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Government proposal to the IMF The government published full-page spreads in most morning newspapers today, regarding its petition to the IMF in exchange for US$1 billion in assistance. Negotiating for the government are Central Bank Governor Jose Lois Malkum, Technical Secretary of the Presidency Carlos Despradel, Finance Minister Rafael Calderón and Superintendent of Banks Julio Cross. The government is pursuing an agreement with the IMF to restore confidence and foreign-exchange stability. In its letter of intent to the IMF, the government proposes to:
Some of the mechanisms announced by the government include a 2% tax on all imports; a 0.15% tax on all checks; and a US$10 hike for outbound passengers at airports and ports (increasing the cost of the departure card to US$20). |
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Dollar hits RD$39 to US$1 The dollar hit a mark of RD$39 yesterday, in spite of a dwindling supply of pesos and even fewer dollars. El Caribe reported that the dollar rose RD$2.23 in trading houses. Some commercial banks continued to make dollars available at a rate of RD$28 for credit card payments while others were selling dollars at RD$38 for cash exchange. The Central Bank, meanwhile, has limited credit to the exchange houses, re-assumed control of hard-currency sales from exporters and other generators of hard currencies, and taken billions of pesos out of circulation – with none of these tactics succeeding in bringing the dollar down. |
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Reactions to the announcement The head of the National Council of Business, Elena Viyella de Paliza, reaffirmed yesterday that an agreement with the IMF should bring issues of national interest and economic stability to the forefront. The business leader was attending a meeting with President Hipólito Mejía, and expressed her group’s support of the IMF accords as presented. The head of the Banco Popular Dominicano, Manuel Alejandro Grullón, expressed his belief that the IMF proposals, as they had been explained in the meeting, would not adversely affect the neediest groups of people in the Dominican Republic. The leftist side of the Dominican political spectrum has expressed a complete disagreement with any accord involving the IMF. Minority groups such as the Nueva Alternativa (New Alternative), the Communist Party, the Worker’s Socialist Party, UPA and the Popular Dominican Movement, staged a protest in front of the Central Bank and warned of “dire” consequences resulting from any agreement. They promised to take to the streets should a deal with the IMF go through. |
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ANJE and the IMF The Young Entrepreneurs’ Association (ANJE) warned that the anticipated 1.5% or 2% increase in taxes on imports is a mistake and could be classified as unconstitutional. Marisol Vicens Bello, the association’s president, told Cándida Acosta of the Listín Diario that the authorities have not acted with the full transparency required for these negotiations. She pointed out that even if the new taxes were cloaked under the guise of customs duties, “they would still entail an obviously illegal [new] tax”. Vicens also attacked the proposed tax on checks as an additional load for the business community to bear. She warned that these new measures might generate a new and untried informality for business transactions and a possible evasion of taxes as a consequence. |
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Senate to pass concerted tax reform bill According to the president of the Senate finance committee chairman, César Díaz Filpo, the Senate will pass the new tax correction package, article by article and in accordance with the terms agreed to in the “Pact for Economic Growth and Stability” that was signed last December. Díaz Filpo said that the copy the business community had received was a “wrong version” of the proposed corrections to the tax legislation. |
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EU ambassador warns about indebtedness European Union Ambassador Miguel Amado warned, when speaking during the opening of the II Forum of the Program to Support Small Business and in the presence of President Hipólito Mejía, that the country could not take on unlimited debt in the medium or long range because this translates into limits on credit and the transfer of assets to foreigners. As reported in Diario Libre, the representative of the European Union in the Dominican Republic said: “Insufficient national savings to investments translates into an increase in foreign indebtedness and consequently an increase in the interests that need to be paid in the future to foreign capitals.” He said that the DR continues to be one of the least indebted Latin American countries, but the present increase in liabilities makes adjustments and restraints on government spending unavoidable. The Mejía administration has taken on millions in dollar-loans with commercial banks under the guarantee of institutions such as Eximbank in the United States. |
