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Waiting on President Mejia Today’s editorial in the El Caribe newspaper explains that the key in resolving the current run on the peso is in the hands of President Hipolito Mejia. El Caribe points out that the six resolutions issued by the Monetary Board show that the exchange crisis is due to political and fiscal causes, which cannot be resolved exclusively by Central Bank measures. All the Monetary Board can do is gain time by restricting loans to the public and private sectors and by postponing the expiration of government certificates of deposit. Economists say that the “real” exchange rate is RD$20-RD$22 to the US$1 and that the discrepancy is due to a lack of confidence in government measures. The Monetary Board resolutions issued on Sunday establish:
The Monetary Board also instructed the Central Bank to design and coordinate a mechanism that would provide organized access to the market for those interested in sizable purchases of foreign exchange, including those of the power sector, so as to avoid undue pressures on the market. |
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IMF turns down a stand-by agreement Listin Diario reports that the International Monetary Fund would not issue a stand-by agreement for the Dominican Republic, as it does not consider the local economy to be in a state of crisis. A delegation from the Ministry of Finance and the Central Bank visited the IMF last week for consultations and was told that the IMF would not intervene because it considers the Dominican economic situation to be manageable. Deputy Minister of Finance Apolinar Veloz and Luis Reyes, Director of the International Department of the Central Bank, conferred with officers of the IMF, whereby it was decided that the IMF would consider monitoring the Dominican economy and make periodic visits to the country. |
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8.54% inflation Accumulated inflation for the January to November period of 2002 hit 8.54% percent compared with last year’s. The Consumer Price Index of the Central Bank reports an inflation of 0.48% in November compared to that of the previous month. This rise reflects major increases in housing, food, and health costs, however the most inflationary factor for the month of November was the significant increase in the cost of electrical power. |
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Venezuelan crisis concerns DR According to a story in today’s Hoy newspaper, the strike that has paralyzed Venezuela could directly affect the DR. The DR purchases 75% of its petroleum from Venezuela as part of the San Jose Agreement, and, according to the Dominican Petroleum Refinery, consumes approximately 140,000 barrels of petroleum a day, thereby generating an annual fuel bill of US$1.5 billion. The remaining 25% of petroleum is bought from Mexico and Trinidad & Tobago could be viable options, should Venezuela become unable to supply necessary amounts of oil. |
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Need to cut government spending The president of the National Council of Private Business (CONEP), Marino Ginebra, attributed the present economic crisis to the generalized perception that the government does not understand the need to cut its own spending. Ginebra said the government must reduce its excessive staff to send a clear message to the working population. In an interview with Hoy newspaper, Ginebra said the private sector will only receive fresh resources once the government starts cutting back. He said the priorities of today’s economy are very different from those of 25 years ago. According to Ginebra, 85% of the Gross Domestic Product is generated by the private sector. When that sector is discouraged there are negative repercussions on the economic development of the entire nation. Nevertheless, businessmen Campos de Moya said there is strength in the Dominican economy yet. He mentioned the new tourism projects, such as Cap Cana and Casa de Campo. Campos de Moya believes that if these developments are advancing at a rapid pace, “then the Dominican private sector that makes up 85% of the GDP has confidence in the country.” He mentioned the difference between the DR and other countries, such as petroleum-producing Venezuela, where the government is responsible for 80% of the GDP. Ginebra insisted that the government needs to send the right signals and that the country can only evolve if it has the contribution of the production sectors that are willing to risk their capital in the Dominican Republic. |
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Big names in Pepegate scandal Adding to the speculation regarding the Pepegate case, President Hipolito Mejia said yesterday, on his Sunday talk show, that, “there are big names involved in the case.” The Pepegate case exploded when Baninter took the case public, admitting that RD$40 million in irregular charges had been charged to a Visa card issued to Pedro Julio Goico and his relatives. Goico, at the time, was the head of the presidential advance team as well as head of security for President Hipolito Mejia. Goico used the card to make million-peso personal purchases. Baninter has not yet pressed formal charges in the matter. President Mejia said on the Una Vez a la Semana show, produced by Ramon Colombo and Juan Taveras Hernandez, that he was leaving it up to justice to reveal these further details in due time. |
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Fernandez criticizes government borrowing Former President Leonel Fernandez criticized the abilities of the PRD political party and the government to lead the nation. He said that the present government, even with its budget of RD$83 billion, has not been able curtail the inflation that is currently punishing Dominicans. According to Fernandez, even if the government has been managing more money, no amount is ever enough and the President has to borrow from local banks and abroad. “With the RD$6 billion debt that we (the PLD) left, the PRD government has taken the figure to RD$15 billion. That is to say, they have taken RD$9 billion from the private sector,” he said. He also mentioned the first placement of sovereign bonds, or an additional RD$8 billion, and the upcoming placement for an additional RD$12 billion. “This means the government will have placed RD$20 billion in sovereign bonds with RD$9 billion that it owes the private commercial banks, in addition to many other loans, totaling RD$30 billion.” He blamed the borrowing habits of the Mejia government for the macroeconomic instability and the devaluation of the peso. The former President spoke during a visit to Barahona on Sunday. He said that during the first two years of PRD government, the nation has lost 160,000 jobs. He also pointed to the fact that at the end of his government the peso was RD$16.30 to the US$1 while now it is at RD$23-RD$24. |
