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Daily News - 24 October 2002

Calderon announces 2003 Budget of RD$85-billion
Technical Secretary of the Presidency Rafael Calderon said that next year’s budget would range between RD$75- to RD$85-billion. He said he expects the deputies to be back to work in time to approve the budget for next year. If Congress is not in session, the law provides for the use of the previous year’s budget. 
Pelegrin Castillo said during a CDN Radio interview that a budget of that size is a clear indication that the money will be used to purchase political patronage. He said that in these days of austerity, there is little rationale for such a high level of government spending.

Economy to grow 4.7% in 2002 
Central Bank governor Frank Guerrero Prats said that during the period of January-September the economy grew 4.7%. Furthermore, Guerrero Prats said that year-end inflation will be more than 8% due to the increases in the cost of fuel and electricity. The peso has declined considerably this year and is now selling at more than RD$20 to US$1, which is contributing to the increase in inflation. Last year inflation was approximately 4%.

Mounted police for the Colonial city
The Ministry of Tourism announced that an initial squadron of 14 horse-mounted police would patrol the Colonial City of Santo Domingo. The new police force will operate under the jurisdiction of the Tourism Police. General Rinel Lozada Montas, director of the Tourism Police, said that the mounted police force will become another attraction of the colonial city and will patrol the city from 8 am to 6 pm. 
He explained there are plans to extend the service to tourism destination sites throughout the entire country, with Jarabacoa and the Constanza mountain areas next. 
He said that the idea is not new – a mounted police force existed in the 60s with its base located where the Honduras government neighborhood was built on Avenida Independencia.

The authorized limit to power bill increases
Julio Cross, Superintendent of Power, says that the electricity distributors were authorized to levy 107% increases only on those consuming 0-50 kilowatts. Those consuming more than this amount should not receive increases beyond that percentage. The companies were authorized to levy 20% increases on the larger consumers. Cross was interviewed after a meeting at the Senate. He said that any increase beyond those levels is a consequence of an error, such as that detected in the billing of AES Edeste, or the result of an increase in the consumption of the customer. He said this company erroneously billed 36 days of consumption for August, which was adjusted by the company after Cross brought the irregularities to light.

Aristy not interested in Senate seat
The Diario Libre reports that Amable Aristy Castro says he will not be sworn in as senator for La Altagracia province, regardless of whether he is re-elected to the Dominican Municipal League during the January elections or not. He says he seeks to be re-elected to the influential position of general secretary of the Dominican Municipal League, the institution that manages the purse strings of the city governments nationwide. He said he has nothing to gain by participating in the Senate where he said his party only has two seats. The party also won the seat for San Pedro de Macoris. But so far, Aristy has not resigned from the post, which would spell the first step for the party to appoint a replacement.

Retaining deputies per diem
The Executive Branch retained RD$3,750,000 in per diem and expense money that deputies receive for attending the sessions. Since the legislative period opened on 16 August, so far the deputies have only had two workdays. The deputies receive RD$1,500 per work session, or a maximum of RD$18,000 per month, to cover personal expenditures, such as food. This is in addition to the RD$60,000 monthly wage they receive, plus many other perks, as reported in Hoy newspaper.

Recovering US$1.4-million in stolen vehicles
The National Insurance Crime Bureau of the United States reported that a six-month search conducted in the Dominican Republic in collaboration with other US agencies and the Dominican authorities turned up 28 US vehicles in perfect condition worth an estimated US$1.4-million. Most of the vehicles had been stolen from New York or Florida and have already been shipped back to the United States. Among these is a US$20,000 Toyota Camry that had been reported stolen or destroyed during the 9/11 World Trade Center terrorist attack. The vehicle was found for sale at a local car dealership. Also recovered was a 1999 Mack heavy-duty truck, for which insurers had paid US$800,000. 
As part of the ongoing investigation, the NICB and the FBI determined that during a three-year period approximately 1,500 vehicles were illegally exported to the DR for resale on the black market. 
Overall, NICB estimates that 30% of vehicles stolen in the US are not recovered and 200,000 vehicles are illegally exported each year. 
El Caribe newspaper reports that in the first half of this year, local authorities had recovered 786 vehicles, compared to 550 last year. El Caribe mentions that one of the biggest obstacles in the recovery of the vehicles is the transshipment of these to Haiti.

