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Daily News - 1 August 2002

Restrictions on state borrowing
The Mejia administration ruled that government institutions could no longer take on debt with suppliers of goods and services, nor borrow in the name of the state, without the previous authorization of the Ministry of Finance. The Ministry of Finance said that debt taken on without this authorization will not be honored by the state. Decree 581-02 establishes that debt contracted by the government will be incorporated into the National Budget Law of next year and payment. Listin Diario reports that the government seeks to cut spending RD$1.2 billion to RD$1.5 billion before the end of the year. The director of the National Budget Office, Luis Ernesto Perez said that the government seeks an overall decline in spending of 10%.
The government has announced similar cuts in the past, but spending has instead continued to spiral upwards. In the first half of the year, government spending was up 24%, when revenues fell short by 18%.

Vice President recipe for budget control
Vice President Milagros Ortiz Bosch told El Nacional newspaper that the government has instructed its departments to eliminate superfluous spending. The Vice President said that her recipe for budget control includes: zero receptions, no sending of flowers, no more TV propaganda, holding tenders for purchases, that all costs be specified in written contracts, that department transactions for purchasing and spending be viewable on the Internet, reductions in the construction costs among other cuts. 
She said the new austerity measures would not affect the school breakfasts programs. She said there is a plan to increase this to more than 1.5 million children per day.

Business community rejects new taxes
The Dominican business sector rejects keeping the 1.5% tax on gross sales beyond the December 2003 expiration date. The government has sent a bill to Congress that would fix this tax. Elena Viyella, president of the Dominican Republic Association of Industries has been vocal in her rejection of the tax. Viyella said that the 1.5% tax was a transition duty created to give time so the state could improve its tax collections system. 
The problem is not a lack of government collections, instead there is a problem in the excesses in government spending and borrowing, Viyella explains. 
“We are concerned with the quantity and the quality of government spending,” she is quoted in Hoy newspaper. She said that many of the loans are onerous, but that does not mean they will not have to be paid. 
“Let us look to the Argentinean experience and let us not make the same errors,” she said pointing out that the recipe for disaster in Argentina was increasing taxes and government borrowing. 
Carlos Ros, president of the American Chamber of Commerce, and Ligia Bonetti, president of the National Association of Young Entrepreneurs (ANJE) yesterday also spoke up against the new tax laws the government wants Congress to pass before its end of term on 15 August. The consensus is that the proposed changes in the tax law are detrimental to the competitiveness of manufacturing in the Dominican Republic. No other country applies the 1.5% tax on gross sales, nor disallows deducting the ITBIS value added tax from production costs.

Foreign investment up 6%
A report prepared by the Office for the Promotion of Foreign Investment says that foreign investment in the Dominican Republic was up 6% in the first quarter. As reported in Hoy newspaper, the Dominican Republic is third in Latin America in attracting foreign investment. The OPI-DR is based on data from the Central Bank and the Economic Commission for Latin America (ECLAC). The report also indicates that foreign investment grew 26% last year. Foreign investment increased US$1.19 billion. Breakdown by country is: United States US$748.6 million, Spain US$216.9 million, France US$80, Canada US$13.5 million, Italy US$4.2 million, Switzerland US$4.1, Holand US$1.2 million, England US$0.4 million, among others. See http://www.dr-opin.com/

Railroad chimera approved
The Chamber of Deputies approved the US$300 million concession for the construction of a railroad between Haina-Villa Altagracia-La Vega-Santiago. The Mejia government accepted the proposal made by Consorcio para el Desarrollo Ferroviario Nacional, despite the fact that this Dominican-Puerto Rican company is not known to have ever built another railroad. The Senate had already passed the project also with little discussion.
Yesterday, Deputy Pelegrin Castillo publicly opposed the project on grounds that the contract contains clauses that will work against the country. He said the head of the company, Jose Ventura Asilis - a Dominican contractor based in Puerto Rico - has legal problems in Puerto Rico for construction vices in a mall. He also mentioned Ventura as a key witness in a controversial legal process regarding a close aide of former governor Pedro Rosello. 
Castillo reaffirmed that Ventura has ties with US Ambassador Hans Hertell - an active Puerto Rican contractor - prior to his appointment in the Dominican Republic. Deputies that back the project denied being under pressure by Hertell. 
Castillo warned the railroad would bring problems. “It is not true that the private investors are undertaking the risk of this project,” he said. He said there are clauses in the contract that hold the state responsible for ensuring the finances of the project and the profitability of the venture for the investors. 
The project is being undertaken without a feasibility study. All studies in the past indicate that a train is not a profitable venture. 
El Caribe newspaper has reported on the lack of transparency and the apparent difficulties the project can bring. The newspaper says that the 50-year concession obliges the government to grant circulation rights. 
Engineer Pedro Delgado Malagon, who coordinates the governmental commission that is underwriting the bill that would regulate future concessions, has described the project as a chimera and an impossible dream.

