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Daily News - 8 August 2002

Power subsidies reinstated
Listin Diario reports that the Minister of Finance Jose Lois Malkum has stated that the government has again agreed to subsidize power distributors with RD$40-RD$50 million a month. In return, a commitment to provide 20 hours of power to low income barrios was agreed upon. 
The elimination of the power subsidies was one of the main justifications for energy privatization back in 1998. Supposedly, the private sector would be more efficient than the state at collecting for the service from its consumers. The subsidy reinstatement comes after power companies failed to meet the goals set when they were awarded the contracts. 
Malkum, who is the head of the government commission that is negotiating for better conditions for Dominican consumers, said that the subsidy would be in place temporarily to encourage barrio residents to pay for the service. The recent Power Ruling, passed in July, establishes that the power distributors need to install power meters in all homes within the next two years.
The long hours of power outages discouraged barrio residents from paying for the service. Previously, the power companies were barely delivering four to six hours of power a day. Malkum said that the power distributors agreed that the Plan de Reduccion de Apagones (PRA) would be extended to all low-income barrios. The PRA is a first step in getting barrio residents to pay for the service. Fixed fees of about RD$150 per household are being charged for the service. 
At present, approximately only 30 barrios have been affiliated. Malkum explained that Union Fenosa companies distribute power to 108 low-income barrios that consume 54 million kilowatts, and AES has 130 barrios that consume 26 million kilowatts. 

Bautista and Alburquerque up for re-election
The PRD and PRSC political parties decided that both presidents of the Senate and Chamber of Deputies should continue in their posts. The new senators and deputies that will be sworn in on 16 August for the 2002-2006 term still need to ratify the decision. If ratified, both Andres Bautista of the PRD and Rafaela (Lila) Alburquerque (PRSC) would continue in their posts. This would be Alburquerque’s fourth term at the helm of the Chamber of Deputies. It would be Bautista’s second. Both Alburquerque and Bautista have been very supportive of proposals sent by the Executive Branch to Congress.

Important bills forgotten in Congress
El Caribe newspaper points out that legislators seem to have forgotten about important bills pending their approval. Their primary focus has been on the loans the President has sent for their approval before 15 August.
Congressional procedures establish that bills expire if they are not passed within two legislative periods. El Caribe points out some of the important projects that would expire as a result of the negligence of Congress. These include: 
Government prosecutors by-laws (Ministerio Publico)
Police reform legislation
Customs reform bill
Environmental bill with rulings and bans on the extraction of construction material from rivers 
Monetary and Financial Code
Penal Code reform bill
Consumer Protection bill
Electronic crimes bill
Armed Forces reform bill
A bill that would oblige the government to hold tenders for public works constructions
A bill that would require anti-doping tests for aspirants to government jobs

20 tollbooths
El Caribe newspaper reports that in the near future vehicles will have to pay tolls at 20 highway points, compared to the four that exist now. 
In an editorial, the newspaper comments that the government sent loans to Congress for US$71 million to build the 10 new tollbooths stations. Highway concessionaires would install another six. 
Interestingly, the concessionaires can’t lose given the way contracts have been written up. The contracts establish that tolls can be increased at any time so as to guarantee the profitability of the highway builders. If consumers balk at the high tolls and travel less, the government would pick up the extra tab to pay the contractors. 
The newspaper explains the location of the tollbooth stations to be as follows:
Existing tollbooths:
Duarte highway
6 de Noviembre highway
Las Americas Airport 
Planned tollbooths:
Entrance to San Pedro de Macoris
Entrance to La Romana
Exit from Azua
Duarte Highway-San Francisco de Macoris crossing
Entrance to San Francisco de Macoris
Access to Moca-entrance to Santiago
Exit from Santiago-Villa Gonzalez
Crossing Navarrette-Puerto Plata
Crossing entrance to Esperanza
Exit Puerto Plata-access airport
Private concessions:
San Cristobal-Bani highway
Villa Mella
Santiago-Samana highway
Autovia del Este highway
San Pedro-La Romana highway