Advocating productiveness and competitiveness
Elena Villeya, president of the Association of Industries of the Dominican Republic, told Hoy newspaper that the Dominican Republic business sector will become more competitive when taxes and interest rates are reduced. She says that the government and business sectors need to meet to agree on long-term policies that stimulate the development of the productive sectors that will generate much needed jobs. She says the country needs to take decisions on its developmental strategy in relation to areas in which the country can be most competitive. She said that the Association of Industries of the Dominican Republic has opened a National Competitiveness Center that will be operational before the end of the year. “There are laws that favor an improvement in production and there is the commitment of President Hipolito Mejia and the director of the Dominican Center for the Promotion of Exports (Cedopex)…but we have to go from words to action,” she said. She continued to say that it is important to begin implementing the decision of not taxing exports. 
She also told the newspaper that tax reforms to be implemented by the government cannot have negative effects on the productiveness and competitiveness of Dominican business. She highlighted that when drawing up trade policy it is fundamental that the government be coherent. She said it makes little sense to sign free trade agreements when conditions at home impede the local industry from competing on a level ground with other countries and that coherence has to do with the maintenance of macroeconomic stability. However, this cannot be accomplished by allowing interest rates to soar to the prohibitive levels seen in the Dominican Republic. “How are we going to compete with countries that have zero interest rates when we are paying 30%?” she asked. 
She stated that it is essential that the state control its own spending.

Turn the DR into a single free zone park
Speaking during the American Chamber of Commerce October luncheon, Roberto Bonetti, vice president of Mercasid, a leading industrial conglomerate, advocated the elimination of internal distortions, which translate into increased costs for doing business, so that Dominican companies may compete in the globalized world. He maintains that all Dominican companies benefit from the same business schemes enjoyed in the free zone industries today and that have enabled these to successfully compete abroad. 
He proposed that the government eliminate the 1.5% tax on gross sales, the 4.75% exchange surcharge, and the 3% tariffs on raw materials. In their place he suggests a value-added ITBIS tax on all goods and services. This way, according to Mr. Bonetti, there would be no favoritism for any sector and all would have to play with the same deck of cards. He explained that this would bring greater transparency at a time when the informal sector is growing in reaction to the high taxes that penalize the formal business sector. 
Bonetti spoke further, saying that once the free trade agreements are signed with Canada and the United States by the year 2005, either “we compete or we will be closed down”. He believes that his proposals are the least the country can do to prepare itself to compete with global imports and cited countries in Central America and the Caribbean as examples, where production is not penalized with the aforementioned taxes. He said that the Dominican tariff structure has to be equal to that of the countries with which it competes and in not doing so Dominican produce is automatically less attractive to the world market.
“Local business has had to defend itself more from the local conditions than from international competition,” he said, also mentioning that the obstacles to exporting come from home, not from abroad, and that the free zone industries that are exempt from these obstacles have been able to compete successfully. 
He praised the government’s announcement of plans to soon eliminate the 1.5% tax applied to Dominican exporting companies. This promise, though, has yet to be implemented.

DR remains strong British travel destination
According to the British newspaper The Guardian, the Dominican Republic was the only of the top British holiday destinations to see an increase in numbers following the 11 September terrorist attack. The newspaper cites figures published by First Choice and released at the Association of British Travel Agents’ annual convention that took place in Cairo, Egypt. 
The DR received more than 115,000 British tourists - an increase of 16%. Other countries which have defied the general downward trend include France, Croatia and Egypt. Spain remained the most popular British package holiday destination, although travel there was down 7% the previous summer.
Travel to the US was down by a third in a year when tourist bookings to destinations around the world were down by an estimated 10%, reports the newspaper. The 11 September factor and the generalized economic uncertainty have been blamed for the poor season. 
The Association of British Travel Agents is forecasting a rebound for next year as bookings for next summer are said to be above the level they were for the summer of 2001. 
See http://travel.guardian.co.uk/news/story/0,7445,816806,00.html

Continental confirms start of Newark-Santiago flight
Continental Airlines has confirmed it will begin its flights from Santiago to Newark Liberty International Airport in New Jersey on 1 November. Frank Galan, director of the Caribbean division of the airline, visited to make the formal announcement in Santiago. Continental has been flying to Santo Domingo for ten years and two years ago added the Puerto Plata-Newark flight. This would be the third city in the Dominican Republic for Continental destinations. 
The flights will depart Santiago at 8:42 am and arrive in Newark at 11:15 am.

Baseball Weekly honors Miguel Tejada
Baseball Weekly ranked Miguel Tejada (Athletics) the most valuable American League player, followed by fellow Dominicans Alex Rodriguez (Rangers) and Alfonso Soriano (Yankees). Dominicans Albert Pujols (Cardinals) and Vladimir Guerrero (Expos) were the runner-ups behind Barry Bonds as most valuable player for the National League. See http://www.usatoday.com/sports/bbw/2002-10-23/rankings.htm
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