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No evidence against Alvarez Renta As reported in Diario Libre, businessman Luis Alvarez Renta’s lawyers said that against their client “no evidence with any judicial proof value” has yet to be presented. Central Bank Governor Jose Lois Malkum mentioned Alvarez Renta when the government went public regarding the RD$55 billion Baninter banking collapse. Malkum mentions overdrafts and loans totaling RD$3.83 billion were erased from Bank Invest and states that the company was presided and managed by Luis Alvarez Renta. Lawyers Eric Raful and Angel Delgado Malagon said that the Central Bank presented incomplete documentation to the National District prosecutor’s office on the benefits and compensations received by the businessman in the sale of Bank Invest. The lawyers claim that Alvarez Renta ceased as president of the company in April 2002, more than a year before the Baninter scandal was revealed by the Central Bank. El Caribe says this is being disputed because other documents say the contrary. The newspaper mentions for instance that when it became public that Alvarez Renta would be the new Dominican ambassador in France, he included in his CV and protocolar documentation to the government of France the information that “through his subsidiary, Bank Invest, S.A. Luis Alvarez Renta & Asociados keeps a position in the Santo Domingo Bourse.” El Caribe reports that the business consultant told the judge that regarding the checks he authorized to his secretary Zaida Rodríguez in 2003, he was acting on instructions from the president of Baninter, Ramón Báez Figueroa, and that the money was used “to pay debts of the bank or of Mr. Báez Figueroa.” Alvarez said he was never an employee of Báez Figueroa, rather a consultant to his companies. Meanwhile, Judge Eduardo Sánchez Ortiz, who is preparing the case, ordered that Alvarez Renta be transferred from the Ciudad Nueva Palacio de Justicia detention hall to the Najayo Jail in San Cristóbal, but news sources say he will remain in the city jail for safety reasons. |
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US$150,000 for Dauhajre economic research The president of the Fundación Economía y Desarrollo, economist Andy Dauhajre acknowledged that his research center did receive a US$150,000 donation from Baninter, following a request made on 19 July 2002. He said the contribution was received in two payments from the Alta Financial Corporation of Miami Florida — one on 9 September 2002 (First Union National Bank) for US$50,000 and another for US$100,000 on 14 February 2003 (Wachovia). El Caribe newspaper points out that Alta Financial was a company used by Baninter to purchase large amounts of foreign exchange in the Dominican Republic. The newspaper also says that neither of the checks identifies the nature of the payment being made. But, in the statement sent to the press, the Fundación Economía y Desarrollo maintains that the fundswas used to conduct research on the real and financial sectors of the economy. The objective of the research was “to simulate the behavior of financial entities in changing and difficult situations (stress testing).” In the statement to the press, the foundation says that at the time, none of the members of the institution held a government position. Diario Libre reports that Dauhajre was at the time an economic advisor to the Executive Branch. In the press release, the foundation says that the foundation executives assisting the government are under contract as external advisors on macroeconomics. Dauhajre was responding to a revelation made by the lawyers of disgraced banker Ramón Báez Figueroa, erstwhile president of the now intervened Baninter. The lawyers affirmed that Dauhajre had solicited donations from Baninter, which they called a serious situation given Dauhajre’s stature as a government officer with access to confidential information on the liquidity problems of the bank. Dauhajre was the Dominican government’s leading consultant on the first (US$500 million in October 2001) and second (US$600 million in January 2003) sovereign bond placements. El Caribe reports that both Andy Dauhajre and Jaime Aristy Escuder, principal members of the foundation, traveled abroad yesterday. |
