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BiggerElectricity crisis persists as long as distribution remains politicized, warns economist
Santo Domingo.- Economist Miguel Collado warned that the Dominican Republic’s electricity crisis cannot be solved while distribution remains under political control, arguing that this system eliminates incentives for efficiency and forces citizens to pay for losses they did not cause. “We contribute our taxes to maintain the networks, but we never receive any benefits. If the distributors lose money, the State simply covers it,” he said.
Collado stressed that the sector’s main problem is not generation but distribution, which he described as a long-standing and urgent issue. He noted that despite changes in figures or leadership, the losses persist, highlighting the need for structural reform to improve efficiency and service.
He also expressed concern over the fiscal outlook, following announcements of increased capital spending by Finance Minister Majin Díaz without clear funding plans. Collado emphasized that transparency and depoliticization are essential to resolving both the electricity crisis and ensuring fiscal sustainability, warning that citizens will continue paying more without receiving better services under the current model.
Anyone who has been following the crisis of the electricity sector over many, many, years will undoubtedly say politics has had a strong influence over its operations. Money has been spent in wrong areas for wrong reasons. The sector has been a cultural dumping ground for political favors, especially nepotism. Especially, placing people in positions who have no idea of what their assigned tasks involve. Sometimes they are assigned a ghost job just to receive a check, no need to report to jobsite. Well, “what you sow is what you reap”. The damage has been done. It is going to take years and more blackouts to be endured to unravel the damage this political culture has brought.
Privatize it.
I have a friend who lives in Santo Domingo, and is massively frustrated by the constant outages. The situation worsens instead of improving, and government control is to blame. There is nothing the government can do better than a private company, which depends on consumer satisfaction to remain a viable entity, and stay in business. Government just throws money at a project and then says, “We are working to correct the issues”, while nothing improves, and in many cases, worsens. This industry in RD needs to be privatized to lower costs and increase availability 24/7. A simple solution to an ever growing problem.