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Calderón: We are going to get our money Finance Minister Rafael Calderón announced yesterday that the government is standing firm on its decision to collect the 5% tax on exports and the 12% ITBIS tax on “real” income of all businesses. Calderón was referring to news that was carried in yesterday’s press, whereby Johnny Bernal, the head of the Asonahores hotel association, urged members not to pay the new tax until the Supreme Court had rendered a judgement on its constitutionality. Calderón, in statements to Hoy, said that he also rejected the opinion of the Intelligence Unit of the British magazine The Economist, on the lack of confidence in the government of President Mejía. Calderón, often the object of political satire, continued his statements by saying, “The government is going to collect [the taxes] because it has a responsibility to collect. This is a responsibility of the government, no matter who it hurts or who opposes the tax. The government must fulfill its responsibilities.” | |||
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IADB warns Jáquez The Inter American Development Bank (IADB) warned Eligio Jáquez, the head of the PPH presidential re-election team, that the US$100-million IADB loan was to be used to re-establish macro-economic stability and not for re-election purposes. According to the Diario Libre, Hugo Pirela, the IADB representative in the Dominican Republic, put to rest the statements made by Jáquez that said the money would be used for social works and directed by the PPH re-election team. Even President Mejía had to come out and say there was no way that the money could be used for anything other than its designated purpose. Budget Director Luis Pérez Cuevas told reporters that the money had already been placed in this year’s budget and that at no time had it be assigned a political use. | |||
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Unión Fenosa sales offer Unión Fenosa announced yesterday that it was willing to hand over Ede-Norte and Ede-Sur to the government, but the government would have to take on debts and obligations of US$550.8 million. Ede-Norte has outstanding obligations of US$178.9 million and Ede-Sur has US$371.9 million in obligations. If the deal were to go through, the administration of the distributors would become the responsibility of the CDEEE. The proposal also includes the creation of a completely separate entity to handle the commercialization of energy, and therefore to better the image of the power distributors. Unión Fenosa is an equal partner of the Dominican government in the management of the various distributors. El Caribe views the new proposal as an alternative to intervention by the IADB. The proposal also includes a three-year option to purchase the shares held by the Unión Fenosa. | |||
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IADB requests clarification Central articles in today’s economic press report on the Inter American Development Bank (IADB) and its request that the Superintendent of Power clarify allegations contained in the letter sent on 8 August. The Superintendent had requested that the IADB, as guarantor of the loans made to the Unión Fenosa, intervene in Ede-Norte and Ede-Sur because the distributors had not fulfilled their obligations. In search of specifics, the IADB letter to Superintendent George Reinoso requests clarification on exactly which parts of the contract were not being fulfilled by the distributors, in order to justify an IADB intervention. A second letter, sent to CDEEE general manager César Sánchez, requested further details on the contract referred to in his letter of 8 August. The IADB also asks that Sánchez be more specific as to the failures of the distributors and which measures the IADB needs to approve before their implementation by the CDEEE. In their letter the IADB says they “do not feel that the failures of Ede-Sur and Ede-Norte that you are notifying us about in your letter, with regard to their respective failures to guarantee quality and continuity of service, constitute a monetary failure to fulfill requirements, and the IADB would count on a 90-day period to rectify such faults.” According to the economic section of HOY, this exchange of letters is merely holding up the process initiated by the government with respect to the distributors. According to Mario Méndez, the economic editor of Hoy, the letters also show that the IADB would treat each of the distributors as separate entities. | |||
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AIRD wants new players on team The Industrial Association of the Dominican Republic (AIRD) is asking the government to place new players on the negotiating team that is working on the Free Trade Agreement with the United States. Lisandro Macarrulla, AIRD’s president, has suggested that prominent figures like Bernardo Vega, Federico Cuello and Frederic Emam Zade participate in the negotiations. Macarrulla told the press that the government should set politics aside and appoint the best people to the negotiating team, especially since 80% of Dominican trade is carried out with the United States. The industrial leader told Fausto Rosario Adames of El Caribe that AIRD has no information on who would do the negotiating; whether it would be a team from the Foreign Ministry or from the Industry and Commerce Ministry. Macarrulla warned that after his association participated in several rounds of talks related to the Central American Free Trade Agreement, they realized that the negotiators from the United States were very hard bargainers and quite aggressive. | |||
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Dean of economists questions globalization Father José Luis Alemán, S.J., the dean of local economists, told his audience at the Conference of Political Parties of Central America and the Dominican Republic that globalization creates unemployment. He proposed the creation of new jobs. According to Alemán, “The most important effect of globalization, both in the countries that are net exporters of direct investments, as well as the receivers of the investment, is the higher unemployment and lower salaries for the untrained workers.” He went on to say that the only thing that happens when there is foreign investment is that the product is produced with cheaper labor. Unfulfilled promises of prosperity will create unrest and discontent among the population, he said. According to the economist from the PUCMM, in poor countries there is a tendency whereby many people, even those well trained, are skeptic about their possibilities of ascending the socio-economic ladder, and they turn to politics as their instrument of choice for obtaining social and economic wealth. | |||
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Police catch killers, two dead The Listín Diario reports that less than 48 hours after a group of men attacked and killed a police sergeant, the chauffeur of a general, the four alleged assailants were located in the Barrio Lindo section of La Herradura, just to south of Santiago de los Caballeros. According to neighbors, the four young men had only been living in the modest house where they were found for four days. The police surrounded the house and two of the men died in the shooting that followed and one police lieutenant was wounded. One man is now in custody and police are looking for a fourth individual. The weapons purportedly used in the attack, which belonged to the deceased Sergeant Rolando Feliciano Castro, were recovered in the house in Barrio Lindo, according to police sources. The assistant district attorney who accompanied the police in the search would not answer any questions beyond the fact that the dead had been linked to the attack that left the sergeant dead and the general injured. The gang of four confiscated the sergeant’s submachine gun and pistol, killed him, and then wounded his boss in the leg. | |||
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Latest tropical wave caused harm The latest tropical wave left at least one person dead and several hundreds of houses flooded, according to El Caribe. The torrential rainfall caused havoc along the Maimón, Yuna and Nigua rivers. At the confluence of the Maimón and Yuna rivers, a small group of men and boys were huddled on a tiny island, hoping that the river would not wash it away. Civil Defence authorities said they were not able to rescue the stranded group and that they would probably have to spend the night on the tiny piece of land. According to the CD officials, air force helicopters are not equipped for this type of night-time rescue work. Vice Admiral Radhamés Lora Salcedo told El Caribe reporters that at 10pm yesterday all rescue efforts were halted for the night and that at as soon as day broke this morning these efforts would continue. Meanwhile, in Nagua on the Northeast Coast, dozens of buildings were flooded and at least 42 communities were isolated by the flood waters of at least ten rivers. Drinking water for the town was also affected when the Boba River overflowed its banks. In the south near San Cristobal, flood waters tore down part of the highway between Los Cacaos and Cambita Garabitos. The Nigua and Yubazo rivers left 20 families without shelter, flooding areas in Haina and Básima. | |||
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