Dauhajre on ratings

“I don’t understand the reasons. The Dominican Republic has
better macroeconomic indicators and a better record than Costa
Rica. Just compare both countries’ GDP growth, inflation,
unemployment, public sector deficit, quasi-fiscal central bank
losses, implicit pension debt, non-performing loans in the banking
system, domestic savings and investment, current account deficit,
exports diversification in goods and services, public sector debt –
both domestic and external – as percentage of GDP, external debt as
a percentage of exports of goods and services, debt service ratio,
foreign exchange reserves net of sovereign bonds outstanding, and
remittances, and you will reach your own conclusions. The DR has a
more open and privatized economy than Costa Rica. The DR has a
track record on economic reform more impressive than Costa Rica’s.
In addition, the DR has shown a much greater resilience than Costa
Rica in dealing with external shocks. In spite of this, Moody’s and
Standard&Poor’s each give a better rating to Costa Rica than to
the Dominican Republic. Nobody, absolutely nobody, will convince me
that Costa Rica should be better rated than the Dominican Republic.
We respect the job done by Moody’s and Standard&Poor’s. But
nobody can ask the Government of the Dominican Republic to accept
as valid a rating by Moody’s and Standard&Poor’s that cannot be
defended when an objective comparative analysis is made.”

Dr Andrés Dauhajre is Executive Director of the Dominican
Republic’s Medium-Term External Financing Unit.