Signing with China opens new source of borrowing for government
Former governor of the Central Bank, Pedro Silverio Alvarez, speculates in his comments in Diario Libre this week, that the Dominican government, by signing with the People’s Republic of China, opens up opportunities for increased trade, financial and cultural exchanges. “Particularly, it is possible that the Dominican government will have access to a new source of financing through the Chinese government that has been very receptive to the financial needs of friendly governments. Such as in the case of Venezuela that over the last decade has received US$50 billion in Chinese financing,” he writes.
Nevertheless, he says the challenge is another. Alvarez says in principle the signing with China is good. “But all will depend on how prepared the country is to take on the challenges that this means, both institutionally and economically,” he writes. From the institutional point of view, Chinese investors tend to be morally more lax in their relations with public officials and, therefore, more prone to bribes, he highlights. He stresses: “If they find fertile land the planting will be copious.”
The Dominican Republic already has a trade deficit with China of around US$2 billion. Alvarez makes the point that from an economic point of view, the low diversification of Dominican exports, in terms of volumes, poses an asymmetry between both economies that can only be addressed with public policies that promote more exportable products and services. Otherwise, he said we could be throwing a hook for another to catch the fish, highlights the former Central Bank manager.
Source: DR1, Huffington Post
May 8, 2018
Category: DR News |