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Electoral Board presents plans for 2004 The Central Electoral Board (JCE) presented its plan of action for the 2004 elections at a meeting attended by representatives of the leading political parties and members of the various civic groups that monitor electoral affairs. The president of the JCE, Manuel Ramón Morel Cerda, was not present at the meeting, and his substitute, Luis Mera Álvarez, did not take part in any of the discussions. According to a report in the Diario Libre, Mera Alvarez’s role was more that of “an invited stone statue than an acting president of the Board”. Nelson Gómez, the head of the Administrative Court of the Electoral Board, revealed that 5.1 million Dominicans would be eligible to vote in the next elections. There will be 12,500 polling stations and 75,000 workers at the polls and local electoral boards. Both Hoy and El Caribe cited the fact that 900,000 voter registration and personal ID cards needed to be exchanged because of mistakes in the data. Part of the problem is the fact that when the “cédulas” were first devised in their current format, the capacity of many polling stations, limited to 600 voters, was ignored. The result was a very large overflow in certain cases which in turn led to chaos and voter irritation. According to Gilberto Cruz Herasme, the Director of Elections, the 900,000 voters need to be re-assigned polling stations in order to avoid the confusion of 2000. The board will invest RD$40 million pesos in the replacement process. |
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Electricity will be up 11% The price of electricity on next month’s billing will increase by 11% due to the exchange rate and fuel costs if the government does not apply the compensation funding that was created some months ago to avoid just these sort of price hikes. According to the superintendent of Electricity, George Reinoso, oil and dollars both rose significantly during the month of May. Reinoso told reporters from El Caribe that they were studying the compensation fund to see just how much the new price increase could be reduced. Reinoso said that the government had to pay the EdeEste, the Edesur and EdeNorte RD$240 million pesos, and that he was not sure if the reserved funds could cover another rescue of consumers. |
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Businesspeople announce major projects Mario Lama announced yesterday that his group has invested RD$500 million in the acquisition of land for two major new stores, one in Santo Domingo and one in Santiago. Lama reminded reporters that his stores had grown from the 1,000-square meter store at Plaza Central, to the 23,000-square meter store on Winston Churchill, with bigger and better designs ahead. In the works are plans for a new store on 35,000 square meters in the eastern part of Santo Domingo, and another one on 15,000 square meters on 27 of February Avenue in Santiago. The head of the Free Trade Zone Council (CNZFE), Jeannette Domínguez, says eight new factories are under construction in industrial sites around the country, representing an investment of RD$571 million and generating 2,383 potential new jobs. The new businesses range in everything from textiles to tugboats and will operate in Santiago, La Vega, Caucedo, Nigua, San Isidro, Sabana de la Mar and Hato Mayor. |
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Laura gets 7 years Puerto Rican TV personality Laura Hernández received a seven-year prison term and a fine of RD$50,000 for her part in the attempted smuggling of 70.4 kilos of cocaine into the Dominican Republic. Her husband Marcos Irizarry got 15 years, as did accomplices Piki Ortiz Batista, and Antonio Rodríguez Morales. Edwin Adams Cotto received a ten-year sentence and Arod Levi III, a seven-year sentence and a RD$50,000 peso fine. Two young women, Karla Michelle Morales and Heidee Madé Romero, received five-year sentences and RD$50,000 peso fines. The sentences were read by judge Raúl Corporán Chevalier and also ordered the confiscation of the yacht named Lady Liz, as well as other properties, however considerably less than the prosecutor had requested. Prosecutor Ismael Tavárez Martínez had petitioned for a 20-year jail term and a fine of one million pesos for Irizarry and a ten-year term for Laura. The prosecutor also hoped to get 20-year terms for Ortiz Batista, Adams Cotto and Rodríguez Morales. The requests for the other participants were correspondingly higher. |
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Cenantillas and Haitian immigration The Economic Research Center for the Antilles (Cenantillas) has recommended that the Dominican Republic find ways of lessening the impact of Haitian immigration. In a report that was given to the press, Cenantillas, as part of the PUCMM university, says that the poorly performing economy of Haiti is obliging its inhabitants to look for better conditions. Because of the geographic reality, among other factors, the Dominican Republic is one of the principle destinations of the Haitian exodus. The newsletter states that Haitians have made the DR their second largest foreign place of residence, after the United States, and such an inflow constitutes a major economic and social impact on the Dominican Republic. According to the most recent Centantillas newsletter, in spite of the superior economic development of the DR, the country cannot absorb a poor and unqualified population that will only increase the levels of poverty in the host country. On the other hand, the newsletter also points out that Haiti has become the second most important trading partner for the DR, after the United States. Cenantillas points out that in Dajabón alone there are 8,000 people involved in trans-border commerce, most of which is informal and not registered by Customs or Internal Revenue. |
