Caribbean & Central America - 14 December 2004

DOMINICAN REPUBLIC: Opposition PRD in crisis

Caribbean 14 December 2004 Modified: 14 December 2004 234 views

The opposition Partido de la Revolución Democrática (PRD) is experiencing tough times. In late November, President Leonel Fernández announced that he was going after ten high-ranking officials of the Mejía administration on corruption charges. In early December, a survey of PRD party members revealed that there was deep disillusionment with the party hierarchy.

Arrest warrants were issued on 18 November for the ten officials, including former interior minister Pedro Franco Badía, former armed forces chief Ramón Emilio Jiménez and former presidency official Siquió Ng de la Rosa. They were charged with having embezzled about US$33m through Plan Renove, a scheme designed to improve public transport and to encourage the renewal of the country's car fleet but which ended up assigning cars to officials and allies of the PRD. The officials were released days later but Fernández insists that corruption probes into the Mejía administration will continue.

PRD shake-up
If the results of a survey of PRD members are taken on board, the party could suffer further convulsions. The survey, carried in the daily El Caribe, showed that 68% of PRD members want the party leadership to be renewed. A total of 64% of the 40,629 respondents attributed the electoral defeat in May 2004 to party infighting and 51% to the decision to allow re-election, which split the party. Former president Hipólito Mejía outmanoeuvred his main rivals, including vice-president Milagros Ortiz Bosch and tourism minister Rafael Suberví Bonilla, for the PRD candidacy, but not without alienating much of his party and the grassroots.

Only 28% of the people polled said that they were satisfied with the leadership of the PRD. A total of 68% of respondents also cited clientelism, political patronage and corruption as harming the PRD. The party president, Vicente Sánchez Baret, resigned in protest at the findings. He later said that he had taken the decision in the heat of the moment and returned to his post.

ECONOMIC OVERVIEW: DOMINICAN REPUBLIC

President Leonel Fernández claims that the country is now getting out of the economic crisis which has afflicted the country for the past four years. He pointed out that since he took office it has strengthened from RD$42 to RD$28 to the dollar. When the crisis was at its worst, the peso was trading at RD$58 to the dollar. The IMF, which the government had hoped would sign a contingency agreement at the beginning of December, agreed an outline deal but still has to put pen to paper. Ministers are becoming increasingly keen that it does: the finance minister, Vicente Bengoa, said on 3 December that any deal with the IMF would limit the government's freedom of action over the next couple of years. Bengoa said that borrowing under the Mejía government accounted for US$7bn of the country's US$10.5bn foreign debt. Servicing this debt would cost, Bengoa said, US$2.1bn in 2005. The IMF will provide an immediate loan of US$1bn when the contingency agreement is signed, Bengoa said.

Outlook

The IMF had wanted the government to cut spending in 2005 and produce something approaching a balanced budget. The budget sent to congress on 30 November came to RD$207bn (US$5.59bn). The government is forecasting that growth in 2005 will be 2.5%; inflation will come down to 13.5%; and an average exchange rate for 2005 of RD$37.