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Daily News - 4 December 2002

Please renew your plates!!!
The Metropolitan Transit Authority (AMET) announced that as of today at 6 am they will begin to hold both the licenses and vehicles that have not renewed their stickers. As of November 30th, the month-long regulation renewal period expired and a RD$100 surcharge on license plate renewals is currently in effect. Many drivers complained that since they still owed money or were behind in their car payments, they could not obtain the required original copies of the vehicle registration papers needed to renew the plates.

An interesting declaration in Taiwan
Hoy newspaper writes that the Taiwanese government has decided that Taiwan will no longer grow sugar cane. In the future Taiwan will import crude sugar and molasses and refine it for local consumption. President Hipolito Mejia was made aware of the decision during his visit to a sugar producing plant, Taisugar. He was accompanied by Ramon Menendez of Central Romana, the largest local private sugar producer. President Mejia and Menendez viewed a video on the diversification of the company that has increased its revenues from US$18-million in the 50s to US$951-million today.

Major new bond issuance approved
Yesterday the Senate approved a new sovereign bond issuance for the amount of US$750-millions. The decree that will authorize the President of the Dominican Republic to place the bonds in the world capital markets was only slightly modified by the Senate Finance Committee to include an additional US$150-million dollars. The Senate says the money generated would be used to re-purchase the shares owned by private companies in the electrical distribution companies. Senators of Peravia, Vicente Castillo, and the National District, Jose Tomas Perez, expressed doubts the money would be used for that purpose. 
President Mejia avoided comment on this increase when asked by reporters as he arrived in New York from Taiwan. The motion was passed with 23 votes, all of which came from senators of the PRD. The only two senators to oppose the motion were Jose Hazim (PRSC-San Pedro de Macoris) and Jose Tomas Perez (PLD-National District). Hazim did not attend the session and Perez walked out minutes before the vote, after voicing his opposition. The Chamber of Deputies needs to vote in favor, also. Given the late date, it is unlikely there will be time for the placement to be made this year.

President Mejia in NYC
President Hipolito Mejia was scheduled to meet with businessmen from the Bronx in New York before heading back to the Dominican Republic. Mejia is in NYC following more than a week’s visit of Japan and Taiwan, the results of which, he told reporters, he was quite pleased with. He was enthusiastic about Taiwan’s offers to help the agricultural and rural sectors of the population and especially pleased with two projects that seem to be solidifying. One of the propositions includes a direct telephone line to be installed between the two countries, so that Mejia of the DR and Chen Shui-bian of Taiwan can converse directly and push forward needed projects. The second is a project that will convert the privatized State Sugar Council (CEA) land property in the Monte Plata province to a wood-producing forestry and will cost US$21.5-million. These lands had been ceded to the Dole Company for pineapple cultivation, but have since been abandoned. The area surrounding the project, Comadreja, will be the object of an intense program of rural development. The plans will be overseen by the Instituto de Desarrollo e Investigaciones Agropecuario y Forestal (IDIAF). 

Internet troubles
Last night the Dominican Republic lost all Internet service, which was not restored until early this morning. According to sources at CODETEL, the connection to the Internet was lost at 10:30pm while the company worked to re-establish it into the wee hours of the morning. This reporter was able to reconnect to the Internet today at 6:30am but by 8:30am the service had gone out again. As of noon today, the service seemed to have been restored.

Dollars, Euros and cents
There appears to be a difference between what the Central Bank is paying for Euros and what the marketplace deems an acceptable rate of exchange. According to sources in the Hoy Economy Section, the Central Bank is under-evaluating the Euro, which is nearly at a par with the US dollar. At one point during yesterday’s trading the Euro overtook the dollar before receding to .972 on the dollar. The Central Bank however is paying RD$16.74 for the Euro and RD$17.76 for the dollar.

More on the Horrors and Omissions Account
Two weeks ago the DR1 News ran a story concerning the account in the Central Bank’s ledger called “Errors and Omissions”. This is the account that is supposed to register monies coming into and out of the Central Bank’s hard currency accounts. Ideally, the Errors and Omissions account should show a zero balance, with all income equaling all outflow. The story in DR1 explained how the balance had reached incredible heights upwards of US$400-million dollars in unaccountable funds, also mentioning that local satirists had named the account “Horrors and Omissions”. It now appears, however, that the jokesters had only touched the tip of the iceberg. The figure for inexplicable funds has reached the incredible total of US$854.5-million dollars as of this past September. According to some sources, a figure such as this can be partially attributed by the withdrawals of increasingly large amounts by the electrical companies as they return capital to Spain.

