|
|
|
|
|
|
|
|
|
Government and business economic agreement Economic news dominates the headlines this morning as President Mejia met with leading businesspeople and bankers to find ways to lower and stabilize the dollar-to-peso ratio. In an attempt to re-align some of the government’s economic policies, the National Council of Private Business (CONEP) signed an agreement with the government called the “Stability and Economic Development Pact”. In particular, the 1.5% tax paid in anticipation of profits and based on monthly sales figures will be phased out. Although such announcements have been made previously, it appears that this time the elimination of the tax may stick. The agreement proposes that on 1 January 2005, the tax be reduced to 0.5%, or 1/12th of the taxes paid the previous year. (The Mejia government’s term of office ends on 16 August 2004.) The deal, put together by CONEP and mediated by Monsignor Agripino Nuñez Collado, was signed yesterday at the Presidential Palace. |
|
Major facets of the CONEP agreement According to Hoy newspaper, the basic elements of the agreement are the following: (1) The extension of the 1.5% tax on gross income, to be paid monthly, until 31 December 2004; (2) The removal of the advance payment of the ITBIS (a type of IVA tax) on the purchases of capital goods and services, with certain exceptions; (3) The fiscal and tax restructuring needed to make up revenue lost by the dismantling of the Exchange Commission also contained in the agreement; (4) New fiscal and tax reforms, as well as the dismantling of the above-mentioned Exchange Commission, to be established by the Monetary Board, and ideally taking effect simultaneously with the new Monetary and Financial Law; (5) A government promise to generate a fiscal surplus of at least 0.3% of the Gross Domestic Product in 2003, an estimated RD$100 million monthly, to be removed from circulation; (6) Clauses that will oblige the government to refrain from new monetary or tax changes, except in the course of the ongoing free trade negotiations, and to execute the 2003 budget as sent to Congress with an emphasis on austerity and and controlled government spending. (7) A commitment by the government to reduce the payroll of government staff to the levels of August 2000 (when Mejia entered office). |
|
Exchange rate drops Diario Libre reports today that following the measures announced by the Monetary Board and the signing of the “Stability and Economic Development Pact” with the business community, the rapid devaluation of the peso seemed to be contained. News reports say that exchange houses were selling dollars at RD$23 to US$1, down from the RD$25 to US$1 peak price of last Friday. Diario Libre says that few people were buying dollars yesterday, as most expect the peso to continue its climb. El Caribe reports that exchange houses and commercial banks agreed that the dollar should be sold for approximately RD$22 to the US$1. El Caribe also reports that among the measures taken to stabilize the peso is one whereby the government commercial bank, the Banco de Reservas, would supply the power companies with the dollars they need. |
|
Economists comment on new measures Economist Pedro Silverio, of the Cenantillas economic think-tank, discarded the possibility that the measures taken yesterday would produce any significant impact on the exchange market. Silverio believes the root of the problem is a fiscal issue, which is not being tackled. He says in a note to Hoy newspaper that the steps being taken are the same as those the Monetary Board has been trying to bring about all year, with no reassuring effect on the important economic sectors. “The scope of the problem is fundamentally in the tax policies, use of revenue and public debt…It is there that decisions must be taken in order to tranquilize the economic sectors,” Silverio said. He stated that the monetary policy-makers have demonetized RD$18 billion this year, without, however, any slowdown on the devaluation of the peso. Businessman Antonio Espin told reporters that he felt the recent measures were positive, but that the exchange agents were studying the measures in order to fix their positions. The Dominican Federation of Businessmen (FDC), in a press release, expressed the opinion that the recent moves by the monetary authorities might produce higher interest rates. The press release says that “the economy and the commercial activities have been constrained by the restrictive measures taken to reduce liquidity, and which have produced interest rates that are very high.” |
|
Former Minister of Finance Alvarez Bogaert Former Minister of Finance Fernando Alvarez Bogaert told reporters that the large devaluation registered in the Dominican economy this year is due to an erroneous idea that it would be possible to devalue the peso to a rate of 20 to 1. Alvarez Bogaert said that he felt this was a mistake, since devaluation works when there are “relative prices”. “Here, in the Dominican Republic, there are no relative prices,” he said. |
|
Refinery looks for oil in other places The Dominican Refinery (REFIDOMSA) opened bidding for fuel supplies in the Caribbean and Gulf of Mexico markets. Pedro Justo Duarte, the president of REFIDOMSA, said that this move will guarantee a supply of semi-processed crude oil for the Dominican Republic, especially in light of the current situation in Venezuela. Justo Duarte said that, up until now, there has been no problem with supplies from Venezuela and that just last Sunday, a tanker arrived with 500,000 barrels of crude oil to be processed at the refinery. According to Justo Duarte, the country has a 22-day supply of fuel at the refinery, but at the same time, they are taking steps to ensure future demands, in case the situation in Venezuela takes a turn for the worse. Bids at prices similar to the current offers from Venezuela are being accepted from Puerto Rico, Colombia and Trinidad & Tobago. “We are looking at a worst-case scenario,” said Justo Duarte, “and we are making contingency plans.” |
