The economic paralysisas of March 2020, as a result of the pandemic, the economy contracted towards the second half of that year, compromising critical sectors such as tourism, construction and mining.
In hard numbers, it caused the contraction of the Gross Domestic Product by 6.74%, according to figures from the World Bank. That entity establishes in its general overview of our country that the health and economic crisis pushed us to first recession in almost 17 years, destroying some 191,273 jobs, with the consequent impact on the poorest households.
Two years later, on the road to recovery, the key actions are runningsuch as strengthening production linkages between local and exporting companies; reduce administrative and bureaucratic costs; improve the reliability of the electricity supply and expand access to credit, to restore employment and economic growth, as well as confront and reduce poverty.
However, we have new challenges. The headline inflation has been reflected in our market, pushed in turn by an exorbitant price of barrel of petroleum that in recent weeks reached up to 140 dollars, to later settle at around 100 dollars per barrel.
If we consider that the budget is calculated at about 60 dollars, this means that double the stipulated money must be sought to cover the local demand for oil, which is estimated at more than 65 million barrels per year.
Given this scenario, President Luis Abinader gave a brave and timely speechor. He appealed for the expansion of social programs, fuel subsidies and the elimination of tariffs.
But it has also set its sights on accelerating economic reactivation, hand in hand with new investments and legal figures such as Public-Private Partnerships and public trusts that allow injecting fresh resources to finance development.
The most recent global crisis, in 2008, evidenced two models: the North American, which was to continue betting on development through investments to move the productive apparatus, or to contract spending to save resources, as was the case in many European countries.
Obviously, the United States’ bet worked, and that is what we can consider, keeping our distance, at the local level.
With no fiscal pact in sight at the moment, and seeing ourselves with less scope for international financing, it is critical that we pursue alternative ways to attract resourcesthat is, ideally, capital market investments and the use of pension funds (AFP).
There are examples in the region, such as Costa Rica, who largely financed their dams and hydroelectric plants using those financing sources, avoiding public debt and achieving sustainability.
Furthermore, in recent years, through a escrowcontinued to expand their clean energy network, a mirror in which we can see ourselves reflected if we act responsibly and unite behind the same goal: financing development.