294. Telegram 913 From the Embassy in the Dominican Republic to the Department of State1 2
Subj:
- Balaguer Announces “Revolutionary” Program
1. Summary: Among measures proposed in President Balaguer’s Independence Day speech are expropriations, limitations on landholdings and other agrarian reform measures which indicate that the focus of the President’s and the government’s concern will be on the “campo” for some time to come. The speech is a significant piece of political oratory seemingly designed to recast public image of his government and provides program which can serve President as political platform for the future. End summary.
2. In his February 27 Independence Day speech, President Balaguer outlined far-reaching program of rural economic and social reforms and cited his proposed commitment to nationalism and “revolutionary” changes designed to improve lot of underprivileged campesino masses. Speech seems calculated effort to broaden political base and alter conservative political image of present regime. Balaguer seems intent on developing popular and progressive program which could serve as political platform for balance of his term and even beyond. Political portion of President’s speech is replete with reference to need for fundamental reforms, many of which have long been advocated in general terms by opposition, particularly the PRD. With uncharacteristic zeal, President insisted that his government is truly revolutionary and nationalistic, through deeds not mere words. He vehemently rejected opposition charges that his regime serves as instrument of conservative oligarchs and pointedly called upon wealthy classes to accept reforms as necessary [Page 2] for their survival. In this context, Balaguer’s, speech, quite apart from economic merits of its proposals, seemed a deliberate effort to snatch political ground away from PRD and leftist critics by publicly embracing reforms which they have advocated and by seeking to identify present government with needs and aspirations of underprivileged.
3. Specifically, the President pinpointed unemployment and the attendant social and political unrest as the major national problem; and stressed the need to devote additional resources to agricultural sector, which he defined as backbone of economy. Among social and economic programs advocated in speech were measures to (a) limit size of latifundios (b) expropriate with compensation rice lands irrigated by government-constructed dams and canals and lands not being used productively (c) reduce exploitation of tenant farmers through GODR review of tenancy contracts (d) provide improved housing and shoes to campesinos, and additional public housing for urban workers (e) speed up existing agrarian reform program (f) intensify rural works program and (g) improve productivity of sugar production without putting more land into sugar. President promised there would be ample opportunity for public debate of these proposals.
4. The President said the current high prices for sugar and coffee were not permanent and warned that the Dominican Republic had to prepare for the day when these prices would return to more normal levels.
5. He stated that the use of official exchange for motor vehicles and certain other sumptuary imports would be eliminated; and the present parallel exchange market would be continued, but under a revised system so that it would function with certain restrictions rather than with unlimited autonomy as heretofore. Moreover, the President promised that the government would adopt measures to protect foreign exchange reserves so as not to limit desirable and necessary monetary expansion in the dominican economy.
6. President pointedly claimed that those advocating violence have lost support and asserted that Dominican youth are adopting a more peaceful and constructive attitude toward the nation’s problems. [Page 3] while briefly acknowledging need for judicial and other reforms to strengthen the democratic system and safeguard human rights, Balaguer stressed that maintenance of law and order must have equal priority if country is to progress.
7. No reference was made to foreign affairs in speech, and usual reference to close relations with United States was omitted, with concentration almost exclusively on domestic matters. In final passages of speech President sounded nationalistic note by declaring he and his government were the real revolutionaries, a fact which was proven by their willingness in the past to take nationalization action when in the interests of the nation. (Reference was made to the United Fruit Company operation and other agro projects which proved unsuccessful and were discontinued by owners).
[Page 4]8. Comment: Balaguer’s proposed new program could have a significant political and economic impact, even though individual proposals contain sizeable loopholes and some of them are not likely to be enacted in proposed form or, if enacted, are not likely to be effectively implemented. On political side, President’s proposals give his regime additional leverage for negotiating with certain economic interests which otherwise might be less than enthusiastic in supporting his government. On economic side, even if Balaguer’s threat against large landowners remains only threat, many of them may feel constrained to take some action to place idle lands into production and to treat their agricultural workers and tenant farmers better.
9. The President’s plan to eliminate the import of major vehicles and other sumptuary imports with official exchange, to establish limitations on the functioning of the parallel market, to adopt other measures to protect foreign exchange reserves while permitting what he describes as a necessary and desirable monetary expansion, together with his identification of unemployment as the country’s most serious economic problem, suggest that he is giving serious thought to continuing or even increasing current rate of monetary expansion, despite concerns expressed by recent IMF mission (SD 0748) that even current rate of monetary expansion would cause severe balance of payments pressures once sugar “windfall” disappeared.
[Page 5]10. We share the President’s view that unemployment is the country’s most serious economic problem, as well as the great importance he attached in the speech to the task of providing land to landless campesinos. We also agree that the expansion of agricultural output and agricultural exports is essential for the economic well-being of the country.