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Welcome to Washington
 Mr. Dominican President, Hipólito Mejía

Charles Willson
Research Associate
Council on Hemispheric Affairs (COHA) (1)
19 May 2003
Memorandum to the Press 03.23
Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere

COHA Research Memorandum: (1)

  • A once admirable leader grows increasingly unaccountable, even to those closest to him in the day-to-day running of the government.

  • Mejía yields to the tough talk of the U.S. ambassador by joining the ‘coalition of the willing’ in the war in Iraq, against the wishes of his own foreign minister, who subsequently resigned.

  • Mejía announces his intention to seek re-election, going against his own declarations condemning the ‘continuismo’ of former Dominican leaders. The announcement has shaken his own political party, as well as the island nation, whose Constitution forbids running for a consecutive second term.

  • Efforts at social development and economic recovery after 9/11 have proven disappointing, and his powerful mandate from his landslide victory in 2000 is being frittered away. Protests over increased electricity bills sent out by the foreign owners of power plants which were privatized by his predecessor, as well as frequent power outages have filled the streets of Santo Domingo in recent months.

  • Attacks are coming from all sides as President Mejía retrenches and plans for budgetary austerity and strengthening free trade links to the U.S.

A President Who Has Gone Astray

Head and shoulders above any recent leader of the country, nevertheless things have not gone very well for President Hipólito Mejía, who will be meeting with President Bush at the White House tomorrow. What began as a season of hope for his nation due to his impeccable credentials as former minister of agriculture is rapidly becoming grounds for despair. In March, when the country was pressed into joining the ‘coalition of the willing’ by the importunings of the U.S. ambassador in Santo Domingo, Mejía’s foreign minister, Hugo Tolentino Dipp, dramatically resigned in order to register his own opposition to the war. Rather than stand by Tolentino, Mejía replaced him with Frank Guerrero Pratts, the central bank chief – a man who already had been failing to deal effectively with the country’s economic downturn. Pratts undoubtedly relished the opportunity to abdicate his position in finance, as the popular resentment against the Mejía administration and the public’s unhappiness over the flagging economy was only just beginning to ferment.

Already hurt by 9/11, the country’s tourism industry was dealt a killer blow by the Iraq war. This reflected a similar situation throughout the Caribbean, which witnessed a marked drop in air flights and the downward plunge of the region’s all-important tourist industry. In the Dominican Republic, the fall off in visitors helped bring about a loss of $450 million in revenues between September 2001 and December 2002. This shortfall, coupled with the increasingly frequent blackouts (while twenty percent increases in power bills to the average consumer have not been able to hold the line), has added to the already widespread popular dissent against the government. When Mejía introduced his unpopular economic recovery package, which withdrew millions of dollars from circulation and vowed to limit government expenditures, he completed a 180-degree turn from the optimism and calls for change featured in his campaign speeches, which outlined far-reaching social programs funded by increased taxes and fuel surcharges.

Mejía then came forth with his explosive announcement of April 27 revealing his intentions to seek another term in 2004, thereby reneging on the promise he had made in his campaign, which he had reiterated as recently as last July. This alienated not only the island’s populace but members of his own party as well. What the island needs is not another four-year term of mediocre performance, but a brilliant performance that will end next year with his stepping down a revered figure.

Caught Up In Scandal?

After criticizing the free-market policies of former president Leonel Fernandez Reyna early on, President Mejía reversed himself and proceeded to spearhead an initiative which included a plan to create a U.S.-controlled free trade zone along the Dominican-Haiti border as a part of the Debt for Development Program backed by the Inter-American Development Bank. The initiative is part of what is known as the Dominican-Haitian Investment Funds’ Bilateral Holding Corporation, or the “Hispaniola Fund.” Historically, free trade zones have offered little tolerance for the role of worker organizations and have been notorious for tolerating poor working conditions. When a coalition of U.S. student groups last month successfully lobbied Reebok and Nike to increase the wages and improve workers’ conditions in one of the Dominican Republic’s largest free trade zone-located factories, the story served as a powerful reminder of Mejía’s failure to prioritize workers’ rights in his economic plan after coming to office. The symbolic fact that, among its other product lines, the factory makes sporting goods for sale in the U.S., including apparel depicting Mejía’s alma mater, the University of North Carolina, was not lost on those closely following the story. Mejía defended the free trade zone as creating jobs and prosperity; meanwhile, many Haitians saw it as affront to their sovereignty, and exploitative and demeaning of its workers.

Heady Beginnings

The story of the Mejía presidency began with great flourish. He came to power in 2000 by vanquishing the corrupt rule of Fernandez’s Partido de la Liberacion Dominicana (PLD) as well as dealing a final blow to Joaquin Balaguer, the country’s ancient presence – whose presidency for six non-consecutive terms helped bankrupt the nation, while bringing disgrace to his own Partido Reformista Social Cristiano – before the cynical patriarch’s unlamented death in 2002. Attorney General Janet Reno, South Korean President Chen Shui-bian, and Spain’s Crown Prince Felipe attended Mejía’s inauguration.

Mejía’s 2000 victory approached being a landslide. In the general election, Mejía received approximately 50 percent of the vote. His two closest opponents (Balaguer and Danilo Medina, the candidate of the incumbent PLD) could only muster around 25 percent each. International observers – accustomed to routinely dismissing in advance the results of past Dominican elections – upheld the Mejía victory as unblemished. By spectacularly wrenching power from the venal ruling party, Mejía promised to end gridlock in lawmaking and to take strong action for change.

