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Politics all over again President Hipólito Mejía took to the streets of Santo Domingo yesterday to launch his campaign for re-election. He faced a tough audience, however, with even the Listín Diario, the newspaper currently under governmental intervention, saying that Mejía faced a barrage of pleas for lower food prices, fewer blackouts, reliable drinking water and more jobs, as he toured some of the poorest neighborhoods, including the barrio of La Ciénega. “Hunger, we are hungry!” and “Lower the [price of] milk!” cried the crowds, along with “There is no light, we are sick and tired of no lights!” At the old union hall of the now defunct CDE union Sitracode in Villa Juana, matters were more amicable and cries of “Four more!” could be heard among the PPH supporters gathered there for the presidential visit. President Mejía promised more apartments and said that since he had five more years “there was still a lot to do.” |
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Pacheco’s first day The Chamber of Deputies held its first working session without incident yesterday. Chaired by its new president Alfredo Pacheco (PRD-Santo Domingo) and attended by most members, including many of the PRSC deputies, the session labored normally throughout the day. The PRSC members defied the order of several party leaders, who are still rankled over the removal of Rafaela (Lila) Alburquerque from the Chamber of Deputies’ president’s chair. |
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Better bus service in Santo Domingo Of the 300 air-conditioned buses that were used to transport the athletes and officials of the XIV Pan American Games Santo Domingo 2003, 200 have been placed into service along the public routes of Santo Domingo. The fare is RD$10.00 for the air-conditioned service. Diógenes Castillo, the head of OMSA, made the announcement and said that the normal buses would continue to provide the regular service at the RD$5.00 fare. |
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Electoral Board judges: Keep it in-house Yesterday’s report that Judge Roberto Rosario was unhappy over staff appointments made during his absence and without a full court hearing received the backing of two more judges. However, the general tenor of the statements seemed to be that the Central Electoral Board (JCE) would be better served if the judges kept their complaints and opinions to themselves until they could be aired within the confines of the JCE, the government body responsible for organizing the upcoming May 2004 presidential election. For one, Nelson Gómez said, “There is no need to get desperate, the full court will decide, the full court is the appropriate setting to debate these things.” Apparently, with judges coming and going as part of the effort to register voters overseas, there has been some miscommunication within the Electoral Board. Today, Dr. Luis Arias arrives from Canada so that the full board will have a chance to meet. |
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An important item for drivers All of today’s press announces the closing of two lanes of the Duarte Bridge to all traffic and the prohibition of heavy trucks on the bridge at all times. Apparently the Conde Mouchel consulting team has found serious problems in the supports at both ends of the bridge, thus the need to lighten the load while corrective maintenance is carried out. The SEOPC ministry (Public Works) has asked the AMET traffic police to assist in the new restrictions. El Caribe points out that the structure’s refurbishments were part of the original works planned to be performed with the money from the first US$500-million sovereign bond issue, but the money never found its way to its ostensible designation. |
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Negative growth in economy José Lois Malkum said that the Dominican economy experienced a –2% slump during the second quarter of the year. The nation had previously seen a growth of 1.5% during the first quarter. Malkum said that only hard-currency generating sectors – tourism, free zone and exports – showed any growth during the second period. As reported in El Caribe, Malkum retains a bright outlook for the future. He told the newspaper that within five months the Dominican economy should show signs of recovery and growth, as per a forecast made by the International Monetary Fund technicians. Malkum continued to insist the DR is better off than most Latin American countries. “If we fulfill the agreement with the Fund and there are no other internal or foreign surprises, the economy should grow 1 or 2% next year, which would be extraordinary for an economy that was shaken by a problem [Baninter collapse] that cost 12-14% of the GDP.” Malkum also said that the depreciation of the peso has raised foreign debt commitments to RD$23 billion for this year, up from the RD$14 billion allotted in the 2003 National Budget. Once the government signs with the IMF, Malkum stated they would seek to restructure the US$2-billion foreign debt with the Club of Paris to reduce payments. Malkum feels that the real value of the peso should be no more than RD$28 to US$1. |
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New banking procedures Diario Libre reported that banks are now required to submit detailed reports to the Central Bank on the loans, deposits and credit card transactions of their clients. |
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Superintendent of Banks fires salvo Julio Cross, the Superintendent of Banks, told the press that the accumulated privat-sector debts are the cause of the devaluation of the peso. In no uncertain terms, Cross said that the “abusive” debt contracted by the private sector over the last five years has reached US$2.4 billion and of this amount more than US$1.2 billion is owed to offshore banks. He also pointed out that the private-sector debt is larger than that of the public-sector foreign debt, and that is what is pushing the dollar up in the exchange market. The private sector borrowed in dollars when interest rates on peso loans soared to unsustainable levels. Cross attributed the pressure on the dollar to the rapid economic growth the country experienced over the past decade and the sudden drop in exports. |
