The debt of the central bankwhich is covered by the State, has continued to grow every year, but with the aggravating factor that its existence makes it difficult to fight poverty, said the economist, Isidoro Santana.
He explained that having a Central Bank that is the issuing body and gendarme of monetary policy, but at the same time, the issuing body of public debt, is obliged, for its own interest, to maintain high real interest rates and an overvalued exchange rate, as a way to guarantee the permanent entry of capital into the country and, in the process, attract it to its midst.
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“Any attempt by investors to raise the capital required for productive investments forces the Central Bank to respond with higher interest rates and restrictions on the financial market,” Santana wrote in the book’s prologue. Revealing Julio Cross’s Traps.
He stressed that under these conditions, there is no productive company that can compete well, unless it is by maintaining low wages and avoiding paying taxes, either by evading them or by seeking tax exemptions, while at the same time becoming an insurmountable obstacle to improving the competitiveness of industry and agriculture, increasing formal employment, increasing real wages and reducing poverty. The use of immigrant labor evading social responsibilities has become a condition of survival.
“As a good Dominican, the author uses baseball jargon to define how the art of attracting capital to sustain the exchange rate is what makes the Central Bank authorities the “MVPs” (most valuable players) of all governments, always with the expectation that the tsunami will fall on the next one who comes, as already happened in 2003,” he said.
