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Daily News - 29 October 2002

New bond issue top story
The lead story in most of Tuesday’s newspapers, both on the front pages and in the financial sections, is the government’s proposal for a new issuance of bonds. The new issue of between US$500- and US$750-million is proposed to cover short-term foreign debts that are being recalled, as well as to pay credit owed to local banks. 
According to Hoy newspaper, Minister of Finance Jose Lois Malkum explained that the government would use the money in the following ways: $135-million to cover public sector debts with local commercial banks, $215-million allocated for next year’s foreign debt obligations, and $150-million deposited to the Central Bank as a “contingency” fund in case a war with Iraq affects the Dominican economy. News reports say the government seeks to place the bonds at a lower interest rate than the 9.5% rate of the previous bond issue.
The announcement of the new issuance has given rise to different opinions among businessmen and economists. 
In the Diario Libre, the National Business Union approves the move to pay foreign debt. “Paying debts without receiving new loans just bleeds the (Dominican) economy,” said Andrés Dauhajre, father of Andy Dauhajre, who is the lead negotiator for the bond placement on behalf of the government. 
Ligia Bonetti de Valiente, president of the National Association of Young Businessmen, supported the bond emission. She considers that long-range debt and participation in the capital markets would assist in reclassifying the present short-term debts and take pressures off the economy.
Guillermo Caram, former head of the Central Bank, claims that the new bonds will not be a positive step, as they do not provide any solutions to the country’s economic problems. 
Pedro Silverio, head economist of the Cenantillas (Economic Center for the Antilles) think tank, voiced the strongest opposition to the strategy. Silverio said that the new issue would only postpone the government’s financial problems, and that the real solution would be a serious readjustment of expenditures, which in December will be RD$4-billion over budget in salaries alone. The director of Cenantillas says the government still has to explain to the nation how the first US$500-million was consumed, saying, “the use given did not appear to comply with the rules that were laid out.”

Standard & Poor’s affirms DR ratings
Standard & Poor's Ratings Services last week affirmed its double-'B'-minus for long-term and single-'B' for short-term sovereign credit ratings on the Dominican Republic, while the outlook remains stable. The report is issued at a time when the Dominican government seeks to make a second placement of US$500- to US$750-million in sovereign bonds on the international capital markets in order to restructure its debt and increase its level of international reserves.
"The stable outlook balances the relatively stable macroeconomic environment and manageable debt to GDP ratio with the low external liquidity and relatively weak government institutions," said Sovereign Analyst Richard Francis. "Implementation of anticipated reform could strengthen the rating, although further slippage in external liquidity could lead to a deterioration in the Dominican Republic's credit standing," he added.
According to Francis, in order to maintain its creditworthiness the government needs to tighten fiscal policy in order to relieve pressure on the balance of payments and staunch the loss of international reserves.
"The country's ratings are constrained by a low level of international reserves, shallow local capital markets and high cost of capital, relatively weak institutions, and poor social indicators,' Francis said. "However, its solid growth prospects, low public-sector external debt, and the acceleration of anticipated reform underpin its current ratings.”

The President off to Canada
President Hipolito Mejia has announced a trip to Canada for this coming Tuesday, 5 November. He is scheduled to hold two work sessions with Prime Minister Jean Chrétien and will hold a breakfast meeting with Canadian investors and businessmen at the Fairmont Château Laurier hotel in Ottawa. Eduardo Fernandez, the Dominican Ambassador, will host a gala dinner at Rue de Mougins, Gatineau, Quebec, for the President and Prime Minister. President Mejia will also attend a special session of Parliament where he will participate in a question and answer session, before returning to the Dominican Republic on Thursday at 9 pm. On the agenda are talks regarding bilateral trade matters and other matters regarding Canadian investment and business in the Dominican Republic. Canada and the Dominican Republic are discussing a free trade agreement that could be signed by the summer of next year. President Mejia will return the evening of Thursday, 7 November.

Unhappy deputies
According to today’s El Caribe, the deputies of the lower house are most unhappy about the deductions the government has imposed on their incomes for not attending congressional sessions. The deputies have abstained from the sessions over the current crisis with the Central Electoral Board (JCE), the government body in charge of organizing the upcoming presidential election in 2004. Per diems and other “normal” emoluments that totaled RD$26,000 per month [per deputy] have been retained. The delegates had expected a deduction of only RD$1,500 per session not attended, but according to officials of the National Treasury, a total of RD$4.5-million has been saved.
The President of the Chamber of Deputies says she will convene them to return to work in mid-November regardless of whether the Central Electoral Board crisis is resolved or not. The PLD and PRSC deputies have disputed what they say was the biased selection of the JCE judges by the ruling party’s majority Senate. 

Patrolling the highways
After a long hiatus, the National Police will return to patrol the major highways of the country -- Duarte, Sanchez, 30 de Mayo, 6 de Noviembre, Autovia del Este and Las Americas. Twenty new cars were placed in service yesterday, each manned by a driver, a male official and a female officer. According to the Chief of Police, Jaime Marte Martinez, this renewed 24-hour patrol effort was taken due to public demand for better vigilance on the highways. The patrol police have been specially trained in emergency care, as well as the use of the new radar equipment.

