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Dubai country briefing There are just a few spots in the middle east that fully embrace economic growth and globalization. One of them is Dubai that managed to grow from a small settlement in 1960 to a 1 mio. metropolis in modern times. It boosts GDP growth figures between 5-8% and does play in an already high income area (USD 20.000). Dubai ranks third worldwide in shopping area per capita as it has major retail outlets and provides half of shipping tonnage on the eastern Arabian peninsula. Property investments hit USD 63bn this year and the construction boom might last a while as property prices are still in check. More: TJ's Weblog "Technology, Venture Capital and Entrepreneurship": Dubai country briefing

A spectacular fall from grace Dec 11th 2003 From The Economist print edition An incompetent government and a tricky choice for the IMF. ONCE again the International Monetary Fund faces an awkward decision in a small Latin American country. Before the end of the year, it is due to rule on whether to resume a $600m loan programme agreed in August and suspended in October after the government, unannounced, paid out a similar amount to renationalise the country's two main electricity distributors. As so often, the Fund is on a hiding to nothing. Resume support, and it will be blamed for inevitable public-spending cuts-and for blessing a dodgy bank bail-out. Refuse aid, and it will be charged with casting adrift a fragile economy flirting with debt default. The Dominican Republic has suffered a spectacular fall from grace. From 1996-2000, the economy grew by over 7% a year, led by tourism and duty-free assembly plants, making clothes and other goods for the United States. Then, growth stalled, along with the world economy. The government of Hipólito Mejía, of the centre-left Democratic Revolutionary Party, which took office in August 2000, responded with public spending, financed by foreign borrowing. That led to worrying, but still manageable, deficits. But the slowdown also exposed a massive bank fraud that has crippled the country. Last April, the central bank belatedly took over Baninter, the third-largest commercial bank, which had suffered a run on deposits. It discovered a hole in the bank's accounts of some 60 billion pesos ($2.4 billion), equivalent to 12-15% of GDP. A third of the losses were generated in the bank's last three months, as its owners erased dodgy loans to themselves from the books and whisked transfusions of cash from the central bank to accounts abroad. Baninter's owner, Ramón Báez, is in custody and awaiting trial. But many Dominicans doubt that punishment for the bank collapse will fit the crime. Mr Báez is very well-connected. He gave gifts or money to politicians, army officers and judges; after his arrest, many of them visited him in prison. The central bank showed similar generosity. When it took over Baninter, by law it should only have compensated depositors up to a ceiling of 500,000 pesos ($12,000). Instead, it guaranteed all the bank's liabilities, including offshore deposits. Three-quarters of this money went to 80 account holders. Dominicans will soon feel the cost of that, as the government struggles to get its finances under control. The ratio of public debt to GDP has doubled to 50% under Mr Mejía. To close the fiscal gap, he has resorted to a 5% tax on exports and tourism, a 2% import surcharge and a tax on financial transactions. But receipts have been lower than expected. Businessmen are reluctant to pay more taxes as long as the government fails to cut its spending. Mr Mejía's mind is on politics. Although unpopular, he is seeking a second term in an election due in May. His former supporters among the poor have been hit by the collapse of the peso, which lost half its value against the dollar last year. That has pushed inflation to 35%. Electricity blackouts have become more frequent. More than 20 people have died in clashes with police during protests this year against rising prices and job losses. The protestors blame the IMF for their plight. They should blame Mr Mejía. Any money that the Fund might give to the Dominican Republic in the next few months is likely to be wasted on pre-election spending. Until the politicians show signs of taking responsibility for their actions, it is hard to see why they deserve any help from the Fund.

Dominican Republic in Crisis In the late 1990's, the Dominican Republic had the fastest-growing economy in Latin America. Fueled by tourism, manufacturing and money sent home by Dominicans abroad — many of them in New York — the economy grew nearly 7 percent a year. Today that economy is in collapse. Protests are common, and at least eight people were killed during a strike in November. Extraordinary as it sounds, the troubles are largely due to a single bank collapse and its aftermath, a meltdown due to cronyism, corruption, lax regulation and secrecy. Until April, Banco Intercontinental, known as Baninter, was the country's second-largest private bank, and its president, Ramón Báez Figueroa, was Santa Claus. Mr. Báez Figueroa gave away millions of dollars to popular causes and politicians. He gave two S.U.V.'s to President Hipólito Mejía. His generosity served to shield the bank from regulators who might have discovered that hundreds of millions of dollars had disappeared. When Baninter collapsed in April, the government — against the advice of the International Monetary Fund — guaranteed all deposits, even those held in the Cayman Islands. Three-quarters of the payments went to 80 very wealthy individuals. The bailout has cost Dominicans $2.2 billion — two-thirds of the government's budget for the year — leading to inflation and a sharp devaluation of the peso. Electricity is highly subsidized, even for the rich, and the state is too broke to pay anyone to generate it, so blackouts last for hours. Recently the government bought two private electricity distribution companies. The move was popular, but it has not led to service improvements and cost the treasury the suspiciously large sum of $350 million. The deal led the I.M.F. to suspend a loan in progress. The Dominican Republic needs to buy electricity and lessen people's suffering and the risk of social violence. But the I.M.F. and other lenders are right to condition larger loans on reforms like better banking supervision, more transparency and reform of the electricity sector to focus subsidies on the poor. The government has reluctantly made some improvements, but its policies and style remain cronyism as usual — and are worsening as May elections approach. President Mejía, who had pledged not to run again, is doing so, a move so unpopular that his party is in rebellion. Dominicans would be better served if instead he spent his remaining months working to strengthen his country's institutions. NYT Editorial

Que el espíritu de la esta navidad haga resurgir en nosotros lo que a veces la rutina acalla y adormece; que rebroten con toda su energía la solidaridad, la esperanza, el sentir al otro "hermano" y no fijarse en su color de piel ni en en su origen ni clase social. Que Dios nos haga a todos mejores, que la paz, amor y amistad reine en cada uno de nuestros hogares y que este próximo año sea un año de éxito, deseos. Pero deseos realizados y fortalecidos. FELICIDADES !!