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Daily News - 26 June 2002

DR investment up in 2001
The Dominican Republic attracted a significant amount of direct foreign investment last year, making it the exception in Latin America and the Caribbean. El Caribe newspaper reports today on a document released by the Economic Commission for Latin America and the Caribbean (ECLAC) on 17 June. “The Foreign Investment in Latin America and the Caribbean 2001 Report” shows that the DR gained US$1.2 billion in foreign investments that year. Other countries in
the region posting high levels of investment were Trinidad and Tobago with US$636 million, Costa Rica with US$447 million, Guatemala with US$440 million, Jamaica with US$438 million and
Panama with US$250 million. 
According to ECLAC, foreign investment in the Dominican Republic increased 32.4% in 2001. This makes the DR the Central American and Caribbean country to receive the most foreign investment. However, direct foreign investment to the region fell from US$105 billion in 1999 to US$80 billion in 2001. Preliminary data for 2002 shows no sign of a turnaround and events in Argentina and Venezuela are expected to have a negative effect. Despite the regional decline, net receipts from this type of investment still remains above the average for the past five-year period.
ECLAC also reports that there are adverse international economic conditions in the US, Europe and Japan. Another element is China’s enormous attraction to foreign investors. The report also reviews the factors that could encourage more capital inflows and strengthen regional development as well. It indicates that compared to Asia, Latin American countries “tend to limit themselves in the field of productive development policies and, when negotiating bilateral or multilateral investment agreements as well as investment chapters included in free trade treaties, they restrict themselves to providing guarantees and protection to investors, instead of defining their relationship with national development strategy.” They also tend to show some reluctance to make full use of all available financial instruments. To read the executive summary of the report, see http://www.eclac.org

US$3 million in tourism promotion abroad
The Ministry of Tourism Rafael Subervi announced that in the first quarter of this year, the government invested US$3 million in promotion abroad. This amount includes the country’s participation in travel fairs in Spain, Berlin, Sweden, Italy, Colombia and Russia. 
While Subervi acknowledged that travel to the Dominican Republic is down, he said the aggressive promotional campaign should reverse this trend by the year’s end. Subervi just recently returned from what he described as a successful promotional tour that took him to South America (Brazil,
Chile and Peru). 
The Minister disputed findings in a recent Asonahores survey that indicated that the positioning of the Dominican Republic was one of the reasons for the low rates Dominican hotels are reaping from tour operators. He said that during his visit to South America he was able to ascertain that the Dominican Republic is on the contrary favorably positioned in the minds of Latin American travelers. 

Balaguer favors 50% + 1 vote requirement
Chamber of Deputies president Rafaela (Lila) Alburquerque says she has received instructions from the head of her party, former President Balaguer to vote for some but not all of the
constitutional modifications proposed by the Senate. Balaguer favors changing the constitution to allow consecutive presidential re-election and elimination of the closed electoral stations. But he
is against eliminating the 50% plus 1 vote requirement to win the presidency, which usually makes a second ballot necessary. Alburquerque and five other deputies met with the PRSC leader at his
home yesterday. If the Chamber of Deputies changes the bill as it was received from the Senate, it would have to go back to the Senate, further delaying the revision process being promoted by the
PPH faction of the PRD. 
Teodoro Reyes, spokesman for the PLD deputies, alleges that government officers close to President Hipolito Mejia are offering to pay from RD$800,000 to RD$2 million to undecided deputies to buy their support for the constitutional changes. 
Diario Libre says the change to a simple majority vote would reduce the negotiating power of the PRSC while it would allow the PRD, which has the strongest following, to win without the support of another party. As things are at present, to win the presidential race, some sort of alliance has to be formed with one of the other two parties.

RD$40,000 a month pension for 19 deputies
The Chamber of Deputies approved RD$40,000 a month pensions for 19 legislators. This is 66% of the legislators’ present salaries. The bill benefits Ivelisse Prats de Perez, Rafael Kasse Acta, Hector Aristy Pereyra, Jose Joaquin Bido Medina, Rafael Adriano Valdez Hilario, Rosita Fadul, Eligia Morales Abreu, Miriam Abreu de Minguijon, Rafael Gamundi Cordero, Dolores Gonzalez, Daniel Fantino Vargas, Antonio de Leon Cruz, Rolando Pimentel Baralt, Francisco Alba Ovalle, Evarista Caraballod e Feliu, Ambrosina Savinon, Manuel Odalis Mejia, Eduardo Stormy Reynoso Sicard and Octavio Radhames Rodriguez.

Alleged assassin killed in jail
One of the five accused assassins of Senator Dario Gomez was murdered yesterday at the Monte Plata jail. The Senator’s widow, Marina Mercedes, and his sister Senator-elect Celeste Gomez, had just hours before asked that the five receive special protection in jail after learning there was a plan to permanently “shut them up”. Twenty-year-old Carlos Manuel Geronimo Alfonseca (Carlos Collares) died of six knife wounds. He was stabbed while talking on the phone. Fellow inmate, Liborio Heredia Valdez, who was in jail for the murder of his wife, has been accused of the killing. 
Attorney General Virgilio Bello Rosa said a commission has been named to investigate the circumstances of the death.

