May: a month between the good news of recovery, and the bad news of a third COVID-19 wave

DOMINICAN REPUBLIC - Report 08 Jun 2021 by Magdalena Lizardo

Amid the good news of the economy expanding by 11.5% during January-April 2021, from the same period in 2020, the government was forced to announce the imposition of greater restrictions on mobility for the first week of June, and the intensification of vaccination efforts.

The COVID-19 situation has again gotten out of hand. Although around 4 million people had received the first dose of the COVID-19 vaccine by the end of May, the presence of more aggressive COVID-19 variants, such as the Brazilian and UK strains, together with some failures to observe distancing measures (particularly among the young), have caused the number of cases to skyrocket. The country has now entered into a third wave of the pandemic.

With the worsening of the COVID-19 situation, various sectors, as well as former president Leonel Fernández, have suggested to the government that the tax reform should be applied after 2021. President Luis Abinader once again reiterated the need for a “tax reform that is both true and fair,” which must be discussed in 2021, but that does not imply that it should enter into effect in January 2022. Meanwhile, the government still hasn’t confirmed just when in 2021 the discussions of this Fiscal Pact will begin.

For his part, Minister of Finance Jochi Vicente said that the government's strategy is aimed at giving preference to borrowing from multilateral organizations, and borrowing in pesos. He pointed out the need to generate primary surpluses in order to reduce debt as a proportion of GDP, which is why the Fiscal Pact is necessary.

On the political level, the judicial system continues to hear cases of corruption against officials of former president Danilo Medina’s administration. Meanwhile, at the foreign policy level, relations with Haiti are tense, given Haiti's unilateral decision to build a diversion canal for the Massacre River, which forms part of the border between the two countries.

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