On August 16, Leonel Fernández Reyna of the Dominican Liberation Party (PLD) was inaugurated as president of the Dominican Republic for a four-year term, replacing Hipólito Mejía of the Dominican Revolutionary Party (PRD), whose reelection bid he defeated easily in the May 16 elections. It was Fernández’s second term; he previously was president from 1996 to 2000. The new vice president is Rafael Albuquerque. (El Nacional (Santo Domingo) 8/17/04)

Fernández’s government is inheriting a troubled economy: $6 billion in foreign debt, 16 percent unemployment, 32 percent inflation and a Dominican peso which has lost half its value against the U.S. dollar in two years. “This crisis will last at least two years and will be painful,” predicts Miguel Ceara-Hatton, an economist with the United Nations Development Program (UNDP) in Santo Domingo. (Miami Herald 8/16/04 from AP)

In his inaugural speech before the National Assembly, Fernández announced he would institute an austerity plan in the government, cracking down on excess government posts and perks. “But at the same time that measures are taken to significantly reduce the government’s expense budget, it is essential that the National Congress approve, within the shortest time possible, the fiscal reform project which has been submitted to it, and which was the result of the previous administration’s accord with the International Monetary Fund (IMF),” said Fernández. (EN 8/17/04) The PLD’s reform proposal would raise taxes between 10 percent and 20 percent on tobacco, alcohol, phone services and international travel; it has stalled in the Senate, where the PRD holds 29 of 32 seats. (MH 8/16/04 from AP)

While pledging to eliminate graft and corruption, Fernández drew criticism for giving top posts in his new administration to four former officials linked to an embezzlement scandal. All four served in the first Fernández administration, from 1996 to 2000, and all have trials pending on charges stemming from the alleged disappearance of $100 million from the Temporary and Minimal Employment Program, a fund intended to create jobs and quell strikes. Fernández named the program’s ex-coordinator, Luis Inchausti—arrested on embezzlement charges in 2001—as secretary of state without portfolio, traditionally a top presidential adviser. Former public works secretary Diandino Peña has now been appointed to head a subway construction project; former administrative secretary Simón Lizardo is now the nation’s top auditor; and former auditor Haivanjoe Ng Cortiña will regulate the Santo Domingo Stock Exchange. The latter three are charged with negligence by allowing the embezzlement. All four say they are innocent. No trial dates have been set. (MH 8/21/04 from AP)

On August 17, Fernández replaced all the top military brass. The new armed forces secretary is Adm. Sigfrido Pared Pérez, who was intelligence chief in Fernández’s previous administration and is the brother of PLD secretary general Reinaldo Pared. Fernández named Maj. Gen. José Ricardo Estrella to head the army, Vice Adm. César Augusto Dewint Ruiz to lead the navy, and Maj. Gen. Nelson Marmolejos as the new air force chief. Fernández also replaced the heads of the National Police, the National Investigations Department and the National Drug Control Department. Government sources say Fernández will soon move to retire between 50 and 100 military generals—the country has more than 100, which Fernández called “excessive.” (CNN en Español 8/17/04 from Reuters; EN 8/19/04).

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