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Austerity in the Caribbean


Protesters in Northern Washington Heights hold signs calling for former Dominican president Leonel Fernandez and “the corrupt” to be jailed. CREDIT: LANCE DIXON

Some in New York’s Dominican community take to the streets to protest a fiscal reform plan that will hit their families’ pocketbooks back home.

While anti-austerity protests in Europe make headlines around the world, a less-noticed fiscal austerity plan in Dominican Republic has sparked demonstrations at home – and in New York, home to nearly 600,000 Dominicans, according to U.S. census data.

Dominicans in New York have gathered for at least three public rallies over the past month, to protest a sales tax increase, from 16 percent to 18 percent, in the Dominican Republic. The New York protests have been small, with not more than a hundred or so at the rallies, though similar protests in the Dominican Republic have drawn several thousand.

The plan, approved by the government of President Danilo Medina on November 10, raises sales taxes on food, fuel and other staple goods. Taxes will also go up on liquor and cigarettes, as the government struggles to lower the country’s $4.6 billion fiscal deficit. The government acted after an International Monetary Fund mission to the Dominican Republic last month. The IMF, which often conditions its loans to countries based on fiscal belt-tightening, suggested in a press release that the country “would require a strategy to reduce the overall fiscal deficit to a prudent level in 2013-14.” The statement also called the austerity measures, set to take effect in January, a “step in this direction.”

But opponents say the government – not taxpayers – is to blame for the deficit. “We, the poor and middle class people, are always paying for the high taxes,” said Franklin Alvarez, a member of Frente Amplio Domincano, a progressive political group that organized two of the anti-austerity protests in New York. “They’re trying to impose taxes and more ways to take money out of our pockets.”

Dominicans here won’t feel the tax increases directly, but their families back home will. Still, opinions in New York’s Dominican community are divided. During one of the rallies in Washington Heights last month, taxi drivers who passed by shouted out their disapproval of the anti-austerity protestors. One elderly woman watched from the street, muttering “socialismo (socialism)” and suggesting that some of the protestors’ anti-capitalist views are similar to those of Cuba’s communist government.

That observer surely meant “socialism” and “Cuba” as epithets. But, “at least all of the things people need to survive are guaranteed there,” said Emmanuel Pardilla, a 21-year-old Fordham University student who has attended the rallies. “That’s not the case in the Dominican Republic,” where, Pardilla said, “There’s a democracy only for the rich.”

The New York protest organizers say that their families will be punished financially because of the actions of former President Leonel Fernandez, who left office this year, though his successor, Danilo Medina, is from the same party. Pardilla called Fernandez’s presidency “a complete disaster,” and said that protestors want him arrested for corruption.

Fernandez’s opponents and op-ed writers in the Dominican media accuse the former president of putting his political friends in power with large salaries. Opponents say that spending helped push up the deficit that the IMF wants reined in before it will loan more money to the Dominican Republic.

“The opposition here says, ‘the deficit is the responsibility of Leonel… we don’t have to pay for what [he] did,’” said Tamayo Tejada, vice counselor of the Dominican consulate in New York.

Tejada also says that some Dominicans in New York are angry because the remittances they send to their families back home – which totaled about $3 billion last year – won’t go as far once the new taxes take effect. About 60 percent of remittances are used by Dominican families for “consumption goods” like food, according to a report by the Organisation for Co-Operation and Development, and it’s those goods that will be subject to the higher sales tax.

After a brief flurry of protests in Dominican Republic and New York, the issue has quieted down. But that could change when the sales tax increases take effect next month – and when the IMF sends another mission early next year to the Dominican Republic to see how the austerity plan is going.


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