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Pan Am torch’s journey to the DR The Boston Red Sox’s ace pitcher Pedro Martínez will carry the Pan American torch as it makes its way to Santo Domingo for the 14th Games scheduled to open in the Dominican capital on Friday, 1 August. The New York Yankees’ star second-baseman Alfonso Soriano will also carry the symbolic torch. The torch was lit in Mexico on Monday and will be displayed in various parts of the United States this week before making a stop in San Juan, Puerto Rico and then on to its final destination, Santo Domingo. Over 5,000 athletes from 42 countries in the Americas are expected for the Games. The torch was scheduled to reach Providence, RI at 9am today, with the accompanying committee to be received by Governor Don Cassieri at 4pm. At 5:30pm, the torch committee was scheduled to depart from the city hall and embark upon a passage through the streets of Providence to Royal Williams Park. On Thursday, 26 June, the Pan American Games flame is expected in Boston, MA at 9:30am where it will form part of a caravan to descend upon Fenway Park, home of the Boston Red Sox. At 1:05pm there will be a ceremony with Pedro Martínez on hand, just prior to the Red Sox’s game against the Detroit Tigers. At 4pm the flame will commence its journey anew and head for the state of Michigan, where it will be received by the mayor of Lynn, MI at 4:45pm, after having made its way through the streets of that city. On Friday, 27 June at 10:30am, the Pan American Torch will reach La Guardia Airport in New York City and visit various local NY sites. Next, on 28 June, the torch will be paraded through the streets of Manhattan, departing from the intersection of West 135th Street and Broadway. On 29 June the torch will visit the Tropical Music Festivals at Old? Orchard Beach, the South Street Seaport and the Latino Night festivities at the All New State Fair in Meadowlands, culminating in a ceremony that will include the participation of Alfonso Soriano, just prior to the 8pm game between the NY Yankees and the NY Mets at Yankee Stadium in the Bronx, which will be televised nationally on ESPN. On Monday, 30 June, the Pan American torch will be run through the streets of Miami, FL and its Dominican barrio called “Allapattah”, to Juan Pablo Duarte Park, where it will be welcomed by Mayor Manny Díaz and blessed by a local priest known as Father Alberto. At 7:05pm, the Florida Marlins will greet the lit torch just before taking on the Atlanta Braves. On Tuesday, 1 July at 11am the torch will run the streets and roads of Puerto Rican cities such as Bayamon, Vega Alta, Vega Baja, Manatí, Barceloneta, Arecibo, Hatillo, Camuy, Quebradillas, Isabela, Aguadilla, Aguada, Rincon, Anasco, Mayaguez, Hormigueros, San German, Sabana Grande, Yauco, Guayanilla, Ponce, Santa Isabela, Salinas, Guayama, Arroyo, Maunabo, Yabucoa, and Humacao. Scheduled for Thursday, 6 July is a popular festival celebration in San Juan. On Friday, 4 July, the torch will set sail for Santo Domingo aboard a Coast Guard warship and is scheduled to arrive in the Dominican Republic on Sunday, 6 July. |
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Felix Sánchez, archery, judo, boxing Outstanding track athlete Félix Sánchez won his IAAF event, the 400-meter hurdles, at Trikala, Greece yesterday, with a time of 48.07 seconds, thereby marking his best run of the year and causing a stir of excitement in anticipation of his performance in Santo Domingo in August. The archery installation will not cause a problem, according to the director of facilities for the Games, Rodolfo Guzmán. Guzmán said that the existing technical problems could be fixed in “three or four days”, and that he did not know why the president of the Archery Federation should be so worried. The judo pavilion is much improved after its remodeling, according to Jaime Casanova, the president of the Dominican Federation. Casanova says that spectator space has been increased nearly three times and that the allotted area for competition has increased by 50%. Boxing will have 19 countries competing for medals in the XIV Pan Am Games. Four countries will have full, 12-man rosters: United States, Cuba, the Dominican Republic and Brazil. The other countries will have smaller rosters, with Venezuela, Trinidad and Tobago, and the Bahamas having just one boxer each. |
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