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Daily News - 21 March 2001
President Hipolito Mejia travels to Taiwan
President Hipolito Mejia leaves tomorrow for Taiwan for a five-day official visit. The purpose of the trip is to strengthen bilateral relations and to sign agreements for the maintenance of the nation's dams, financing of housing, and production of energy, as reported in the press. Major points on his agenda are:
Meeting with Evergreen shipping company (http://www.evergreen-marine.com.tw/)
Meeting with Eva Air, a Taiwan airline company (http://www.evaair.com.tw/)
Meeting with Taiwan President Chen Shui-bian, exchange of decorations
Visit to Green Festival of I-lan, an agribusiness exhibition. Visit to Taisan Vocational Training Center and Yimei food production operation in Taipei.
Meeting with the president of the National Assembly, Wang Jyng Ping.
Meeting with Taiwan Prime Minister Chan Chun Hsiung.
Meeting of Dominican businessmen and Taiwan businessmen coordinated by the Dominican Investment Office (OPI).
Dinner offered by the Minister of Foreign Relations of Taiwan, Tien Hung Mao.
Conference by the President at the National University of Taiwan on the Taiwan agriculture experience adapted to Latin America and the Caribbean.
News reports say he is traveling with Minister of Foreign Relations Hugo Tolentino Dipp; Secretary of the Presidency Sergio Grullon; Minister of Agriculture Eligio Jaquez; general manager of the state electricity utility Cesar Sanchez; Danilo Rosario of the Dominican Investment Promotion Office (OPI); and the director of press of the Palace, Luis Gonzalez Fabra. He is also traveling with a group of Dominican businessmen, that news reports say include Marino Ginebra, president of the National Council of Business; Rafael Perello, Jerry Dupuy, Luis Viyella, Miguel Sanchez, Pedro Castillo, Banco del Progreso; Ramon Baez Figueroa, Banco Intercontinental; Juan Ramon Gomez Diaz, Canal 5; Jose Clase, president of the Dominican Free Zone Association. Accompanying the President are also Benito Ferreiras, rector of the Superior Institute of Agriculture (ISA) and Carlos Aquino Gonzalez, director of the Inter-American Institute for Cooperation on Agriculture (IICA).
This is the President's 18th trip to Taiwan. Most of these trips he has carried out as a private businessman.
Press debate or a storm in a glass of water
A routine report on freedom in the press in the DR but signs of governmental intolerance in its relations with the press made by Committee for Freedom of the Press president, Rafael Molina Morillo at the mid-year meeting of the Inter American Press Association turned into a storm in a glass of water when President Mejia snapped back at Molina (see http://www.dr1.com/daily/news032001.shtml). Spokesman for the President, Luis Gonzalez Fabra, told the press yesterday that there is no official intolerance against the press. He said that acts of one individual couldn't be interpreted as such. The most criticized among the government by the press is security assistant, Lieutenant Pedro Julio (Pepe) Goico Guerrero whose overzealousness regarding the President's security has created frictions with the press.
Hoy newspaper in its page 2 commentary today says it agrees with president of the PRD Hatuey de Camps that the government needs a spokesman. To add "but is that easy with an unpredictable boss of whom no one knows what he will say next?"
President Mejia rejects building new offices for mayors
President Mejia, at an event in his honor held at the Dominican Municipal League, rejected the building of new offices for city governments throughout the country. He said the priorities of the government are others, that he preferred to fix streets or improve potable water service in the cities and towns. The President said that the offices are "dens of bureaucracy" and will not order any remodeling of new offices. He said that "no one dies because he does not get a new office."
Central Bank assuages fears of passing all fuel purchases to free market
Central Bank Vice Governor Luis Manuel Piantini denied that the government has plans to pass the remaining 15% of fuel purchases to the exchange free market. Already, 85% of fuel purchase dollars are transacted on the free market. He said that the Monetary and Financial Code presently awaiting approval of the Congress already establish a provision to this end, as the new code stipulates there be only one exchange market. At present foreign currency is purchased by the government at RD$16.66, the official rate, while free market operators buy the US dollar at upwards of RD$17. The government dollar purchases made primarily from exporters are used to pay for fuel imports and foreign debt obligations.
Tender prepared for Playa Grande development
Vice Governor of the Central Bank Luis Manuel Piantini said that the Central Bank is preparing a tender to sell the Playa Grande tourism development in the area of Rio San Juan, Maria Trinidad Sanchez province on the North Coast. He said the golf course that is part of that development is valued at US$120 million. Golfers praise this golf course as one of the best in the DR and the Caribbean.
Piantini says that President Mejia favors the Central Bank divesting itself of property it has acquired under special circumstances that does not correspond to the essence of its operation. Other tourism potential development properties are the Montellano sugar fields and the Playa Dorada golf course and other facilities, in Puerto Plata.
The Central Bank also owns the Rosario gold mine that is up for a tender in July.
Electricity company to become one or three companies?
This Monday, the Comision de Asuntos Energeticos had been in agreement with alternatives proposed by the Inter American Development Bank and the World Bank. On Tuesday, the 14-member commission that is in charge of deciding the future of the state electricity utility (CDE) had changed its mind, as per news reports.
