Thursday, May 25, 2006

Dominican Republic’s President Gains Control of Legislature

(Source Article: Dominican Republic Elections - CNN)

Results from the country’s elections last week are most favorable to Dominican President Leonel Fernandez, as his political party gained control of both houses of the country’s Congress. Unfortunately, violence resulted in the death of 10 persons in the election’s aftermath.

The vote count was slow, and the elections were accused of being fraudulent. International groups said they saw no proof of vote-rigging, however.

Before the election, Fernandez’s Dominican Liberation Party (PLD) held just one seat in the Senate and 43 seats in the House. After the elections, they held 22 of 32 Senate seats and between 90-95 of 178 House seats—a dramatic change in the power structure of the country’s government.

Fernandez has been successful in bringing the country out of a recession resulting from the fraud-induced collapse in 2003 of a major bank, Baninter. But until now he has struggled to persuade the legislature to adopt resolutions to satisfy budget obligations imposed under an IMF loan program and as part of CAFTA, the U.S. and Central America free trade agreement; the IMF recently granted waivers relating to the country’s failure to fulfill structural performance criteria of the agreement. (see IMF Review of Stand-By Arrangement for Dominican Republic)

The IMF has encouraged “[t]imely implementation of structural reforms” aimed at improving good governance and transparency issues in the banking sector, and tough criminal proceedings on those involved in the 2003 banking crisis in order to send a message that consequences result from such misconduct.

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