|
Ambassador seeks more DR-Canadian trade Dominican Ambassador in Canada Eduardo Fernandez was in Prince Edward Island, Canada to meet with business, education and political leaders and to push for increased trade between the Dominican Republic and Canada. The DR and Canada are at present discussing a free trade accord that is slated to be signed before summer 2003. Ambassador Fernandez is traveling across Canada to encourage Canadian businesses to look into the new opportunities that are opening up. In an interview with The Guardian, Fernandez said that the Dominican Republic's trade with Atlantic Canada seems to have changed very little since colonial times. “We buy potatoes from Prince Edward Island, canned sardines from New Brunswick, [and] salt fish from Nova Scotia. People from your region come to my country as tourists,” he said. "That's fine. It's all trade. But I think we could do much more." He continued, saying, "Canadians maybe have had it too easy with the United States as their neighbour. Maybe I'm being fresh when I say this. When Canadians look for foreign markets, they can just look south and they don't have to look further. The Americans don't do that with Canada, they look for markets across the world. The Japanese, a tiny country with almost no natural resources, they trade everywhere in the world." Fernandez wants to encourage Canadians to look further south than the United States to seize upon the many business opportunities becoming available in the Dominican Republic. For the The Guardian interview, see http://www.canada.com/charlottetown/ |
|
New docking facility in La Romana President Hipolíto Mejía was in La Romana yesterday for ribbon-cutting ceremonies at the new international tourist docking facility opened in the Port of La Romana. About US$12 million dollars were invested in the new wharfs and an estimated 147,000 vacationers, traveling on 67 cruise ships, are expected to use this facility during the 2002-2003 year. Tourism in La Romana was up 10.7% during November, its best monthly performance of 2002. Average occupancy was 64%, up from 56.8% a year ago, and up from 49.2% in October. Although the overall occupancy rate is down for the year, this latest upturn is seen as a very positive indicator of tourism’s future. |
|
A Christmas story El Caribe newspaper brings its readers today a real-life Christmas story, complete with a happy ending. Three months ago, 26-year-old Manuela Lluberes gave birth to a premature baby girl at the Altagracia Maternity Hospital in Santo Domingo. Due to the premature presentation, a caesarian section was performed. Someone (no one knows who) told the mother that the baby, who weighed just one pound and a few ounces at birth, had died and the mother left the hospital. However, such was not the case: the hospital’s Perinatology Department, under Dr. Luis Rivera, took charge of the infant, bringing her to a healthy weight. While a certain mystery surrounds the mother’s disappearance from the ward, the hospital director, Dr. Francisco Gomez, says that he prefers to think that, thinking that there was no chance for the baby to live, the mother lost her grasp of the situation and resigned herself to the loss. He says that he cannot accuse the mother of abandoning the child. Once the baby had reached an acceptable weight, the social workers sought out the mother in Baní, about an hour’s drive west from Santo Domingo. On Friday, the social workers for the hospital located the mother at her house in the Gualey section of Pizarrete in Baní, and gave her an early Christmas present: a healthy and happy three-month old baby girl. “Just imagine!” said Dr. Gomez. “The fact that we were able to bring baby and mother together again is enough to feel great satisfaction.” |
|
Human rights better than last year Although 96 people have died so far this year at the hands of the police, this is significantly fewer than last year, in which 350 were killed. The National Commission for Human Rights, in a document given to the press, tells of less progress in other human rights areas, however. In the harshly critical document, the Human Rights Commission says that human rights in the Dominican Republic “are violated minute to minute, day to day, week to week, month to month and year to year.” The report, presented at the VI International Seminar on Globalization and Human Rights and titled “A Caribbean Perspective”, focuses on the mistreatment of 75 citizens, 25 victims of torture, hundreds of illegal arrests and 2,000 people whose constitutional rights were violated by being detained for more that 48 hours without due process by the Justice Department. |
|
Sports night at the Presidential Palace With the all-too-obvious absence of Sammy Sosa, Alex Rodriguez and Pedro Martinez, Major League Baseball executives and the President of the Dominican Republic got together for a dinner party honoring baseball writers and ball players. President Hipolito Mejia, Vice President Milagros Ortiz Bosch, Minister of Sports Cesar Cedeño, and Minister for Public Works Miguel Vargas sat down with Peter O’Malley of the Los Angeles Dodgers and Sandy Anderson from the Commissioner’s Office. Among the honored were Juan Marichal, Ozzie Virgil, Felipe Rojas Alou, Omar Minaya, Freddy Jana and Juan Guzman. The MVP of the American League, Miguel Tejada, received, perhaps, the loudest applause. |
|
|
|
The contents of this webpage are copyright © 1996-2008. DR1. All Rights Reserved. |