New director CAB
President Hipolito Mejia appointed Carlos Alvarez Guzman the new executive director of the Civil Aviation Board. Alvarez replaces Air Force Major General Damian Castro Cruz who had been appointed last Friday evening in an urgent move to stop an air controller strike that paralyzed traffic to Dominican airports for two hours. 
Alvarez Guzman at the time was the director of the Airport Department. 
Upon being appointed, Alvarez visited directors of the air controllers union at the Air Control Center of the Las Americas International Airport. The air controllers went on strike last week in a desperate move to call attention to their request for better working conditions, including better wages and equipment.

Lila back in the game
President of the Chamber of Deputies, Rafaela (Lila) Alburquerque reportedly may keep her post. Deputies will vote on 16 August. Alburquerque spoke in figurative terms when she said that President Hipolito Mejia had lent her the same goat that he had tied up at the home of the late President Joaquin Balaguer. In politiquese, this means that her interests are being taken care of by people of high influence in the government. Alburquerque, a long time protégée of Balaguer, has presided over the Chamber of Deputies for the past three years. Her main contender is Alfredo Pacheco of the ruling PRD party.

Restricting access to official sources
Rafael Molina Morilllo, president of the Freedom of the Press Commission of the Inter American Press Association said yesterday that free access to government sources does not exist in the DR. He said that there is no ruling that grants journalists - or Dominican citizens - the right to demand these public documents, nor is there any penalty for government officers that deny access to these. Molina spoke during an international seminar on the legal framework that guarantees access to government sources. 
Molina believes that citizens, like journalists, should have free access to public information. He lamented that all bills sent to Congress to make effective this access have not passed. 

Newspaper success story
Last month El Caribe newspaper denounced that influential cattle ranchers had taken over state property adjacent to the Saladillo Lagoon in Monte Cristi. The cattle were polluting the important source of water. As a result of the alert, the Ministry of Environment threatened to evict them if they did not leave voluntarily. Today, El Caribe reports that the cattle ranchers decided to relocate their 8,000 cattle from the illegally fenced in area, a scientific reserve that is part of the Monte Cristi National Park.

Chain-reaction accident
Five cars and a pickup crashed into each other at the 27 de Febrero underpass causing major traffic jams and delays yesterday. There were no injuries despite one car literally going under another. The traffic jam affected West-East traffic from Privada to Maximo Gomez avenues.

Registering voters in New York
The Dominican American Voter Registration and Participation Program is seeking to register 5,000 northern Manhattan (Washington Heights/Inwood area) eligible residents by August 16th. Approximately two hundred people are being registered every day. The goal is to have registered more than 20,000 persons for the 2002 November election. The Dominican American National Roundtable, the Alianza Dominicana, Community Association of Progressive Dominicans (ACDP), the Northern Manhattan Coalition for Economic Development, Children’s Arts & Science Workshops all have been actively promoting to the Dominicans residing in New York City the importance of registering to vote. The program has offices at the Port Authority Business Outreach Office at George Washington Bridge Bus Station, 4211 Broadway Avenue, New York. For more information contact Sagrario Rosario at (201) 346-6048 or Jose Bello at (202) 390-8734, email [email protected]

Francisco Casanova on stage
El Caribe reports that tenor Francisco Casanova, who has been a substitute for Luciano Pavarotti in New York City, will present a 14 August recital with the National Symphony Orchestra. He told the newspaper that the concert has special meaning for him because many of the musicians that will be performing were his professors or fellow students at the National Music Conservatory. 
Casanova has prepared a selection of all time favorites that includes No Tardes Mas by Maestro Rafael Solano. 
Casanova’s future agenda includes performances in the operas Attila at Carnegie Hall on 23 April 2003 and Trovatore and Nabucco at the Metropolitan Opera also in New York City. 
For background information, see http://www.operacamerata.org/
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