Exporters most affected new taxes
Horacio Alvarez, executive vice president of the Dominican Association of Exporters said that Dominican exports would suffer the most if the new taxation measures proposed by the government pass in Congress. He said that while local companies can pass the taxes on in increased prices to consumers, export prices do not have the same elasticity. He said that buyers abroad would just switch suppliers. 
He criticized the taxation revision that would not allow companies to deduct the ITBIS value-added tax on capital goods, transport services, insurance payments, among other inputs. President Hipolito Mejia said yesterday the bill would be revised so as not to tax manufacturing machinery.
Alvarez also criticized the government’s plan to extend the 1.5% tax on gross sales beyond its expiration date of December 2003. 
He said the exporters already are affected by the 4.75% exchange tax plus the 1.5% on gross sales, in addition to having a higher power cost than competitors in Central America, for example. He commented that free zone manufacturers have been successful because their business regime exempts them from paying these taxes. 

Food smuggling via Haitian border
El Caribe reports on a European company’s findings on the Haitian/Dominican border trade. The research company, Aide a Decision Economique, contracted by the European Union says that the level of food smuggling on the Dominican-Haitian border has reached US$8 million a year. That’s about a third of the total trade, estimated at US$21 million. 
The bulk of the food contraband is rice and beans. An estimated 12,000 tons of rice and 8,000 tons of beans, (imported into Haiti from Miami, Florida) are illegally exported into the Dominican Republic by way of the border. The smugglers do not pay legitimate customs taxes. Instead, bribes and other fees are paid at different points as the shipment makes its way to Dominican markets. The smugglers also have contacts to bypass quotas and import bans in place to protect local farm production by the Ministry of Agriculture. 
The protectionist measures work against consumer pockets, as free import of rice would mean lower prices for the food staple. Meanwhile, the smugglers reap high profits. The European study questions the efficiency of maintaining the government food protectionist measures.
In addition to the re-export of the rice and beans from Miami, Haiti primarily exports coffee, fruits (mangos, avocados, tamarinds, cashew, grenadines), guandules, livestock, corn, tobacco and squash to the Dominican Republic. 
The Dominican Republic exports eggs, live chickens, fuel, rice bi-products, organic banana export rejects, vegetables and tayotas to Haiti.

New Cuban ambassador
Omar Cordoba Rivas, formerly the chief of the Dominican Republic section in the government of Cuba, is now the Cuban ambassador to the Dominican Republic. El Caribe points out that he worked in the Cuban intelligence services prior to his appointment. He has been a frequent visitor to the Dominican Republic throughout the past 20 years. He is an officer of the foreign relations commission of the Central Committee of the Communist Party in Cuba. He replaces Miguel Perez Cruz who returned to Cuba in May. 
He was presented with his diplomatic credentials yesterday. During the same ceremony, President Hipolito Mejia presented credentials to new ambassadors Adam Blackwell (Canada), Isabel Tellez (Mexico) and Andrew Richard Ashcroft (United Kingdom). 

Migration issues need to be a priority
Jose Bello, director of the Dominican-American Roundtable lobby group, is encouraging President Hipolito Mejia to bring up migration issues in talks with the US government officers. In an interview with El Caribe newspaper today, he lamented that President Hipolito Mejia did not bring up issues such as family unification when visiting Washington, D. C. last month. He said that Central American statesmen frequently visit Washington to lobby US congressmen and discuss these issues. He explained that US Congressmen that have large Hispanic constituencies, and especially those that represent areas where Dominicans live should be supportive of such issues. 
He explained that there are two reasons why US congressmen would be sympathetic to Dominican causes. Basically, if the economy of the Dominican Republic worsens, there will be more immigration to the US. This will increase the burden on that country’s social services. But more importantly is that there are already potentially 765,000 voters of Dominican origin living in the United States. 
The Dominican American Round Table is a forum for analysis, planning, and action to advance the educational, economic, legal, social, cultural, and political interests of Dominican Americans in the United States. The Round Table is actively getting more Dominicans to register to vote and become more active in US politics. 

Remodeling of Quisqueya Ball Park
Baseball Commissioner Jose Daniel Calzada said remodeling is now underway at Quisqueya Stadium, located in Santo Domingo. Quisqueya is the premier baseball facility in the country. US$8 million is slated for the upgrade with an eye towards hosting Major League Baseball games in 2004. Calzada said that the remodeling would not affect the upcoming baseball season, which begins in October. 
The Ministry of Public Works will supervise the remodeling being done by a company named Pinsa. He said three US companies seek the contract for the remodeling design. 
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