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Preparing for the drought The director of the Corporacion de Acueducto y Alcantarillado de Santo Domingo (CAASD) urged conservative use of water, as weather forecasts allude to an imminent drought whose effects would be felt on the island this winter and next spring. He calls for a change in the consumption habits of all Dominicans and recognition of the need to conserve water. The CAASD has been installing meters in the capital city in order to encourage more careful use of water. So far, 35,000 meters have been installed, causing residents to rethink their wasteful tendencies as their bills are now based on their consumption of tap water. The new system of invoicing is already more than doubling the cost of water to the consumer. |
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Blackout at the Presidential Palace Reports say that a blackout at the National Palace brought dinner to a hasty end. Accordng to a story in El Caribe, the Presidential Palace has been plagued by blackouts since Friday, when the Christmas tree lights were turned on. The blackout at the Palace was attributed to the routine maintenance of its power plants. AES Ede Este, which serves the area of the city in which the palace is located, has a new general manager, Guillermo Ibañez, who replaced former manager Karl Huber upon his return to the US. The company has consistently complained that the government is one of its most delinquent accounts receivable. |
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Missing at Bahia de las Aguilas 26-year-old Alexis Dume has become the third son of a businessman to be kidnapped in the past two months. Dume is the son of the head of the Bani-based prosperous Dume business group, which operates a chain of small grocery stores under the Dume Troncoso brand name in Santo Domingo. The amount of the ransom sought by the kidnappers was not disclosed. As in the case of the kidnapping of businessman Marcial Najri’s son, the victim’s relatives preferred not to take the case to the Police and instead were assisted by a kidnapping expert from the United States. The other recent kidnapping was that of Juan Fernando Capellan, whose abductors, in common with the other two cases, have not been caught by police. Capellan, like 24-year old Eduardo Najri, were successfully returned to the families. |
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New La Romana cruiseship port Casa de Campo inaugurates today the new cruise-ship facilities at the Port of La Romana. The vessel Costa Marina will make the inaugural visit with its 1,200 tourist passengers today. The highly-evolved port cost US$12 million to equip and is the private venture of Central Romana, which also owns Casa de Campo. The cruise ship visitors will be able to take tours to Altos de Chavon, Casa de Campo, la Marina Casa de Campo and Isla Catalina. Twelve La Romana areas are being readied as souvenir shopping districts, including the Plaza Centanario (next to the fire station), Juan Pablo Duarte Park, Palo Hincado Park (Obelisco), Calles Francisco Richiez Doucudray, Eugenio A. Miranda, Diego Avila, and Dr. Francisco Gonzalvo and Avenida Libertad, according to El Caribe. For this year, some 142,000 tourists are expected to arrive, onboard 83 cruise ships, via the route of Isla Catalina-Port of La Romana, where last year 38 ships docked carrying 118,000 visitors. According to Claudio Silvestri, president of the Casa de Campo operating company, the number of visitors could increase to as many as 400,000 for the 2003-2004 season and then further to half a million for 2004-2005. |
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USA3000 flights USA3000 announced the start of its regularly scheduled service to begin in December. For some years now, the airline had operated chartered service to Punta Cana, in connection with one of the largest US tour operators, Apple Vacations. USA3000 will fly as of Thursday, 12 December from Newark to Santo Domingo’s Las Americas International Airport. For the timetable of this flight, see http://www.usa3000airlines.com/timetable2.htm To contact the airline in Santo Domingo, call 809 562-3031 or 562-3028 or email usa3000@codetel.net.do USA3000 operates flights from Philadelphia, Newark, Chicago O'Hare, Pittsburgh, Hartford-Bradley, Baltimore, Columbus, Cleveland, Cincinnati to warm-weather destinations in the Caribbean and Mexico. |
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Best performance in CAC Games The Dominican delegation to the Central American & Caribbean Games held in El Salvador turned out the best performance ever in a regional competition. The team returned with 132 medals, of which 35 were gold. Track and Field events contributed nine gold medals, five silver and one bronze, despite the fact that there is no adequate track in the Dominican Republic. A highlight of the games was the participation of Dominican hurdler Felix Sanchez, who competed with the 4 x 400 relay-race team that won the gold medal. Another highlight was the gold medal and new Central American and Caribbean 1.97 High Jump record set by Juana Arrendel, who was making a comeback after having lost her gold medal in the 1999 Winnepeg Pan American Games for testing positive in a doping test. Judo competitors also did very well, with six gold medals, including two from Jose Vicbart Geraldino. Doiminicans won five medals in Karate and did well in the Equestrian competition, with Ivonne Losos winning two. And the victory was especially sweet, when the Dominican volleyball team brought home gold in Volleyball, after defeating the rival Puerto Rican team, to whom they had lost in the World Cup. http://www.elsalvador2002.org.sv/results/MedalStd_01.asp |
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