DR1 - Daily News 20 December 2002

Daily News - 20 December 2002

Refinery is receiving fuel
Central Bank against the illegal trading
Sovereign bonds will have to wait
Another loan stuck in congress
US$17.2 million more for signs
Provisional method for social security
The chicken and the ass
Inflation will be more than 10 percent
Phone bills will be more expensive
Doctor that lived in the DR is linked to Al Qaeda
Dominican-American Caucus being formed

Refinery is receiving fuel
The Dominican Petroleum Refinery has taken measures to prevent any shortage of supply as a consequence of the present political crisis in Venezuela. Most of the oil imported to the DR is of Venezuelan origin, however, the refinery has recently opted to purchase refined fuel from other nations. The refinery reports that in the last three days it has received 394,000 barrels of diesel fuel, 236,000 barrels of gasoline and 75,000 barrels of aviation fuel purchased from the USA. The refinery also expects to receive tomorrow 55,000 barrels of propane gas, of which their reserves had been depleted as of the 17th of this month. The propane gas purchased from the US should be enough to tide the nation over well into the month of January 2003. Fuel prices are currently on the rise due to the recent escalation of oil prices in world markets.

Central Bank against the illegal trading of US dollars
In paid publications in today’s local press the Central Bank warns that the buying and selling of US dollars should be transacted only by authorized institutions, such as banks and exchange houses, as stipulated in the recently ratified financial code of law.
The official exchange rate is now hovering at RD$20.80 to the US$1, however, there are reports that a "parallel market" is trading at $21.80. The illegitimate trading of dollars is punishable by a fine of up to RD$10 million and potential operational restrictions. Some economists suggest that the black market trade of US dollars is a result of a monetary policy that strives to over-regulate the market, rather than guide it.

Sovereign bonds will have to wait until next year
Minister of Finance Jose Malkum yesterday expressed his concern that the approval of the US$600 million in sovereign bonds would have to be postponed until next year. When the president of the Chamber of Deputies, Rafaela Alburquerque, was asked to comment, she said: “Congress will not discuss the sovereign bonds until the Senate has approved changes to the Electoral Law.” She and Marino Collante, president of the Finance Commission in the Chamber of Deputies, will meet with President Mejía’s economic team on Monday. When the press asked Senator Cesar Matias about Alburquerque’s comments, he responded: “Deputies are retarded and irresponsible as politicians; they know that our commission is working on the changes to the electoral law and they should stop trying to blackmail the senators. That type of attitude is as irresponsible as getting a paycheck without having worked at all.”

Another loan stuck in congress
A note for US$17.2 million at a rate of 8 percent interest was granted by Banco Bilboa Vizcaya (BBVA) to the Dominican government, for the improvement of safety conditions on Dominican highways, however, it has been immobilized by the Chamber of Deputies for the past few weeks. The Technical Secretary of the Presidency Rafael Calderon signed his approval to the project, with the President’s authorization, but when the Chamber of Deputies received it, 17 of the officials would not give it their sanction. Most of these 17 deputies are said to be furious over the fact that the president of the deputies, Rafaela Alburquerque, made a commission to present the loan to the chamber with documentation containing only very general information. Ramon Bueno, deputy for the PLD (Party of the Dominican Liberation) said that the only thing the deputies had been informed of was the amount of the loan and the type of protection that the highways will receive. Bueno said that no information was included as to which highways are involved, how many kilometers or by what highway design would be improved. He said that until more specifics are given, they would not consider voting in favor of the loan.

US$17.2 million more for signs already paid for?
El Caribe newspaper criticizes the government’s insistence on the passing of a US$17.2 million loan for the purchase and installation of road signs and security devices along the highways. The contract has been awarded to the Spanish firm of Ingetec Europa, which is being described as a “ghost company” for its dubious merits in the industry. Ingetec Europa has no track record of previous sign installation nor has it performed any kind of construction work in the past. Interestingly enough, however, the company has the same address in Spain as four other companies that have obtained profitable contracts from the Dominican government: Eurofinsa (US$49.1 million), Riogersa (US$106.9 million), Suministros y Equipamientos Medicos Vitaria (US$26.9 million) and CCL Peninsular (US$20.9 million). The loan is being requisitioned at a time during which the government also seeks US$600 million in sovereign bond funds ostensibly to restructure similar high-cost, short-term loans from banks abroad.
Alejandro Montas, who is in charge of the construction commission for the Chamber of Deputies, says that the security fences for which parts of the money would allegedly go to are already included in the construction budgets of most highways, therefore causing a redundancy.
Montas, a former president of the College of Engineers and Architects (CODIA), believes that the loan in question is scandalous for its repayment terms. Montas called the situation nothing less than big business and the payment of lobbying.
The loans have been approved by Technical Secretary of the Presidency, Rafael Calderon, in conjunction with the Banco Bilbao Vizcaya Argentaria and Minister of Public Works Miguel Vargas Maldonado. President Hipolito Mejia sent the loan contract to Congress for approval. The bill was passed in the PRD-majority Senate, but some opposition member deputies have refused to lend their support for the loan.
El Caribe newspaper points out that the terms of the loan flagrantly violate the borrowing policy President Hipolito Mejia said his government would implement as of 27 February.
The editorial in El Caribe points out the contradiction between the urgency of the government in passing the controversial loan and the “Pact for Macroeconomic and Monetary Stability” made with the business sector whereby the government commits itself to reduce spending.

