Dominican Discontent on the Rise

SEVEN million Dominicans are waiting for their longtime, but politically weakened, President Joaquin Balaguer to decide the future of their country. Discontent is rising, and political analysts here are worried that frustration could lead to violent protests, as occurred in 1984, when more than 100 people died. Dominicans are irritable because inflation is headed toward 60 percent this year, the economy is not growing, and unemployment is about 25 percent.

The people of this Spanish-speaking democracy must also deal with almost daily electricity blackouts that last 12 to 24 hours because the state-owned utility cannot meet electrical demand.

``On top of the prices and everything, we don't have light,'' complains Altagracia Sanchez, as she sits in the darkness outside her home on a hot evening. Power has been off since noon. ``I don't know what the government thinks it's doing,'' she says.

Many Dominicans believe conditions will get worse before getting better. Principal and interest payments owed on the $4 billion foreign debt have exceeded $900 million, and the country is having difficulty paying for essential imports, such as oil.

The government, which promises to announce its economic policy after the Aug. 16 presidential inauguration, has said discussions with foreign lenders have begun. Many Dominicans expect international banks will demand cuts in government spending before new loans are granted.

``The country has to understand that measures are necessary which will require a lot of sacrifice,'' Mr. Balaguer said recently. ``But in the long run they will be very useful and will clean up the problems facing the Dominican economy.''

Balaguer, an octogenarian who is blind, was president from 1966 to 1978. He was returned to office in 1986, and again in May. The grandfatherly, but wily conservative, is a hard-working fighter who has tried to gain political support by using subsidies to keep the prices of essentials such as food, gasoline, and public transport artificially low. He has also spent millions on roads, waterworks, schools, and housing.

Some construction projects, such as the enormous $40 million Columbus Lighthouse, are criticized as grandiose and wasteful. This monument is being built to celebrate the 500th anniversary in 1992 of Columbus's visit to the island of Hispaniola, which the Dominican Republic shares with Haiti. But even critics agree some of the investment in infrastructure will help the economy grow.

Nonetheless, the spending, on top of deficits run up by dozens of mismanaged state-owned companies, has been too much.

Andr'es Dauhajre, an economist who heads the Economy and Development Foundation in Santo Domingo, says Balaguer did too much too fast in recent years. ``The money supply exploded,'' says Mr. Dauhajre. Now Balaguer has little room to maneuver.

The country's largest businesses are demanding a fiscal program that would appeal to the International Monetary Fund and foreign banks: cuts in government spending, privatization of state-owned companies, and devaluation of the Dominican peso.

But labor and other mass organizations are in no mood for a tight budget. ``The government will get a quick and bruising response if it tries to move too quickly and to take measures that hurt labor,'' warns Fernando de la Rosa, a labor union official.

So Balaguer must negotiate an agreement. This would be difficult for even a politically strong leader. But Balaguer won the May 16 elections by just 25,000 votes out of 1.9 million cast, according to the preliminary count.

Moreover, the second-place finisher, archrival Juan Bosch, charges the election was rigged. Jos'e Francisco Pena G'omez, who placed third, has also cried foul.

The charges have delayed the final count. But Julio Brea Franco, a consultant who advised the Electoral Commission, says the victory will doubtless go to Balaguer. The question of the legitimacy of the election is now moot, says Wilfredo Lozano, a political science professor at the Latin American Faculty of Social Sciences. ``The people believe there was fraud, whether there was or not,'' he says.

The charges have weakened Balaguer, poisoned the political climate, and made any accord on tough anti-inflation measures difficult, Professor Lozano says.

Balaguer recently said he will overhaul his Cabinet and that some subsidized prices will be raised. He has not said when or by how much. Dauhajre says Balaguer has little choice but to adopt austerity measures to control government spending and fight inflation. ``I am optimistic'' he will do this, Dauhajre says.

But other analysts argue Balaguer will be unable to convince his antagonistic political opponents to support such an unpopular policy. And the longtime president does not have the political muscle to force such a policy.

Balaguer's chief economic advisor, Juan Jose Arteaga, hinted that his boss will shy away from a tough decision - a move not destined to win favor among foreign banks or the business sector.

``We need to make adjustments, but adjustments that Dominicans accept,'' Mr. Arteaga says. ``We will shift expenditures, but not cut them.''