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New ceiling for government borrowing The Monetary Board of the Central Bank announced a ceiling on government borrowing. The new ceiling would limit government borrowing in pesos and dollars to the level registered on 23 August. This ceiling would be enforced until 31 December 2002. The Monetary Board also ruled that the government would need to reduce the debt of the government with the Central Bank and commercial banks by RD$400 million up to 31 December. |
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No exporting taxes, please In a speech marking the end of her term as president of the Association of Industries of the Dominican Republic, Elena Viyella reviewed the critical areas that affect the competitiveness of Dominican businesses. She urged the government to adopt more conservative fiscal and borrowing policies. She pointed out that an increase in government jobs by 100,000 coincided with a US$250 million increase in the current account of the balance of payments. She proposed a pact between the government, workers and employers to create conditions favorable to increased investments and productivity. She was polite but direct in her address. She criticized the government’s July proposal to disallow businesses to deduct the value-added tax (ITBIS) on services. “We cannot export taxes,” she said. She spoke of the power sector problems and requested that the government put a stop to power distributors manipulations in the market. She also urged the government to enforce the Power Law and the recently approved Power Ruling noting that the power companies adherence being essential to business competitiveness in the Dominican Republic. “It is inconceivable and unacceptable that power distributors be allowed to manipulate demand with financial power outages to obtain greater profits in detriment to consumers,” she said. She goes on to say that power distributors knew what they were getting into when they won the contracts, so they cannot allege incapacity to collect. She explained the state accepted a lower worth of the state utility assets to compensate for the known reluctance to pay by many power market segments. “They committed to increase collections and they need to do so,” said Viyella. She said they have to make the promised investment in distribution infrastructure instead of pressuring the state to expand their vertical integration (the installation of power generators by affiliate companies). Viyella also focused on the financial crisis that high interest rates and short financing terms cause to businesses that thus are hindered from making the investments needed to compete in a global market. She also said that it is time that all pay taxes, and not just a small group. President Mejia had words of praise for the speech of the new president of AIRD. “Elenita is a very intelligent woman. I expect a lot from her and the country. Her proposals are very good.” He said he fully supports her and the proposal for zero taxes on exports and for a nationwide pact to guarantee the competitiveness of local business. |
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Government spending pulls peso down Ligia Bonetti , president of the National Association of Young Entrepreneurs (ANJE) urged that the government cut spending as a way to reduce the pace of depreciation of the Dominican peso to the US dollar. Celso Marranzini, former president of the National Council of Business (CONEP) said that there is a direct proportion between government spending, the devaluation of the Dominican peso and the increase in lending interest rates. He said that the Central Bank has done their part with monetary policy, but the government needs to control spending for the exchange rate to stabilize. “The fundamental problem is in the spending, the government has to stop spending, there is a direct correlation in the increase in the interest rates,” said Marranzini. The Central Bank recently injected the market with US$50 million, which was gobbled up in a week. And the exchange rate has increased to a record high. Both business spokespeople were interviewed by Hoy during the event held to mark the start of the presidency of Elena Viyella at the Association of Industries of the Dominican Republic. |
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Editorial for upholding the power ruling El Caribe newspaper today editorializes in favor of the government upholding the Power Ruling that will go into effect next week. News reports say that the power distributors are pressuring the government to be flexible in its application. Superintendent of Power Julio Cross is standing by the new norms that oblige the power distributors to meet their contractual commitments and empowers consumers to demand the service they are paying for. El Caribe newspaper repeats words of Elena Viyella, new president of the Association of Industries yesterday during the speech that marked the start of her term: “The distributors came to the country with their eyes fully open. Nothing was hidden from them. Now they cannot demand changes to improve the return of their investment beyond their own estimates three or four years ago,” she said. The newspaper makes it’s own (not sure what’s going on here??), Viyella’s plea, “Let us pay, but let us demand the service. Enough of this business of creating crisis on top of crisis to pressure the government,” she said. The newspaper says that the power distributors are affiliates of large foreign companies that sell their shares in the US and European stock markets. “Their shareholders and the general public should know about what they are doing in Santo Domingo, for good or bad,” says the newspaper. It says that in these times of questioning the ethics of big business, the multinationals in the Dominican Republic should not tamper their financial statements to hide their real situation. Hoy newspaper’s editorial today concurs with opinions expressed in El Caribe. Hoy urges the government to tackle the power problem once and for all. The newspaper says that the power distributors committed to invest to become reliable suppliers and to implement mechanisms to increase number of paying clients and have failed in their commitments. In addition to the consumers not paying for the service, the government is also at fault for its frequent failure in meeting its payments with the power distributors and thus is vulnerable to succumbing to the pressures of the distributors. Caught in the middle are the consumers that do pay for the service but are penalized with financial blackouts, and get billed for hours of service not received, becoming victims of nationwide fraud. The newspaper urges the government to pay on time to be in a position to demand respect from the power consumers, and top uphold the provisions in the Power Ruling that require the power distributors to respect contracts that are signed on a one-to-one base, and enable consumers to discount from their bills the hours of power not served. |