Provisional method for social security approved
The National Council for Social Security (CNSS) has approved a provisional procedure for registration, invoicing and payment. This temporary procedure seeks to speed up the implementation of the National Health Insurance program in the four southwestern provinces where the new Social Security Law was initiated on 1 November of this year.
The four provinces where Law 87-01 is being applied are Barahona, Pedernales, Bahoruco, and Independencia. Many difficulties have been encountered in the registration process because there are many forms completed incorrectly or incompletely. So far, press reports say that less than 3,000 persons have been formally registered.
For this reason, the CNSS has decided to establish the Jaime Mota Public Hospital in Barahona as the main registration center for health insurance providers. The CNSS hopes that this will make the process more fluid and facilitate the flow of funds from the Treasury Department into the new social security system.

The chicken and the ass
Yesterday morning in an exclusive interview on Channel 9 (Color Vision), former President Leonel Fernández said that the monetary and fiscal policy of the current government has deteriorated the economy in such a way that it must continually rely on external debt to keep it from a crisis. At noon when the President was asked to comment on the Fernandez statement, President Hipólito Mejía said, “He has no right to talk after the way he finished his four-year term. He is just hiding behind a camera because he is a ‘chicken’.” Later that night, when asked by the press about the President’s comment, Fernandez said, “It doesn’t really bother me because others have called me a “hen” and a “chick” and now a “chicken”. The only thing I am certain I have not been called is an “ass.”

Inflation will be more than 10, not 8.5 percent
The director of the Economic Center of Investigation of the Antilles (Cenantillas), Pedro Silverio said yesterday that the inflation rate in the DR will be well above 10 percent, not 8.5, as the Economic Commission for Latin America and the Caribbean (ECLAC) announced earlier this week. By the end of November, inflation had already surpassed 8.5 percent. “Probably this year will end with the highest inflation in the last 10 years,” Silverio added. Furthermore, his assessment concurs with the 4 percent growth of the economy for 2002 and emphasizes the direct relationship between the 4 percent growth and the US$600 million dollars in sovereign bonds.

Phone bills will be more expensive
The two main phone companies in the country, Codetel and Tricom, have announced increases between 8 and 20 percent on telecommunication charges starting next year. These increases will affect mobile phones, Internet services and residential phones. Businesses will receive increases of 15 to 20 percent. The Tricom public relations vice president, Gerty Valerio reasons that the current economic conditions have forced the company to raise rates but ensures that they continue to be committed to provide the best service to clients. Codetel announced the increase in a letter sent to clients. They explain that the changes are key to maintaining the level of investments that are necessary for next year. Codetel will invest US$20 million in 2003.

Doctor that lived in the DR is linked to Al Qaeda
Agents of the Federal Bureau Investigation (FBI) detained nine suspects in Pakistan, who are believed to be members of Al Qaeda. Of the nine suspects, one is a doctor named Ahmad Javed Khwaja, who reportedly practiced his profession in the US and the Dominican Republic. He is 65 years old with a home in Lahore, Pakistan, according to a report in Hoy newspaper.

Dominican-American Caucus being formed
A proposal by the Washington-based Dominican American National Roundtable (DANR), working in close conjunction with it Rep. Charles Rangel (D-NY) and other friends of the Dominican Republic in Washington, seeks to form a Dominican-American Caucus in the U.S. House of Representatives. The announcement was made by DANR executive vice president Jose Ramon Bello.
“With Dominicans living in the US now exceeding 1 million and with 14 Dominican-Americans elected to public office in 5 states and Puerto Rico, we feel very strongly that the formation of a Dominican-American Caucus in the U.S. House will provide us with the added support necessary to garner greater awareness of Dominicans to the U.S.,” said Bello in an interview with journalist John Collins of Caribbean Business.
“Dominicans are concentrated in several states, including New York, New Jersey, Florida, Connecticut and Rhode Island, among others.” In last November’s elections a total of eight new Dominican-Americans were elected to public offices in Maryland, Massachusetts, New Hampshire, New York and Puerto Rico (San Juan Municipal Assemblywoman Claribel Martinez), bringing the total for the US to 14.
A US congressional delegation will visit the Dominican Republic in February, bringing with it Dominican-American elected officials on hand to meet with President Hipolito Mejia, Chamber of Deputies President Rafael Alburquerque, US Ambassador Hans Hertell and American Chamber of Commerce president Carlos Ros, among others. The formal creation of the Dominican-American House Caucus is expected to be announced at that time.
For more information, see http://www.danr.org