Now the CDE will be divested into three companies, as Senator Angel Perez y Perez (PRD-Pedernales) told the press yesterday. Among other modifications in the Energy Bill under study by Congress is the authorization of distributor company affiliates to 30% of the national demand, up from 15% at present.
Also the authorization to municipalities to compensate for being charged for power consumption by the cities and towns by the privatized power distributors by allowing these to charge for the use of the air space, thus one charge would annul the other. Concession terms for 18 months down from 10 years for companies interested in generating power. The idea is to avoid companies from securing concessions to later sell these at a higher price in the future.
National Library to honor Pedro Henriquez Ureña
President Hipolito Mejia by Decree 282-2001 names the National Library the Pedro Henriquez Ureña Library. Henriquez made a name for himself internationally. The announcement coincides with the celebrating of a forum that gathers ministers of culture from Latin America and the Caribbean in Santo Domingo.
Major brokerage companies interested in DR sovereign bonds
Minister of Finance Fernando Alvarez Bogaert said that Salomon, Smith & Barney, Citibank Group Florida, S.P. Morgan, Merryl Lunch, Bear & Stears and Chase Bank investment banking firms have shown an interest in the sovereign bond issuing of the government, as reported in El Siglo.
On the other hand, Minister Alvarez said that tax collections in February were down RD$300 million. He said that many businesses have boycotted the 1.5% monthly tax on gross sales effective this January. He attributed the decline in government income also to the slowdown of the economy as it adapts to the new tax measures.
The economy moreover is cringing from the effect of restrictive monetary policy in place to maintain macroeconomic stability. This has resulted in about a 10-point raise in interest rates that has affected business.
Shippers vs. Fenatrado
Shippers say they will not give an inch in their confrontation with new monopoly aspirations of Fenatrado, the Federacion Nacional de Transporte Dominicano. Fenatrado is a union of truckers that has monopolized transport of cargo in the DR as governments over the years have given in to their clout.
Fenatrado union members demand the right to handle 50% of the lift truck and forklift cargo transported at ports. Manuel Arias Mella, president of the Shippers Association, said that they would accept an increase of 35% in the cost of the service, but would not give in to the 50% demand, as this is work proper of the shipping companies. Neither will they accept the demand for establishment of predetermined work shifts by the truckers union. Blas Peralta, spokesman for Fenatrado, insists that President Mejia has given them the right to 50% of the cargo handled in the country, extending this to the forklift cargo.
To protest the shippers' resisting their demand, Fenatrado stopped transport work at ports. Peralta told the press that they control 90% of ground transport. He said that the strike costs the government RD$100 million a day in revenues.
Shipping rates go up to reflect new taxes
The Shippers Association recently announced an increase of US$35-US$70 on shipments, depending on the size of the cargo. This is to be able to cover the 12% ITBIS tax now levied on shipping operations by the government.
Horacio Alvarez, executive director of the Dominican Exporters Association says that the new shipping cost increase in addition to other new taxes due as of January (5% exchange commission, ITBIS, 30-36% interest rates, deficient and expensive power service) is lethal for the exporting sector. The exporting sector does not have the flexibility of passing these costs on to the consumer. The president of the National Union of Businessmen (UNE), Andres Dauhajre said he does not understand why the government wants to levy the tax on shippers. He said that imported goods are taxed when the merchandise clears Customs.
Focus on education and productivity urged
The president of the Herrera Industrial Association, Antonio Espin spoke up for local business expressing his concern that the government is focusing on measures that are increasing marketing and production costs for business. "While the politicians say they are working in favor of national development and to confront poverty, laws are being enacted to destroy the productive sectors, and actions taken that reduce the capacity of companies to compete," said Espin, one of the few local businessmen who has spoken up against the government.
He said there are two ways to eradicate poverty: education and production. "It is necessary to provide incentives for producers, not costs that create distort competitive advances that these may have," he told Hoy newspaper.
Among new measures implemented by the Mejia administration that were criticized by Espin is the passing of the ruling to implement Law 374-98 that creates a pension plan for mining and metalworking companies. This is rejected by the affected sectors because the pension plan has a 35% cost factor for management of the fund. Also the maintenance of the 5% exchange commission when Mejia had committed to eliminate this once fuel prices were adjusted. Also the new 1.5% monthly tax on gross sales, the increasing from 8 to 12% of the value-added tax. Espin said that business sectors are hurting at the 28% prime interest rate, passing of wage increases, and the increase of values for Customs House clearance.
Melba Vicens announces she has divorced her Italian prince
Spanish and Italian TV darling, Melba Vicens, told the Listin Diario that it is true that she has divorced her Italian Prince, Fulco Ruffo di Calabria. The former Miss Dominican Republic turned international jet setter said she fell in love with Spanish aristocrat, Manuel Garcia Duran. Garcia is described as owner of a telecommunications empire and former director of Antena 3, a Spanish television station. He is 44 years old and is considered one of Spain's most coveted bachelors. Vicens said that when she fell out of love with her Italian prince he was the first to know. "Fulco always was the perfect gentleman with me, and I cannot but thank him for all these wonderful years, but there are things that happen without explanation and I could not play with Fulco's feelings, as I respect him a lot." She said that she has plans to wed Garcia in summer in the DR.
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