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Mejía’s complaints about unilateral free trade Reflecting the tone of much of today’s news, President Mejía told the press that unfair trade practices create more poverty and affect the governance of the less privileged Caribbean nations. President Mejía said that the nations of Central America and the Caribbean are forced to sell their products are ever-lower prices, while paying higher and higher prices for goods and services from their wealthier counterparts. The head of state also complained that there were discriminatory policies, whether by reason of quotas or technical issues, that violate the World Commerce Organization. Speaking at the XII Meeting of Political Parties from Central American and the Dominican Republic, Mejía suggested that the Central American and Dominican Presidents’ Summit be formalized and that a Council of Ministers be created. He also suggested a series of measures designed to integrate the Dominican Republic and Central America. |
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Candidates cry foul Both the Diario Libre and the Listín Diario say that the PRD leaders and aspiring candidates to the PRD presidential nomination were taken aback by President Mejía’s vision of how the candidate should be selected, as publicized in his proposal. They say that President Mejía never alluded to a “second round of voting” when he met with them. According to the group’s spokesman, Enmanuel Esquea Guerrero, President Mejía only said that if he did not obtain 50% of the votes at the convention, he would “go home.” Rafael Suberví Bonilla, Tourism Minister and one of the pre-candidates, echoed Esquea’s statement as he told reporters he had heard “nothing about a second round (of voting).” In his press statement, Esquea Guerrero made no mention of a supposed proposal to hand out government posts to the aspiring candidates if they stepped down. Esquea acted as host at the latest meeting of the presidential hopefuls, at which he said the proposal was neither rejected nor accepted, but that it was being considered. The president of the PRD, Hatuey De Camps, did not attend the meeting, as he is currently travelling abroad. |
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Senators request urgent action against violence The president of the Senate, Jesús Vásquez, along with other senators, called the latest incidents of armed violence “assassination attempts” and demanded serious efforts to stem the aggression. Vásquez considered the various recent shootings to be isolated events and not part of any conspiracy. He expressed a plea for the authorities to put an end to the string of violent attacks. During the month of August, Sucre Muñoz, the senator for Barahona, was shot at, Captain Bencosme Candelier was ambushed and killed in Santiago, and yesterday morning a sergeant was shot and killed and a general wounded in front of his home in Santo Domingo. Various senators were of the opinion that these incidents could harm the tourist industry and create anxiety within the business community. According to the reporters from El Caribe, the recent series of events may even effect on the upcoming elections. |
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Electricity distributor favors talks Two articles, one in El Caribe and another in Hoy, indicate that the electrical problem will be at the forefront of President Mejía’s visit to Spain. El Caribe says that Ede-Este favors new talks on the contracts that many feel are too generous to the distributors and energy providers. The proposal for a second round of talks to rectify the current situation, which could include vertical integration, has been made by leading executives of the Unión Fenosa during a recent visit. However, for the changes to come about, including the necessary changes to the contracts, several laws would have to be amended, including the General Law on Electricity, and the government enterprise capitalization law. Mark Tracey, the new head of the Itabo generating facility, rejected any form of government intervention, saying that it would not resolve any of the current problems. Mario Méndez, the economic editor for Hoy, writes that the 13 September visit of President Mejía to Spain could be of great importance to finding a solution to the financial crisis affecting the sector. According to his sources, the problems of the electricity distributors will be a central theme of meetings to be held with the chief executives of Unión Fenosa and Spanish Prime Minister José María Aznar. There is skepticism regarding this visit, too. As a presidential candidate, Mejía had promised to revise the privatization contracts, including that of the Spanish distributor, signed during the Fernández administration. Despite Unión Fenosa having been an insider, brought in by the late Balaguer to administratively counsel the Dominican Electricity Corporation (CDE), the company was allowed to bid in the privatization process. Mejía had promised to change things in favor of the consumer. But once he traveled to Spain, these promises were soon after abandoned and negotiations again bent in favor of the private companies. Moreover, the Madrid Accord, negotiated in that Spanish city during the present administration is regarded as having accommodated even more the private companies in detriment of consumers. According to these sources, the problems of Ede-Norte and Ede-Este will be broached from a contractual standpoint, stemming from the letter written by the CDEEE to the IADB, as well as in direct private talks with Unión Fenosa executives and on a political level during talks with Aznar. These conversations are considered to be central points of the announced trip. |
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AIRD warns of risks The Industrial Association of the Dominican Republic (AIRD) warned that a free trade agreement (FTA) with the United States carries certain risks due to the “accelerated talks and weak conditions” of the Dominican industry. Lisandro Macarrulla, president of the organization, told reporters from Hoy and the Listín Diario that the absence of strategies and global and sectoral impact studies are among the factors that could have weighty repercussions for the DR’s industrial sector. The AIRD press release also says that the weak local economy and lack of a clearly defined foreign policy represents a clear disadvantage. “In a process such as this, the participation of the private sector is essential,” says the statement. The AIRD feels that the negotiators should be well informed about each sector of the local economy to be opened to free trade, and should guard their interests as best they can. “The fact is that many countries open their borders without knowing if the United States is going to open theirs. Because of this, the local industries should make sure that the time period for removing tariffs should be as realistic as possible,” said Macarulla. |
