Dominican minister calls for proactive reforms to boost public investment

Dominican Minister of Finance and Economy Magín Díaz urged the nation to implement significant reforms proactively, rather than waiting for crises to force their hand. He stated that major reforms have historically occurred during times of crisis, but the current generation faces the complex challenge of enacting them amidst social media and without such catalysts.

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My message is that major reforms in the country have been made when there is a crisis, and the challenge for this generation is to make reforms, now with social media, which is more complex, but without crises arriving.

Díaz acknowledged that the country's robust economic growth has, paradoxically, reduced the urgency for these crucial reforms. "The same high economic growth has discouraged reforms, because everything is fine, there is macro stability, no inflation, the economy is growing," he explained. He stressed the need to overcome this complacency and called for realistic expectations, ruling out demands for drastic public spending cuts.

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The same high economic growth has discouraged reforms, because everything is fine, there is macro stability, no inflation, the economy is growing. So we must overcome that; I believe we must anticipate and, obviously, not ask the impossible of a government: ask it to collapse public spending, that is not reasonable.

The minister emphasized the importance of creating more fiscal space to boost public investment in key areas like health, which he deems underfunded. Díaz also highlighted the government's gradual reduction of broad subsidies, which significantly impact the fiscal deficit. He advocated for allowing market economies to function with fluctuating prices, with government intervention focused on smoothing volatility.

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Obviously, there is a role for the government to cushion and to do things gradually, but we have to understand that the market economy must be allowed to function with prices that fluctuate, and the government's function is, perhaps, to smooth out that volatility.

Separately, Díaz expressed optimism about ongoing negotiations with the United States to reduce the 12.5% tariffs on Dominican imports. He confirmed continuous contact with the U.S. Department of Commerce, acknowledging that these tariffs increase the cost of exports to the North American market. The discussions took place during the first Meta RD 2036 Forum.

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We are in permanent contact with the United States Department of Commerce and I am optimistic that we can reach an agreement to reduce the tariffs.