Government borrowing already hurting
El Caribe reports on the increasing burden to state finances of the debt the Mejia administration has contracted with local banks in foreign currency. The amount owed by the government has almost doubled since December 2000, six months into the term of the Mejia government. By the end of November 2002, the government owed commercial banks RD$12.9-billion, according to the Central Bank. This figure represents an 89.7% increase in foreign currency debts owed since December 2000, however is less than the RD$14-billion owed in November 2001, which means the government has at least been making payments on its debt. 
While former President Balaguer did not borrow in dollars, his successor, Leonel Fernandez, began the trend in the late 90s. By the end of 1996, after Fernandez’ first six months in office, the debt stood at RD$4.9-billion. By the end of his government, in September 2000, the dollar debt with commercial banks had increased to RD$8.6-billion. 
Economist Alfonso Abreu Collado says that the government should only resort to borrowing in dollars from commercial banks in cases of extreme emergency, such as earthquake, hurricane or civil war. 
In 1999 the government owed RD$211-million in interest debt on its debt to commercial banks. Two years later, in 2001, the figure shot up to RD$727-million, or 1.2% of the total fiscal revenues for the year. 
Economist Pedro Silverio, director of the Centro Economico de las Antillas, the Cenantillas think tank, warns that when the Dominican government borrows, it is competing for the same resources as the private sector, thereby crowding out the business sectors which have had to pay more to borrow given the scarcity of resources.
Interestingly, borrowing in dollars from local commercial banks is not registered as incurring foreign debt and thus the Dominican foreign debt does not reflect the reality of the Dominican government foreign currency debt.

Sources of lack of confidence
Economists and businessmen alike say that the present run on the dollar, which has caused the rate of exchange to reach previously unheard-of levels of RD$22 to US$1, is a psychological phenomenon. The peso has lost 25% to the US dollar in the past four months after relative stability for the previous six years.
Economist Pedro Silverio, writing for El Caribe today, says that the general lack of confidence is due to the economic policies of the government. He expounds on this theory by mentioning the fiscal policy of financing public investments in great measure with the use of external resources and the adjustments made to the cost-structure of producers and consumers. 
He says that both producers and consumers have been affected by an avalanche of adjustments, ranging from power increases, fuel increases, and interest rate increases - all further compounded by the withering value of the peso. 
Silverio says that what is needed is not merely a change in fiscal policy. “The situation calls for changes that have sufficient credibility to induce economic agents and thereby bring back the dollars they have removed from the system.”

New rural assistance program
The Ministry of Education, with the help of the USAID office, will provide kitchen equipment, latrines and cisterns to dozens of rural schools. This program will benefit communities in the provinces of Hato Mayor, El Seibo, Monte Plata, San Pedro de Macoris and Samaná, considered to be among the poorest regions in the Dominican Republic. The program is financed through the Global Food for Education Initiative Program (PIGAE), which channels donations of wheat and soy oil made by the US government to the Dominican Republic. These products are then sold on the local market and the funds generated are destined to the rural assistance project. The design and execution of the plan is being carried out by the executive council of the PIGAE, which includes members of the Department of Agriculture, USAID, the Ministry of Education of the DR, and the Technical Ministry of the Presidency. The program will cost RD$218-million to implement.

Emergency meeting of the chicken producers
Chicken is a basic part of the Dominican menu and, more importantly, a crucial element in the diet of the poor and under-privileged. Recent rumors of a 100% increase in the cost of chicken have created a very tense situation for government officials. In an emergency meeting yesterday of producers and members of the Agro Business Board (JAD), the chicken suppliers were able to fix the price of a pound of chicken at RS$9.00. However, while able to guarantee a supply of chickens for December and January, they warned that their production costs were rising at an unacceptable rate. As examples, they showed that corn had risen form RD$97 per hundredweight (qq. or quintal) to RD$135 / qq.; soy meal has gone from RD$175 qq. up to RD$230qq.; and phosphate meal from RD$270 to RD$370 / qq.

