On September 27, the Executive Branch, through the Ministry of Finance, presented to the National Congress the draft General State Budget Law for 2025. With a total amount of one billion 484,234.6 million pesos, this budget begins an ambitious plan for the restructuring and rationalization of public administration, seeking to improve the efficiency of state spending.
The Government estimates that the income For next year they will amount to one trillion 241,364.7 million pesos, which represents 15.3% of the Gross Domestic Product (GDP). This projection is supported by administrative efforts to optimize tax compliance and a favorable macroeconomic environment.
Furthermore, the planned expenditure, which is equivalent to 18.3% of GDP, is oriented towards inclusive and sustainable developmentprioritizing fundamental areas such as health, education, employment, social assistance, transportation and security.
In particular, 4.10% of GDP will be allocated to restructuring of the educational systemwhich is expected to facilitate coordination between the different levels of education, eliminating the current fragmentation.
“We are making the use of resources more efficientreducing current expenditure derived from the duplication of functions and guaranteeing adequate investment in capital to provide quality educational environments,” the Executive states in its Budget submission letter.
The projected fiscal result and the financial applications The forecasts represent financial sources that amount to 350,990.4 million pesos, equivalent to 4.3% of GDP, lower than what was observed in previous years.
The estimate of income for the Central Government in the 2024 reformulated budget, amounts to one billion 222,734,406,859 pesos. In addition, it establishes a total of expenditures of one billion 567,714,618,977 pesos for the same budget period.
Savings through efficiency
One of the pillars of this restructuring is the proposal to merge and eliminate several public institutions, which is expected to generate savings of 25,000 million pesos. President Luis Abinader, in a recent press conference, highlighted that this measure seeks to eliminate duplications and promote more efficient and coherent administration.
Key mergers
- Ministry of Higher Education, Science and Technology (Mescyt) will be integrated with the Ministry of Education (Minerd).
- Ministry of Economy, Planning and Development (MEPyD), will merge with the Ministry of Finance.
- The Social Subsidies Administrator (Adess) will join the Supérate program.
- In addition, entities such as the Workers’ Savings Bank and the National Population and Family Commission will be eliminated, which will allow a greater concentration of resources.
The merger process has raised concerns about the future of the public employees involved. Although immediate mass dismissals are not anticipated, the Ministry of Public Administration (MAP) will carry out an evaluation to determine the future employment of affected workers.
The proposal of fusion of Mescyt and Minerd has generated debates. The Minister of Education defends the measure, citing examples from other countries in the region where centralization has resulted in more effective management. However, the Association of Teachers (ADP) has expressed its rejection, arguing that the merger could worsen deficiencies in the education system.
Fiscal perspectives
Fiscal management is considered a priority, with a focus on sustainability and transparency. The Minister of Finance, Jochi Vicente, has emphasized that this restructuring is essential to avoid an increase in the fiscal deficitcontributing to a more robust and effective public administration.
The expectation is that, with these measures, the Government will not only achieve significant savings, but also improve the quality of life of Dominican families, guaranteeing a more efficient use of public resources. The implementation of these proposals will be sent to Congress, where their viability will be evaluated and the necessary legal modifications will be worked on.
With the deposit of the bill of General State Budget for 2025 last Friday and The restructuring of public institutions represents a decisive step towards the modernization of the Dominican State.
It has been indicated that they will be with a focus on efficiency, inclusion and sustainabilitythe Government seeks not only to save resources, but also to optimize the service provided to citizens at all levels. The next few weeks will be crucial to define the future of this ambitious strategy.
Analysis by Miguel Collado Di Franco on the rationalization of Public Administration
On September 27, 2024, Miguel Collado Di Francoexecutive vice president of the Regional Center for Sustainable Economic Strategies (Crees), analyzed the recent proposal for “rationalization and modernization of public administration” announced by the government.
Collado highlighted that, although it is expected to save 25,000 million pesos, this amount will not necessarily translate into a real savings for citizens.
He clarified that the elimination of institutions does not necessarily imply a cost reductionsince many funds, such as those for education and transfers, will continue to be needed. For example, the budget of the Ministry of Education includes 17,356.9 million pesos in transfers, which are essential for scholarships and support to the Autonomous University of Santo Domingo (UASD).
The analysis also mentions that the Ministry of Economy, Planning and Development (MEPyD) It has a considerable budget, where 42% is allocated to salaries.
Collado argues that, despite the mergers, there are no significant opportunities to economize. Furthermore, institutions such as Economic Dining Roomswith 90% of their budget allocated to payroll and supplies, also do not offer much room to reduce expenses.
Collado stressed the importance of transparency in this reform process. So that the population really understands the benefits of rationalizationthe government must provide clear details on where the resources that will be allocated to critical areas such as education, health and security will come from.
Without this clarity, citizens could perceive that, despite smaller governmentyour tax burden will not decrease.