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Liberalizing the exchange market The Central Bank announced the continuance of its program to liberalize the foreign exchange market almost completely by January 2004, as reported in Diario Libre. The specifications set out that foreign long-distance communication dollars be allowed to enter the free market, while international credit card payments for accounts issued locally be handled in the free market. The Central Bank will no longer act as intermediary. Reportedly, payment for petroleum purchases would now become the responsibility of the free market. The Central Bank, nevertheless, would continue to be responsible for paying the foreign debt from its dollar revenues. Central Bank general manager Apolinar Veloz explained that all foreign exchange business transactions are passed on to the private sector, relieving the Central Bank of the pressure that was affecting its net reserves. Regardless of the announcement, Dominican exporters are not permitted access to the free market. When the Central Bank liberalized the market this year, exporters were authorized to transact their dollars on the free market. This was short-lived, lasting from 28 May to 18 June. Later, the measure was abolished and exporters were once again obliged to exchange at the many times slightly less attractive governmental rate. |
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More pesos for your dollar The market reacted with a decline in the peso to the news of changes in foreign exchange rulings as per decisions made yesterday and announced by the Central Bank. According to most of the exchange houses, the dollar rose by 62 cents in relation to the Dominican peso. So far this week the dollar has risen by 82 cents total. The peso was trading at RD$33.25, a fact that Diario Libre attributes to a surge in demand caused by scarcity that has pushed the rate upwards. The peso had appreciated during the duration of the Pan Am Games. |
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Electricity news items The Dominican Corporation of State Electrical companies (CDEEE) has placed an embargo on the accounts of AES Ede-Este, claiming a debt of several million pesos but, apparently, no one is sure of exactly how much is owed. Roberto Duvergé, head of the “Program to Reduce Blackouts”, told reporters from the Listín Diario that the debt amounted to RD$1.3 billion but that RD$700 million had been capitalized. Non-payment of the remainder forced the embargo, according to Duvergé. These figures are in sharp contrast to those offered by an official of Ede-Este, who said that the debt was RD$40 million. According to Bredyg Disla, the journalist covering the story for the Listín Diario, the devaluation of the Dominican peso produced a RD$3-billion shortfall for the EDES (electricity distributor companies) between October 2002 and the present date. Antonio Pantoja, the vice-president of the Ede-Norte and Ede-Sur, told the paper he felt that President Mejía’s top priority was to resolve the crisis affecting the distributors. According to Mario Méndez, the economic editor for Hoy, Pantoja has proposed a temporary solution for the sector, which entails a reduction of the base price for electricity. Pantoja revealed that the distributors are paying US$83 per megawatt hour, and he recommended that the electricity producers lower their price to between US$55 and US$60 per megawatt hour as a solution. This would allow the distributors to keep up with payments and relieve some of the pressure on the peso exchange rate. After a period of time the distortion between the existing contracts and the temporary base prices could be worked out at the bargaining table. |
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More free zone jobs The Listín Diario reports that over 10,000 new jobs were created in 61 new industries installed in the industrial free zones of the Dominican Republic over the past eight months, according to statistics released by the National Council for Export Free Zones. The total investment is quantified at RD$1.34 billion, and the industries are expected to generate over US$36 million in hard currency. Twenty-seven of the new factories are apparel manufacturers. |
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More bread for your bread Following heated discussions with the Minister of Industry and Commerce, the Union of Small and Medium Bakeries (UMPIH) agreed to a RD$0.50 price hike on bread as of next Monday. Pedro Grullón, the union head, said the bakers had requested a RD$1.00 increase to put the price of a loaf at RD$3, but Industry and Commerce Minister Sonia Guzmán asked for a 15-day hold on any rises. Guzmán argued that the signing of the agreement with the IMF would bring a reduction in baking costs. |
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Travel to Punta Cana up El Caribe reports that tourism in Punta Canta for the first seven months of the year is up 21%, when compared to the same period last year. Visitors numbered 294,837 more than the arrivals of last year. Fashionable Punta Cana is leading the pack of Dominican tourist destinations, recording a total number of visitors of 786,000 so far this year. |
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Overseas Dominicans seen as blessing The vitality of the Dominican community in New York City and the importance of this outpost as one of the major ethnic groups in New York were praised by Ray Daniels, a high-ranking official in the New York State government. Quite simply, Daniels called the Dominican presence in New York “a blessing.” The size of the Dominican community in New York is such that within a few years it could become the dominant Latino community. According to Daniels, there is even the possibility of seeing a Dominican mayor in Gracie Mansion. Daniels pointed out that the Dominican-New York trade relations reached US$280 million last year in remittances, a product of the achievements and commerce of the Dominican community. Daniels, as Secretary of State for the State of New York and vice-president of the State University of New York (SUNY), seeks to increase trade relations between both countries and, as an educator, has plans to offer scholarships to students from the Dominican Republic to study in the SUNY system. |
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