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Daily News - 1 February 2002

Aviation Board rules in favor of competition
The Civil Aviation Board seems to be in favor of increased competition in Dominican skies. The CAB has annulled Resolution 281 issued in 1999 that granted the bankrupt state carrier, Dominicana Airlines, exclusivity on routes to the United States for a seven-year period. The measure had been enacted to make Dominicana more attractive to investors during its privatization. 
Aeropostal, a Venezuelan private airline, won the privatization bid in September 2001, despite doubts that Aeropostal would have the resources to successfully operate the airline. But the airline has not met contractual obligations stipulated in the privatization plan. Airline spokesmen have already protested the change in the rules of the game. Now it seems unlikely that Aeropostal will be Dominicana Airline’s next partner. 
The Civil Aviation Board recently ruled to allow Dominicans to purchase air-only space on charter airlines traveling to the DR.

France to request Schuller’s extradition
Foreign Relations Minister Hugo Tolentino Dipp said the government of France has formally announced its intention to request the extradition of Didier Schuller and his wife Christel Delaval. The Minister met yesterday with charge d’affairs of the French Embassy Julien Perrier. 
Didier Schuller became a legal resident of the DR in 1995. He has lived in the DR under the false identity of Jean Wiser from Belgium. He told Le Monde newspaper that he would return to France to explain, as he is tired of living on the run. He moved to Santo Domingo after leaving his rented home in Sea Horse Ranch. 
He said he does not want his statements to contribute to the defeat of President Jacques Chirac in the next presidential elections (21 April and 5 May). French Minister of Justice Marylise Lebranch confirmed that the petition for extradition was in process. But she says it would be better if Schuller returned voluntarily.
Schuller said he has freedom of movement in the DR, and that he is not under police surveillance.
For more information, see (in French) http://www.lemonde.fr/article/0,5987,3226--260637-VT,00.html

Reasons for peso’s declining value
The Superintendent of Banks under the Fernandez administration told Hoy newspaper that the increasing indebtedness of the government with local banks is the main cause of the pronounced devaluation of the peso. Economist Vicente Bengoa said the borrowing has increased the amount of money in circulation and has the same effect as printing money (inorganicos) without sufficient reserves. 
He said the Mejia government borrowed RD$5.4 billion last year, of which RD$4 billion was used to finance government spending, primarily government employee wages. 
Bengoa acknowledged that it is normal for the peso to decline against the dollar in January because companies purchase dollars in large volume to restock their inventories. But Bengoa feels the present decline is greater than normal levels.

Emam Zade: “Peso was overvalued”
Economist Frederic Emam Zade says the Dominican peso, which the government held for many months at RD$16.67, was overvalued by around 25%-30%. This means the real market value of the peso should be around RD$21.66. He said floating the peso was the correct move. 
Emam Zade made the statement in reply to a question posted on the Business Forum of DR1. Emam Zade is the head of the economic department of the Fundacion Global Democracia y Desarrollo of former President Leonel Fernandez. He was also the former trade negotiator for the country under the Fernandez government.
He explained that there are several market forces in play that could keep the peso from making an adjustment to its real market value. Among them are: 
35% increase in the amount of pesos circulating. 
Less demand for dollars for import.
Less supply of dollars from exports, tourism and remittances. 
Capital entering the country. 
Foreign investment increasing. 
Higher interest rates in the DR than in US. 
Low Inflation.
Emam Zade says, “The wisest thing the Central Bank did was to let it float so it reaches its real market level.” He clarified that the Central Bank cannot know for sure what the real equilibrium market rate is. 
The Central Bank posted a rate of RD$17.10 for 1 February. Banks and exchange houses were buying dollars at RD$17.20-RD$17.30 yesterday, and some banks were selling up to RD$18.20.

Blaming department heads for late paychecks
National Treasurer Pastora Mendez, as reported in the Listin Diario, said government department heads are to blame when government employees receive their paychecks late. She said her department only writes up the checks from payroll lists provided by the departments and it processes the checks within two days of receiving the lists. She said that neither the Budget Office nor her office, the National Treasury, can be blamed for the delays.
“It is simply that sometimes, with the many changes there continuously are on the payroll, it takes time for each department to send them in,” she said. 
The Ministry of Public Health and the Ministry of Education are among the departments experiencing the most problems paying their personnel. Between the two, they have over 20,000 employees.

Government payroll eats biggest chunk of revenues
El Caribe newspaper reports that the government spent RD$2.2 billion more on its payroll in 2001 compared to 2000. This is a 15.7% increase. The government increased wages last year 10%. 
More than 330,000 people are employed in government however critics say the government would be more efficient with half the staff.
The Mejia administration payroll last year was RD$16.3 billion, up from RD$14 billion in 2000, according to the National Budget publications. 

President resigns from PRI
President Hipolito Mejia notified the Partido Revolucionario Independiente (PRI) that he was turning down the honorary presidency of that organization, an honor he had accepted last year. He said he declines the position because of the irritation it caused within the Partido Revolucionaro Dominicano, the ruling party. 
Eligio Jaquez, head of the Proyecto Presidencial Hipolito (PPH), told the press that the President of the PRI, Ivan Rondon Sanchez, would accept the resignation. 
Meanwhile, he also stated the PPH would continue to lobby Congress to reform the constitution to allow consecutive presidential re-election.

Vladimir Guerrero: Caribbean Series big attraction
Vladimir Guerrero (Montreal Expos-Estrellas) and Miguel Tejada (Oakland Athletics-Aguilas) will be going to bat for the Dominican Republic in the Caribbean Series. The Series opens tomorrow in Caracas, Venezuela. The winners of the championships in Venezuela (Navagantes del Magallanes), Mexico (Tomateros de Culiacan) and Puerto Rico (Vaqueros de Bayamon) now don their countries’ colors in the battle for the regional title. The championship starts Saturday, 2 February and will end Friday, 8 February. 
The Dominican Republic is the reigning Caribbean Champ, thanks to the Aguilas Cibaeñas winning it last year. But, the Tigres de Licey, which will be representing the DR this year, have won the most Caribbean Series titles ever, with eight. Their last victory was three years ago in Puerto Rico. 
Licey players traveling to Venezuela are: pitchers Manuel Aybar, Dario Perez and Rafael Roque. They will be joined by pitchers Odalis Perez (Estrellas), Willie Roberts (Estrellas), Efrain Valdez (Estrellas), Esteban Yan (Estrellas), Jesus Peña (Aguilas), Luis Vizcaino (Aguilas), Joaquin Benoit (Aguilas), Benito Baez (Aguilas) and Miguel Batista (Pollos). 
Other Licey players that will be traveling are: D’Angelo Jimenez, Ronnie Belliard, Israel Alcantara, Henry Mateo and Andy Abad. Joining them will be Abraham Nuñez (Estrellas), Cesar Devares (Estrellas) and Alberto Castillo (Aguilas). 
Felix Rodriguez, Jose Nuñez, Felix Jose, Manny Martinez, Luis Castillo will not be able to make the trip.
The Licey’s first game will take place tomorrow, Saturday afternoon. The
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