Senators-elect could resign their posts
Diario Libre reports that two senators-elect might decide not to be sworn in on 16 August because they prefer to stay in their current, more lucrative government jobs. Amable Aristy Castro (PRSC-La Altagracia) is secretary of the Liga Municipal Dominicana that controls the funding of city governments nationwide. And Roberto Rodriguez (PRD-El Seibo) is director of the Instituto Nacional de Aguas Potables y Alcantarillados (INAPA) that controls aqueducts nationwide. Both are very influential figures in their home communities. 

Prostitution scandal in Argentina
The Dominican ambassador to Argentina, Cirilo Castellanos, says he is aware that more than 5,000 Dominican women have been brought to Argentina by a network that offered them jobs as housekeepers and then put them to work as prostitutes. He said he could do nothing to prevent it because he did not have concrete claims from the women involved. 
The International Organization for Migration denounced to the Ministry of Foreign Relations in Santo Domingo that there had been political and diplomatic complicity in the trafficking of the
Dominicans to Buenos Aires. The IOM helped free and send back to the Dominican Republic a 19-year-old woman who was held captive in a Buenos Aires brothel. 
Dominican consul in Argentina, Amanda Cabral (sister to Peggy Cabral, widow of the late PRD leader Jose Francisco Peña Gomez), is said to be involved in this case. Ultima Hora newspaper quotes the Argentinean newspaper Pagina 12 as saying she is being investigated by an Argentinean judge for promoting prostitution and in connection with death threats to women daring to denounce her. Five Dominicans reported the situation to the Attorney General in Argentina. The president of the PRD party in Argentina, Maxima Perez Matos, is also mentioned in the investigations as the owner of a guesthouse where the women were lodged after their arrival in Buenos Aires. Consul
Cabral has admitted having close personal ties with Perez Matos. The arrival of the Dominicans began in the 90s. They were attracted by the high value of the US dollar and the promise of jobs as
housekeepers, nannies or cooks for salaries of about US$1,600 a month. But the real boom in migration began in 1998.  When the scandal made headlines in the Dominican press recently,
President Mejia authorized the government to pay for airline tickets to return 17 Dominicans to the Dominican Republic with their eight children. 
Both Ambassador Cirilo Castellanos and Consul Amanda Cabral denied involvement in the case and said that the organizations that are pinpointing Dominican diplomatic officers should come forth with names of the people accused of the trafficking. Argentinean newspaper Pagina 12, as reported in Ultima Hora, says that one of the women has denounced that Ambassador Castellanos
himself was involved. The newspaper reports that the PRD president in Argentina, Maxima Perez Matos has directed for years the Asociacion Mutual de Dominicanos Residentes en Argentina which is accused of being a front for white slavery. 

Power distributors control market
El Caribe and Hoy newspaper focus today on more details of the government’s wheeling and dealing with the power companies. Many of these deals are now coming into the open after Minister of Finance Jose Lois Malkum said that the current negotiations of the power commission would be transparent. 
The privatization of the power sector in the Dominican Republic involved two players -- power generators and distributors. The idea was to create conditions for more foreign investment in power generation so that any excess in supply would lead to a reduction in the cost of power. The distributors would purchase the power for distribution to residents, while large companies and clusters of consumers could purchase directly from the generators. In practice, this has not happened. 
Instead, the power distributors have invested heavily in generation, violating the Electricity Law’s limit to 15% of demand and getting the compliance of the government to do so.  Hoy newspaper reveals that the two distributors – Union Fenosa (Edesur and Edenorte) and AES (Edeeste) - have both installed generation capacity that is beyond the demands of their territories.  Hoy published the following breakdown today. 

Union Fenosa (Edesur and Edenorte):
This company negotiated a concession to install a 340-megawatt charcoal fueled plant as part of the Madrid Agreement negotiations in 2001. A resolution of the Superintendency of Power granted a concession from UFEN (the association of Union Fenosa and Enron) to install a 500-megawatt plant in Caucedo. Union Fenosa installed, after privatization, the Palamara 102-megawatt and La Vega 87.5-megawatt power plants. They obtained from the government a 15-year contract at a fixed guaranteed rate without a tender. 
Union Fenosa was authorized by the government to generate 1,229.5 megawatts of power when the average demand of their territory does not exceed 1,300 megawatts. 

AES (Edeeste):
This company has 200 megawatts installed in the Los Minas V and Los Minas VI plants. 
It has 27% participation in the Itabo generation plant that has capacity for 570.9 megawatts. 
It is managing Cogentrix, which can generate 300 megawatts. AES is also building the 300-megawatt AES Andres power plant. The AES territory has an average demand of 500 megawatts.

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