur, staff, etc. http://www.cato-at-liberty.org/
And because of those thing, President Danilo Medina signed into law a bill that’s expected to raise government revenue up to 2% of GDP, in an attempt to tackle a budget deficit that this year will amount to nearly 8% of GDP. www.cnn.com
And now we are reacting to measures that look to increase national sales tax from 16% to 18% in most products; and sets a special sales tax to previously exempt products like certain foods and services that will range from 6% to 10%. Amongst other tax increases. www.cnn.com
The budget deficit projected for 2012 was scheduled to end at nearly 2% of GDP this year, but as admitted by the authorities, a spending surge during the previous government of Leonel Fernandez, who is in the same party as current President Medina, during the run up to elections, skyrocketed the deficit to nearly 4 times that initial projection. www.cnn.com
So in fact of those wasteful spending that they had in the past administration of president Leonel Fernandez. We see this as them footing the bill for what they perceive as reckless spending and corruption from President Medina´s fellow party members, and amongst other things, we are just calling for those responsible to face trial for corruption charges. We understand that there is a debt problem. But we believe the government should cut down its own expenditures, instead of hitting citizens with new taxes.
Another factor that keeps the deficit large is that the government is currently spending more than $1 billion every year in electricity subsidies. http://www.cato-at-liberty.org/
Fiscal adjustment had to happen,but where the real anger comes from is that people are seeing that spending by the government is not changing.
If the Dominican Republic does not decrease its deficit, it will be more expensive for the country to borrow money from banks, and to sell bonds. These funds are crucial to jumpstarting poverty reduction programs and education initiatives that the country needs and that Medina had promised to deliver during his presidential campaign.
The country could actually be able to “grow itself out,” of the deficit problem if the economy continues to work well, and if the government gets more strict with how it spends its money.
Because we pay all these taxes, and we see nothing in return, we believe that government corruption and overspending have led to the country’s bloated deficit. I consider myself to be apolitical, But this fiscal reform package was the drop that made the glass spill.
And i just have to say that when a disaffected population, sick of their corrupted politicians like we are, we just need to chose an outsider as president. Or i dont know, but there’s an increased feeling that the country needs a dramatic cut from its present.
Carmen Rosa Báez