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DR on the way to repeat Puerto Rico economic crisis

Puerto Rican Legislator Angel Rosa says that excessive public spending and the increases in the government payroll are the main reasons for the current economic crisis in Puerto Rico, as reported in Listin Diario. He said Puerto Rico did not have the discipline to restrict spending to prevent having to borrow from abroad to finance the government.

Rosa warned that the DR seems to be making the same mistakes, and called for the government to cut public spending.

He was speaking during a presentation followed by a panel discussion on “Puerto Rico Crisis: Causes, Consequences and Present Situation” at the Pedro Henriquez Urena National Library in Santo Domingo yesterday, Wednesday 14 October 2015.

Dominican economist Ernesto Selman of the Regional Center for Sustainable Economic Strategies (CREES) also took part. Selman said DR should see itself in the mirror of Puerto Rico. He said the country is not far from having to confront the same economic problems. He said the crises in Puerto Rico, Greece and Brazil were a consequence of populist and political patronage practices by their governments that resulted in increased spending, which leads to taking on debt and makes public finances unsustainable.

Selman believes that the DR needs to change its fiscal policy. He said that economic growth does not necessarily translate into increased income for the government. He said the government was spearheading public policies that will eventually lead to a crisis.

“(Here) public policy needs to change, to adopt a law of fiscal responsibility and transparency, so that we can limit increases in public spending, fiscal deficits that ultimately translate into greater debt taking,” he stated. He ended by saying that since 2001 the country has maintained a sustained indebtedness trend and this is still the case in the 2016 National Budget.

Source: DR1, Listindiario

Oct 15, 2015

Category: DR News |

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