Wendy’s evicted from airport
Astrid Diaz Menicucci, executive director of Aerodom, the privatized operator of the Las Americas International Airport, said that Vitala, S.A./ Wendy’s fast-food eatery was evicted from its third-floor Las Americas locale due to outstanding debts. Diaz said that Wendy’s refused to operate from the food court area of the airport. Aerodom has been investing US$248 million in the remodeling of the airport.

Kidney patients cannot wait
While the government announced yesterday that funds had been appropriated for renewed dialysis services at the four public hospitals that offer the service, it appears that the patients in need of the treatment are unsatisfied, according to a front-page story in the major papers. At the Padre Billini Hospital, patients and doctors staged a protest, stating that the money that has been designated would not be nearly enough to satisfy the demand for kidney dialysis in the hospitals of the Dominican Republic.

18-hour blackouts in Cristo Rey cause trouble
With the influential priest, Father Rogelio Cruz, imploring consumers not to pay their electric bills, the crisis in Cristo Rey has entered a renewed period of resistance to the people of EDE Este, the power distribution company. Father Rogelio, well known for his activism, headed a march from the overcrowded ghetto’s parish house to the National Congress, in an effort to support the Senate’s proposal to reclaim the distribution rights from the EDE Este and other privatized enterprises. Speaking to the press outside of the Congress, the priest told reporters that his flock was supporting congressional efforts to remove the Spanish companies from the Dominican Republic and that within his own parish, people were fed up with 18-hour blackouts and only 6 hours of electricity a day.

Remaining Siamese twin’s condition improves
The only remaining Siamese twin, separated from her sister two days ago, has begun taking breast milk from her mother and doctors at the San Isidro military hospital were optimistic at her progress. In an unusual series of events, two sets of Siamese twins were born within days of each other in Santo Domingo. The first set died quietly last week, as doctors were preparing to take them to the United States for treatment.

An interesting day at the CAC Games
Dominican athletes participating in the XIX Central American and Caribbean Games in El Salvador are going for as many as six gold medals today, with finals in Greco-Roman wrestling and boxing to take place. Yesterday the Dominican baseball team picked up the bronze medal by defeating Nicaragua 4 – 2. Francisco Garcia and Ronald de la Rosa each obtained bronze medals in the boxing event last night. However, the big news in the athletes’ dining area was the arrival of Super Felix Sanchez, the world champion of the 400-meter hurdle racing event. Sanchez, unlike many other celebrity athletes, will stay in the Village, rather than a luxurious hotel. In the dining room athletes from every country competing in the Games approached Sanchez to say hello and ask for his autograph. The Dominican Republic medal count now stands at 83.

Last night’s baseball
Escogido drops Aguilas Again.
In Santiago, the Leones de Escogido defeated the Aguilas Cibaeñas 6 – 1, marking the fourth time that the Leones have beaten the Aguilas in their home ballpark. Lance Davis threw five innings of 4 hit baseball and the Atlanta Braves Rafael Furcal scored the first run as Escogido coasted to the win

Giants of Cibao drop Estrellas in 11 Innings.
Julio Ramirez (Angels) stroked a solo homerun in the 11th inning off of Estaban Yan (Marlins) to lead the Giants over Estrellas in a battle for second place. Jeremy Hill (Royals) earned the victory, his first of the season.

Licey Ends Skid at 4, Drop the Bulls
Powered by 3 homeruns, the Licey Tigers were able to stop their losing streak at 4 games with a 7-3 victory over the last place Bulls. Manny Martinez, Andy Abad and Raymond Nunez all homered in a game that kept Licey out of last place and kept them within 3 games of Escogido and the final playoff spot.

Standings
Aguilas Cibaeñas       24  11  --
Estrellas Orientales    19  16  -5
Gigantes de SFM        18  17  -6
Escogido                   17  18  -7
Licey                        14  21  -10
Azucareros del Este   13  22  -11

Tonight’s games
Gigantes de San Francisco are at the Estadio Quisqueya in Santo Domingo to face Licey
The Aguilas Cibaeñas will be at home against the Estrellas Orientales
Escogido will travel to La Romana to go against the Azucareros at the Frank Michili ballpark. 
 
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