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Mejia optimistic about power solution President Hipolito Mejia promised yesterday that the solution to the power problems is on the way. Marco Mantovanelli, director of the World Bank, said that a mission from the bank would arrive to study a request for US$200 million to settle outstanding debt with the power distributors. Yesterday, the government announced it would make a payment of US$35 million to the Compañia Electrica de Puerto Plata (CEPP) and RD$120 million to Cogentrix in San Pedro Macoris, a first payment on a US$22 million debt. Cogentrix supplies 300 megawatts and CEPP supplies 62 megawatts. These are the most recent in government negotiations with power companies. Likewise, Cesar Sanchez said they are moving ahead on reaching a payment agreement with Union Fenosa affiliates, Edenorte and Edesur. These companies have refused to pay their debts to Itabo and Haina power generators until the government pays them. |
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Solar power for computer labs Minister of Education, Vice President Milagros Ortiz Bosch and Minister of Industry and Commerce Sonia Guzman de Hernandez signed an agreement for the second phase of a program to supply solar-powered generators for computer labs in public schools in the southwest and border towns. This would bring the total of computer labs running on solar power to 65. A first phase of the program cost RD$8.5 million and benefited 26,715 students. The second phase calls for installing 36 solar-powered generators at a cost of RD$10.6 million and will benefit 30,000 students. |
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One dead and 14 injured in Capotillo Capotillo, the no-man-land Santo Domingo slum erupted yesterday in protest against long power outages. One man died and 14 were injured in the protests. 41-year old Alberto Santos Veloz was mortally injured by a stray bullet. |
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Defending his innocence With a PRD cap, a bible under his arm and a Viva Hipolito Mejia, 51-year old Jose Antonio Cartagena Rodriguez turned himself into the Attorney General. The Police were on his trail after finding evidence that his cousin, Rafael Villa Cartagena, spent the evening of 16 August at his home in Nagua, as reported in the Listin Diario. Villa Cartagena is a leading suspect as the mastermind behind the kidnapping of Santiago businessman Juan Fernando Capellan. Capellan confirmed he was held captive at Villa Cartagena property in Bani. Capellan was released after a million dollar ransom was paid. Cartagena defended his innocence. He was sent to the Department of Criminal Investigations at the Police headquarter in Santo Domingo. In Nagua he worked as supervisor of the Ministry of Public Health. Cartagena urged his cousin to hand himself in. Meanwhile, the Listin Diario reports that investigations show similarities in the kidnapping of Capellan and San Francisco de Macoris businessman, Juan Manuel Ulerio. |
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Foreigners come for plastic surgery More than 40% of the plastic surgery operations carried out in the Dominican Republic are done on foreigners. Dr. Igor Bassa Kury, president of the Dominican Society of Plastic Surgery, nevertheless alerted foreigners to stay away from unauthorized practitioners that offer their services in beauty salons and luxury hotels. He said the most requested cosmetic surgery operation is fat removal through liposuction. Next is eyelid surgery (blepharoplasty), a procedure used to correct loose skin, pouching, and sagging around the eyes as well as for removing fatty deposits which cause puffy bags below the eyes. |
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Protest of dolphin capture Ecology groups from Bayahibe and Santo Domingo protest the unauthorized capture of dolphins by Manatee Park in Punta Cana. Marine biologist Ideliza Bonelly de Calventi said the capture of dolphins violates Environment Law 64-00, that has the dolphin in the category of protected species. And Bayahibe ecology groups say that the capturing of the dolphins has scared away the friendly dolphins that frequently would spontaneously present natural shows for tourists on their way to Catalina and Saona islands. Domingo Abreu Collado, ecology editor for Hoy newspaper, and advisor to the Ministry of Environment says his department never issued such a permit. Listin Diario denounced a Cuban, Antonio González was contracted to capture the dolphins. Reportedly, he is being assisted by Environmental Police sargeant Rogelio Marte Valdez who receives orders from Environmental Police General Ivan Peña Castillo. For more on the controversy of keeping dolphins in captivity, see http://library.thinkquest.org/ |
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New era for Sosua? Government and private sector announced yesterday they would invest RD$88 million to improve the 1.2 kilometer Sosua Beach. Vendors located within the 60-meter fringe of the beach would be relocated to a new mall that would be built. The relocation is expected to mark a new era for Sosua, one of the first beach areas to be developed in the Dominican Republic. There are an estimated 3,500 hotel rooms in Sosua, located between Puerto Plata City and Cabarete, on the North Coast of the Dominican Republic. A 6,474 square meter mall in typical Caribbean Victorian Age style will be built on a 13,000 square meter property. The groundbreaking date of the mall has yet to be announced. Reportedly, President Hipolito Mejia approved the project on a recent visit to Puerto Plata. The government committed to invest RD$40 million in the property, and the private sector would invest RD$23.4 million, and finally vendors would invest RD$24.6 million to purchase storefronts. The new mall will be operated by a seven-member board (Ministry of Tourism, city government of Sosua, land donators, Sosua Development Association, beach vendors, Sosua Association of Hotels). The plan also calls for the construction of a beach club at the Los Charamicos side entrance. |
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