More workers for Spain
Personnel from the Ministry of Labor, the Spanish Embassy and other organizations have been evaluating 5,000 applications for workers’ permits and pre-selected 500. Of these, almost 300 are expected to qualify to work in Spain. According to Hoy newspaper, only 10% of the applicants were qualified to work in the jobs for which they had applied. The employment program is part of a bilateral agreement aimed at controlling and organizing the migration of Dominicans to Spain.

Hypertension high in the Southwest
The arrival of the new Social Security system and the concurrent research into the overall health of that region (Región IV de Salud Pública) has showed an alarming rate of hypertension in the area. Preliminary 2002 Census data now shows that hypertension is the prime cause of visits to the doctor and bed occupancy in the public hospitals of the region. The four provinces, Barahona, Bahoruco, Pedernales and Independencia, that make up Public Health Area IV, will be the first to enter the new Social Security System. Dr. Hector Sena Matos, the regional director of Public Health, estimated that 8-10% of the local population suffers from hypertension.

New increase in electricity bill
The electricity distributors have announced an increase of at least 6% for November’s billing. Despite having received massive amounts of complaints from consumers over the last billing, EDE Norte, EDE Sur and EDE Este have all announced this new increase. This means that the smaller consumers will be billed at RD$2.63 and the larger consumers will be billed at RD$3.25 per kilowatt-hour. The Superintendence of Power has not yet published the new tariffs, but they must be officially publicized by the deadline of next Thursday in order for the rates to be used in November’s billing.
The government is 50% shareholder in the power distributors and power generation companies.

A good thing?
According to Diario Libre and other papers, the sale of beer and rum has increased over the last two years. Rum sales are up this year by 13.6% over the year 2000’s levels, and beer, after suffering a decline of over 12% between 2000 and 2001, has increased its sales to 3.3 million cases sold in September. This represents a 6% increase over the month of September 2001.

A Day with Europe
The Federation of European Chambers of Commerce in the Dominican Republic announces A Day with Europe, an event scheduled for Thursday, 7 November at the Hotel Embajador (10:30 am to 7:30 pm). Marcus Brocker, president of the Federation of European Chambers of Commerce and the Holland Chamber of Commerce, explained that during a workshop, representatives of European investment banks and pension funds will speak on how Dominican companies can access these funds. A Day with Europe brings together the chambers of Commerce of Germany, Belgium, UK, Spain, France, Holland, Italy and Scandinavia-Baltics to explore joint business opportunities.

Spotlight on AA587 flight
Dominican-American leaders expressed their concern over the investigation of the American Airlines Flight 587 at the National Transportation Safety Board’s hearings taking place yesterday in Washington, D.C. 
"As we approach the one year anniversary of the tragic crash of American Airlines Flight 587, we ask that NTSB expedite the investigation to bring closure to the families of the victims," said Margarita Cepeda, president of the Dominican American National Roundtable (DANR), a Washington, D.C.-based organization that advocates the empowerment of Dominicans in the United States and Puerto Rico.
American Airlines Flight 587, which was an Airbus A300-600, crashed on Monday, November 12, 2001 into the residential area of Belle Harbor, New York. The crash occurred two minutes and 24 seconds after takeoff from John F. Kennedy International Airport. Flight 587 was on its way to Santo Domingo, Dominican Republic. 260 passengers (including 175 Dominican-Americans) aboard the flight (2 pilots, 7 flight attendants, 251 passengers) and 5 people on the ground were killed.
Although the National Transportation Safety Board has not yet determined the cause of the accident, they have never publicly considered acts of sabotage or a possible terrorist attack as issues to be addressed in the investigation. Many Dominican organizations have requested that all evidence and facts contributing to the decision ruling out these motives need to be disclosed.

Canadian Baseball League recruits Dominicans
The Canadian Baesball League is in the Dominican Republic conducting tryouts and evaluation camps. The Canadian Baseball League is a new international professional baseball league, independent of Major League baseball, that will begin play in cities across Canada in May of 2003. The Commissioner of the league is Ferguson Jenkins, the only Canadian elected to the Major League Baseball Hall of Fame. The CBL is a high-caliber league, one step below the Major Leagues, and similar to national leagues in Japan, Mexico and Korea. The CBL games will be televised every week in Canada with a national game of the week. The league will hold an annual mid-season All-Star Game and a Canadian national championship called the Jenkins Cup. CBL chairman Tony Rivera and CBL’s head of Latin Scouting, Andres Thomas (former Atlanta Braves shortstop), are currently in the DR to scout and sign baseball players for the inaugural season of the new league. For more information, contact Alex Klenman at [email protected]

Caribbean Series date
Juan Francisco Puello, Caribbean Baseball Commissioner, announced that the 2003 Caribbean Baseball Championship will take place this year at the Roberto Clemente Stadium in Puerto Rico. The event is scheduled for 2-8 February. Puello said that the activity is a profit-earning endeavour, as every day more US television stations are interested in broadcasting it.
 
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