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Infadom protests US pressures In a related story carried in the Listín Diario, Infadom, the pharmaceutical manufacturers’ association, says that a free trade agreement with the United States puts them at risk. Ostensibly, the manufacture of pharmaceuticals is protected by Law 20-00, but the law has not been put into effect because of pressures from the United States. Infadom also complains that the current visit of the negotiating team marks the fifth time the team has carried out talks on a possible FTA – without once consulting the local pharmaceutical industry. Bloomberg news service reports that the US is imposing new conditions on poorer countries before Washington allows them to produce generic drugs to fight AIDS, malaria and other illnesses. This information comes from several international aid agencies, including the well-reputed Oxfam organization. The US was the only country to oppose an agreement to supply essential medicines to poor countries. Washington says that overseas pharmaceutical companies could pass over the medical patents held by companies like Pfizer and Merck for products that treat obesity and baldness, as well as those products that treat the major diseases affecting humankind today. Médecins sans Frontières and Third World Network have joined in the complaint. The Coctelera column in today’s Hoy newspaper also echoes Infadom’s point of view. |
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Hoteliers reaffirm non-payment of 5% charge Johnny Bernal, president of the National Hotel & Restaurant Association (Asonahores), warned that the hoteliers will remain firm in their decision not to pay the 5% tax being levied on their services. Bernal gave his statement after President Mejía told his television audience that he would use all mechanisms at his disposal to enforce collection of the new tax. Bernal expressed his hope that the President would not use “drastic and extreme” measures, but instead allow the dialogue to continue. When reporters on the program “Una Vez a la Semana”, broadcast on the state-run Channel 4, asked if there had been any sort of accord between the government and the business community with regards to the 5% tax, Mejía said that he was happy to see CONEP express its desire to reach a cordial agreement, but that he had made it quite clear he would not abandon his decision to collect the charge. Bernal told reporters that his people are persisting in their conversations with the government’s economic team. Asonahores’ leadership has asked its members to refrain from paying the 5% surtax on their services until the Supreme Court rules on the legality of the decree. |
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Exports are up 8% but dollar also up The Diario Libre reports that exports for the first half of the year are up by 8% over 2002, going from US$1.79 billion to US$1.93 billion, according to data from the Center for Exports and Investments (CEI-RD). The hard numbers illustrate a 7.74% increase over 2002, boosted by a 9.06% increase in exports from the free zones, to represent 76% of all total exports. National exports grew by nearly 4%, with an impressive jump for the mineral sector, which shipped US$23 million more this year than last. Traditional exports, led by sugar, coffee, cacao and tobacco, grew by 5.65%. The United States, Puerto Rico, Haiti and South Korea are the main markets, receiving 69% of all exports and 96% of the exports from the duty-free zones. The dollar has continued to gain over the peso, with yesterday’s sales showing the dollar being quoted at RD$35.30, up from RD$32.70 two weeks ago. The visible scarcity of last week was reaffirmed in yesterday’s market and there was difficulty in securing purchases for more that US$2,000 at a time. |
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New issuance of savings certificates The Central Bank has placed ads in all of today’s press to announce the second auction of savings certificates, valuing RD$3 billion in certificates, to be auctioned off to those investors offering the best interest rates. Last week some RD$200 million in certificates were also sold at auction. |
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EIU says politics is key issue The Economist Intelligence Unit conditions a modest recovery in the local economy in 2004 on the government’s ability to restore confidence in its management of the nation. In a Country Outlook published on 22 August, the British journal forecasts a possible contraction of the economy by 2.8% in 2003, as inflation (estimated at 32.2% for 2003) erodes real purchasing power, and high interest rates and a loss of confidence curbs investment. The publication mentions that the unemployment rate, currently at 16.1%, is at its highest level since 1996, mentioning also that the combination of rising prices and more frequent power outages have provoked renewed public protests. EIU forecasts “a return to positive growth on the assumption that the government takes the necessary action to restore confidence, helping to stabilize the foreign-exchange market and bring down interest rates” in 2004. It does not hold much optimism, however, that this will happen in an electoral year. “Given the risks of policy slippage in an election year, confidence may remain weak, which could lead to another year of negative growth or stagnation.” In its comments on the effect of the May 2004 presidential election on legislative decisions, the EIU states that the administration has put off responding to the appeals of the business community, which has called for an immediate overhaul of the tax system, until after the election. In the interim, it has introduced emergency taxes to close the fiscal gap. EIU says that the high-yielding certificates the Central Bank has issued to absorb liquidity and mitigate pressures on the peso due to massive advances made to collapsed banks could in turn generate a quasi-fiscal loss of RD$8 billion, or approximately 1.5% of GDP in 2003. Regarding the external sector, the EIU states that the present surplus in the current account could continue, aided by the recovery in tourism, free zone exports and continued strong remittances. Also boosting the surplus is the decline in imports, which reflects the depressed demand and higher cost of goods from abroad, due to the depreciation of the peso. Moreover, EIU states that capital flight is likely to continue until economic policymaking improves and confidence in the financial system is restored. |
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Dominicans prepare to view Mars The sancocho and the cocido have been ordered as friends prepare to view the spectacle of Mars coming closer to Earth than it has in 60,000 years. On 27 August, Mars is set to rise at about 9pm low in the southeast, will be visible in the southern sky at around midnight and low in the southwest sky before dawn. At 10:51pm, Mars will be a distance of 55.7 million km away, its closest proximity to Earth since the age of the caveman, or 57,617 BC. Of course, the view will depend on the weather clearing. Today Santo Domingo is overcast, as a tropical wave moves west, but the forecast is for clearer skies in time for the Mars viewing. |
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