Hipólito Mejía
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| Hipólito Mejía | |
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| In office 16 August 2000 – 16 August 2004 |
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| Preceded by | Leonel Fernández |
| Succeeded by | Leonel Fernández |
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| Born | February 22, 1941 Gurabo, Santiago Province |
| Political party | Dominican Revolutionary Party |
| Spouse | Rosa Gómez |
Elected in 2000 as the candidate of the nominally socialist Dominican Revolutionary Party, Hipólito Mejía was lauded as a gregarious, folksy leader, well known for his frequent use of rural expressions during candid, unscripted press briefings. However, widespread mismanagement under his watch, combined with the post-9/11 economic slump and excessive borrowing, quickly overwhelmed his presidency. He is also known for having been among the many corrupt presidents due to the excessive amount of capital being depleted during his presidency[1].
During Mejía's term, the economy shrank and poverty increased, and a sharp increase in the external debt was created. Also during this period, small numbers of Dominican troops were sent to Iraq as part of the Coalition of the Willing, though they were later retracted at about the same time as troops from many other Latin American nations were withdrawn.
Most notably, Mejia's term saw the collapse of Baninter, the country's second largest privately held commercial bank, in a US$2.2B banking fraud and government corruption scandal. The corruption had been long standing, with presidential administrations from all major parties and powerful military figures involved. Though required by law to only guarantee individual deposits of up to $500,000 Dominican Pesos (about US$21,000 at the time of the bank collapse) placed within the country, the Mejía-controlled Dominican Central Bank opted to guarantee all RD$2.2B in unbacked Baninter deposits, regardless of individual amount, regardless of whether deposits were in Pesos or United States Dollars and regardless of whether the deposits were held in the Dominican Republic or in Baninter's branches in the Cayman Islands and Panama. The subsequent fiscal shortfall was equal to 12%-15% of GDP, resulting in massive inflation (42%) and the devaluation of the Peso by over 50%.
The Central Bank's stated reasons for the unlimited payouts to individual depositors were to protect the Dominican banking system from a crisis of confidence and potential chain reaction. However, the overall consequence of the bailout of individual accounts in excess of that required by law (RD$500,000) was to reimburse the wealthiest of foreign and domestic depositors, some of whom had received rates of interest as high as 27% annually, at the expense of the majority of poor Dominicans -- the latter of whom would be required to pay the cost of the bailout through inflation, currency devaluation, government austerity plans and higher taxes over the coming years.
During his term, Mejía attempted to spread government resources and services to thousands of smaller, rural communities scattered around the country instead of the traditional efforts to concentrate on big cities (where most voters live). He established the country's first social security type retirement system, and created a fixed advanced corporate tax of 1.5% to aid in government revenue collection.
Though he had the Dominican constitution modified to allow for his own reelection, and despite a late announced plan to give away tens of thousands of small motorcycles to the electorate were he to be reelected, Mejía was soundly defeated in the presidential elections of May 16, 2004, by former President Leonel Fernández, who campaigned on a platform of stabilizing the economy and reducing inflation. During his term, his party, the PRD, also lost its control of the Dominican congress.
Mejía was a very controversial President. He often used language unbecoming of a statesman and made vulgar references during interviews and speeches aired live on national television. During a summit of Latin American presidents in the Dominican Republic, Mejia borrowed a scooter from a child standing outside of the resort complex and rode it into the conference building, speeding past his stunned international guests.
There were also certain inconsistencies in statements made that did not reflect the actions he was taking. For example, early on he stated that he would not be running for a second term, but closer to election time he said he would in fact be running, and proceeded to berate the journalists that questioned him is regards to his earlier statements. Mejía would many times refer to political opponents in a derogatory manner, going as far as calling into question the sexual preference of his main opponent Leonel Fernández.
| Preceded by Leonel Fernández |
President of the Dominican Republic 16 August 2000 – 16 August 2004 |
Succeeded by Leonel Fernández |