Mejía promised to use his international credibility along with the mandate provided by his impressive electoral victory to focus on education, healthcare, food, and housing. In the opening days of the Mejía presidency, great strides were made. A Corruption Prevention Department (DEPRECO) was established to take charge of the new administration’s “National Plan for Fighting Against and Preventing Corruption,” as well as, presumably, to undertake a full investigation into the rampant corruption of its predecessor, Leonel Fernandez Reyna’s administration. Unlike his predecessor, Mejía properly focused less on the development of an ever-larger tourism industry, which he saw as favoring the few over the many. He took the lead in the region in working with the World Bank in trying to establish useful programs for the prevention and control of HIV/AIDS. An agronomist by trade, Mejía told the nation that agriculture and the environment would receive the attention and the amount of aid that both sectors deserved. Mejía also vowed to review the privatization measures of Fernandez, in order to create an “economy with a human face.”

A Disappointing End?

Increasingly, though, the human face on the economy has come from the Bush Administration and not arising from within Mejia’s own nation. In contrast to his initial promises to put some “distance” in the suffocating relations that Fernandez had enjoyed with the U.S., Mejía’s recent diplomacy seems to have represented a desire to find common ground with Washington at almost any price. Other than the tri-lateral free trade zone agreement with Haiti and the U.S., the most notable example of his zeal to tighten his relationship with Washington is the pending bilateral free trade agreement that Mejía will be discussing tomorrow with President Bush. The Dominican leader’s policy, which initially focused on using government resources to address social issues – particularly housing – has given way to his recent calls for austerity in government spending in the face of economic contraction and inflation. His early commitment to making the distribution of wealth more equitable, soon gave way to a renewed commitment to neo-liberal reforms and cooperation with international lending organizations (such as Deutsche Bank in Germany, and HBSC of the United Kingdom), in carrying forth orthodox economic policies, which were good for business, but not necessarily much of the electorate.

Earlier this year, thousands of protestors marched on Santo Domingo to protest the Mejía administration’s new economic recovery program. In December, a poll indicated that while 84 percent of Dominicans believed there is still corruption in government – a major issue Mejía promised to address once in office – only a slight majority felt the current administration is taking sufficient steps to eradicate it. While seven members of the Fernandez administration have been prosecuted on embezzlement charges, Fernandez himself remains uncharged after Mejía apparently intervened and halted an ongoing investigation of his possible participation in embezzlement plots. This gave the appearance that Mejía’s policy is to allow Fernandez to be an untouchable as far as having to face up to any crime he may have committed, perhaps serving as a role model of damage control in the case that Mejía himself faces any possible future embarrassment of this kind.

Hunter Becomes the Hunted

The unaddressed inequalities existing in the Dominican Republic, along with the failure to prosecute ex-president Fernandez and his major associates, represent at least a failure of will on the part of the Mejía administration to follow through and take aim at the 2000 campaign’s two biggest targets. In the early years of his administration, he seemed to have both of these on the run. Today, though, both the old nemesis and the old problems remain, as visible as ever – almost certainly to the detriment of Mejía’s credibility and the viability of his re-election bid.

Ever growing troubles may lie ahead for Mejía’s possible re-election campaign. On May 15, government officials arrested, among others, Ramón Báez Figueroa, a media mogul who was also president of the now-defunct Banco Intercontinental (known as “Baninter”). The case is front-page news – Báez Figueroa is charged with helping to defraud the Bank of $2.2 billion – and Mejía himself may not be able to avoid its taint. Báez Figueroa claims that the missing funds went not into his pockets, but to contributions which included gifts to the country’s major political parties. One such gift, which the government’s Central Bank acknowledges, is an SUV purchased for Mejía by the generous magnate. Suspicions surrounding the Mejía government have also been aroused because officials attempted to hide evidence of the investigation from public view until it was ready to announce the indictments.

In the context of the government’s arrest and detention of Báez Figueroa, a number of his properties have been seized, including the Dominican Republic’s oldest newspaper, Listín Diario, and 70 radio stations and four television stations controlled by Báez Figueroa’s interests. Mejía’s opponents fear that the seizure of the media outlets had less to do with money laundering charges against Báez Figueroa than with Mejía’s desire to quiet some if his loudest critics. In 2000, Listín endorsed Danilo Medina, the candidate of Fernandez’s Dominican Liberation Party. Baninter then retained Fernandez’s law firm at almost $6,000 a month.

Troubles lie ahead for Mejía even given tenuous ties to the case. The enormous amount of money involved in the scandal (equal to about 80 percent of the Dominican government’s annual budget), and the clandestine nature of the investigation up to this point both serve to paint a murky picture. But Mejía, by association, hardly emerges as the bourgeois Guapo de Gurabo (the tough guy from Gurabo) of his campaign.

Before Mejía can even think of trying to run for another four years in office, however, he will have to assemble a coalition of party members willing to give him the nomination to seek re-election in the first place – hardly likely to prove to be a cake-walk. Any number of well-meaning Dominicans have come to believe that if the Partido Revolucionario Dominicano’s Francisco Peña Gomez were alive, the venerated soul of Mejía’s party would be deeply troubled by the current president’s listless and uninspiring track record up to this point.

 

1.) The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being “one of the nation’s most respected bodies of scholars and policy makers.” For more information, please see our web page at www.coha.org ; or contact our Washington offices by phone (202) 216-9261, fax (202) 223-6035, or email coha@coha.org  

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May 26, 2003

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