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Monday, June 17, 2024

Leonel Fernández wins reelection in the DR

CSMS Magazine Staff WritersLeonel Fernández, the president of the Dominican Republic, was reelected for a third time in elections on Friday. Fernández won 53% of the vote, while his closest rival, Miguel Vargas Maldonado, won 41%. Many observers were stunned to observe the lavish spending of state resources to win. There is now a new concern over possible inflation as a result of Fernandez’s shameless use of state money to win votes in an election many thought he would have won with or without bribery.     “Leonel could have won decently, but now he’s going to be forced to adjust the budget and prices at a high political cost. There could even be devaluation,” said Bernardo Vega, a former central bank governor and ambassador to the US.    Mr Vega’s assertion is also noted by a lot of observers, who think it is going to be “impossible” for the government to maintain the current level of subsidies it used during the electoral campaign. According to the Financial Times, electricity subsidies in the DR “are amongst the highest in the world. Indeed, partly due to higher than expected energy prices, the government has already spent nearly all its annual budget for electricity subsidies.”    Fernandez emphasized his campaign on what he called “The grand plan,” which began with the introduction of the Caribbean’s first metro. “The government will now be under pressure to introduce austerity measures, cap spending, hike taxes and phase out subsidies,” said Wilfredo Lozano, a local political scientist at the Center for Investigation and Social Studies. And Lozano continued by explaining that “however you look at it,        Leonel is going to have to pay a heavy political and social cost.”    Although incomparably better than off economically than its neighbor, Haiti, the Dominican Republic is still very much a poor country with a third of its population lives in abject poverty. Adding to its problem is its huge debt burden, resulting from its 2003 collapse of its banking system. Inflation has returned, creeping “back into double digits, while growth is expected to slow from 8 per cent in 2007 to about 4.5 per cent this year,” confirmed the Financial Times.       Many predict a bumpy road ahead for Mr. Fernandez, who is leading a country with a wide open economy that only profits comprador bourgeois, but heightens the country’s vulnerability due to its heavy reliance on the US economy now in deep financial trouble. More than 4/5 of the DR exports go to the US, notwithstanding its lavish tourist industry that is also heavily depending on American tourists.Also see: High Noon for René Préval in HaitiRene Prevsl takes office  Haiti: the lies will never endWill Haiti Ever Regain Its Sanity?Will Haiti ever achieve responsible governance?

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