Having an incumbent president pass on the
sash of office to his successor is still a rare occur-
rence in the Dominican Republic. Guzmin’s
July suicide once more preempted this symbol
of continuity and propelled Vice President
Jacobo Majluta temporarily to the post he had
long been eyeing.
Majluta used his forty-day presidency to
recoup his political image following months of
divisive party faction fights and charges of dis-
honesty. He worked well with the party, inau-
gurating PRD anti-corruption measures such
as state company audits. He managed to receive
the kudos which should have been Jorge Blan-
co’s by lowering prices, decrying speculation
and raising public sector doctors’ salaries.
Already campaigning for 1986, Majluta left the
National Palace a candidate; and he left Jorge
Blanco with only austerity tasks to implement.
Jorge Blanco set the tone in his August 16 in-
auguration speech: “By voting for us the people
voted for morality and austerity, the fundamen-
tal pillars of our government’s program.”
Morality, because rumors of corruption during
Guzman’s administration were rife, and had
reportedly led the President to suicide. Auster-
ity because, by all accounts, all accounts were
empty.
The Central Bank, devoid of reserves, was
nearly $400 million behind in its commercial
payments, and overdue debts had piled up
above $200 million. The 1982 balance of
payments deficit was already $560 million; the
government budget deficit was even higher.
More than 150 capital city businesses were
verging on bankruptcy, low world prices had
caused Falconbridge’s nickel operations to be
closed all year and now Alcoa was threatening
33NACLA Report
to retire from its bauxite operations. By
September’s end, the CEA would cease all in-
ternational sales.
More than a leader was needed: a consensus
of sacrifice had to be forged. “This crisis will be
overcome only with great effort and with the
sacrifice of all Dominicans, especially the most
economically powerful classes,” Jorge Blanco
prefaced his program.
If anyone could inspire trust that austerity
would be shared, it was Jorge Blanco. He was
known as a politician of liberal convictions, an
honest lawyer, a family man to boot. The
presence of Reagan’s inaugural delegate, Ells-
worth Bunker, evoked another memory which
spoke to Jorge Blanco’s principles: the last time
Bunker and Jorge Blanco had been face to face
was over the negotiating table in 1965, follow-
ing the U.S. troop invasion. Bunker’s words
were weighted with the U.S. threat to bomb
Santo Domingo. Jorge Blanco, representing
thousands of Constitutionalist fighters still
pressing on in the streets, stood up to U.S.
demands, minimizing political losses in a no-
win situation.
Many elements of Jorge Blanco’s program
suggested a brand of reformism capable of
legitimizing the skewed distribution of wealth
and economic growth. Measures to continue
the wage freeze and lengthen the work day were
cushioned by the promise of a literacy campaign
to teach 200,000 to read, mainly through the
volunteer labor of thousands of party rank and
file; generous tax incentives to agroexporters
were offset by a commitment to reclaim for
redistribution to 8,000 families each year the
thousands of acres of government land in the
hands of individuals; an end to non-food price
controls was offset by basic food price stabiliza-
tion and the establishment of a sort of food
stamp program.
Business would pay too, it seemed, through a
ceiling on dividends and brakes on capital
flight. From urban property owners the govern-
ment would exact a real estate tax; from specu-
lators, a capital gains tax. The President himself
made a hit by taking a 40% salary cut and by
reducing bureaucratic wage levels. Meticulous
in his reference to the party as his guide, and to
the people as the PRD’s source of strength, on
the first day it seemed that Jorge Blanco’s
popularity could survive even in the face of
austerity.
But a crisis is a period of readjustment and
realignment, and the coming months promise
to be volatile ones. On the one hand is Jorge
Blanco’s recognition that he cannot afford to
lose the allegiance of the popular sectors. On the
other, the constraints of economic crisis have
never been so great; domestic business interests
and international business pressures are calling
for a tune that is hard for everyone to sing
together.
In late October the country reached a tenta-
tive agreement with the IMF on a three-year
credit package worth $467 million. While
details of the agreement were not made public,
the government did commit itself to substan-
tially reduce the budget deficits, raise local in-
terest rates and not implement any import
restrictions-including Jorge Blanco’s pro-
posed ban on the import of food and luxury
goods. The peso had been effectively devalued
by 50% through the earlier institutionalization
of the parallel market via the commercial banks.
These measures, together with the PRD’s
economic recovery program, may ultimately
prove irreconcilable with continued popular
support. To the people, Jorge Blanco had
promised no public sector layoffs; to the IMF, a
hefty reduction in public spending. The gov-
ernment’s emphasis on construction made the
unemployed hopeful about jobs; but builders
and buyers would now face interest rates closer
to the U.S. level. The wage freeze is certain to
continue, but prices will surely spiral as electric
rates are increased to counter the state utility’s
deficit, lessened export restrictions diminish
local food supply and the parallel market rate
reduces the import purchase power of the peso
by half.
That Jorge Blanco will provide a climate of
economic freedom to business has never been a
question. The central concern now, given how
the population responded over the last four
years to price increases and economic malaise,
is whether he can maintain a climate of political
freedom for all. The IMF, short on tolerance for
the often drawn-out strikes and mobilizations
which characterized the Guzmin period, will be
measuring government performance every
three months. With the clash between expecta-
tions and reality promising to be more acute
than ever, the future of the popular movements,
the PRD and Jorge Blanco himself is at best
uncertain.
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