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5% tax on exports sent to Senate President Hipólito Mejía sent to Congress yesterday the controversial bill that seeks to legalize the 5% charge on exports. The application of the charge was ordered in Decree 646-03 but has been rejected by the business sector in general. The bill is expected to pass in the Senate where all but three senators represent the ruling party. In the Chamber of Deputies, some resistance to its passing may be met, given the fact that the PRSC party deputies may now not be so receptive to the requests from the Presidency, after Rafaela Alburquerque (PRSC-San Pedro de Macorís) was not reelected by the PRD majority and financial irregularities under her administration have been leaked to the press. |
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IMF arrangement approved The International Monetary Fund reports on the US$600 million Stand By Arrangement signed with the Dominican Republic last week. The government expects to receive this week US$120 million under the arrangement. In a press release on the agreement, explains the assistance was granted following the doubling of the debt-to-GDP ratio, the collapse of governmental banking supervision and the deterioration in public finances under the present administration. The Fund press release indicates that by the end of this year full unification of the dual exchange markets should be in place. "The Dominican Republic's tradition of sound fiscal policies and low public debt needs to be restored,” states the release from the IMF. Banking interest rates are expected to keep high as the Fund points out that “monetary restraint will help contain pressures on the currency and inflation.” See http://www.imf.org/external/np/sec/pr/2003/pr03147.htm |
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Government gets away with it all Economist Frederic Emam Zade writes in his Saturday column in the El Caribe newspaper that the government outsmarted the business community with the signing of the IMF agreement. Emam Zade explains that the business sector favored the signing of the IMF agreement so as to oblige the government to control its spending. In a parody of what was going on behind scenes, Emam Zade writes that the government ministers applied a jujitsu technique to the business sector and instead of resisting the pressure to sign with the IMF, used it against the sector in favor of the government. He explained that the government knew it would be its own ministers that would be doing the negotiating and could keep confidential what would be required of the business and population in general. The parody also explained the government resorted to the divide-and-conquer sector, promising some business segments benefits, and saying that the IMF demanded a 14% increase in taxes, not 5%, so as to appear as the saviors when only levying the 5% tax. Furthermore, the strategy would be to spread the word that if the 5% on exports were not levied, then the power bill would have to be increased, thus the business sector would be the bad guys. The parody ends with the statement: “I can imagine that now many of those who pressured us to negotiate with the IMF are sorry. The businessmen wanted to discipline the government and now they have been punished with more taxes and silenced. They wanted to put a straightjacket on the government, and they ended up with their own belt tightened. And they even helped us to get US$1.2 billion loan just right before the opening of the electoral campaign!” |
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Election will cost RD$1.4 billion The Central Electoral Board announced yesterday that the next election scheduled for May of 2004 will cost RD$1.4 billion pesos. This is the JCE budget alone, and does not include the funds given to the political parties by the Electoral Law, or the funds the political parties will raise on their own. At the same time, Nelson Gómez, the president of the Administrative Chamber of the board, said that the timetable for the election was going according to plan. The budget included RD$550 million pesos for normal operational expenses, RD$327 million for organizing the elections, RD$90 million for the computer system and RD$120 million for advertising. Gómez also told reporters that Santiago Murray of the Organization of American States Unit for the Promotion of Democracy will lead a small delegation of electoral judges that will meet with the political parties. One of the points on the agenda will be to request the party’s approval for a test run of electronic voting. |
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School starts for 2.7 million kids Today is the first day of school for 2.7 million children and youths throughout the Dominican Republic. Some 1,251,333 students were registered in the first to eighth grade. This year school starts amidst complaints of high prices for school supplies and books and a lack of classrooms. In the private sector, some schools have raised tuition and fees by as much as 50%. Hoy reports that the Dominican Teachers Association (ADP) says that many students will not be enrolled because of a lack of space. According to Eduardo Cuello, president of the ADP, today’s school is not so well equipped to house thousands of children, and “thousands and thousands of children are going to go without classrooms.” According to the report, “Indicadores Educativos Básicos 2002-2003” published by the Ministry of Education, there are 13,134 schools offering elementary and high school education. Of these, 11,005 are public schools and 1,916 private schools, and 213 fall in the quasi-public school category. Of the total, the schools are located 62% in rural areas (8,151) and 38% in urban centers (4,983). |
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Next week’s summit meeting The Listín Diario reports that the national summit meeting called by Monsignor Agripino Nuñez Collado, rector of the PUCMM, will include members of the World Bank, the Inter American Development Bank and the International Monetary Fund, as well as a broad spectrum of the nation’s business, financial and political leaders headed by President Mejía. Mejía told reporters that the talks would focus on the need to complete many construction projects and how to get financing for these projects. Mejía said that Sergio Grullon, his brother-in-law who is the Secretary of the Presidency, will represent the government. Former President Leonel Fernández and presidential candidate for the PRSC Eduardo Estrella have been invited to attend the talks set to start Monday, 8 September. |
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Starting today, new license plates There will be 675 places to obtain the new license plates from today onwards. In order to obtain the new plates, the original vehicle registration and a copy must be presented along with a copy of the personal identity card called the “cédula”. The fees have to be paid in cash or in a certified check. For information on where to go to obtain the new license plates, call 689-2181 x 3312 in Santo Domingo and 1-200 6160, toll-free, from the interior of the country. |
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Ready, aim… The weekend’s papers cover former President Leonel Fernández (1996-2000) on the campaign trail for the PLD. Fernández lambasted the ruling PRD party’s “disastrous” rule, criticizing what he called “unbridled ambition to exercise power” that is proposing the re-election of President Mejía. Fernández’ also criticized the approval of the judges of the Chamber of Accounts and the Central Electoral Board. According to Hoy and the Listín Diario, Leonel Fernández accused the poor track record of the ruling PRD party as being responsible for the pessimism that is affecting the nation. According to the Listín Diario, Fernández accused the PRD of doing little for the country in spite of expenditures of over RD$200 billion pesos during the past three years, a sum that was RD$40 billion pesos more that the PLD spent during their four years in power. Ex-President Fernández pointed to schools, hospitals and highways that are still not completed, despite having been nearly finished by his government. The increase in taxes was another sore point that the former chief executive emphasized as a negative in his speech. |
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Mejía on the attack President Hipólito Mejía said that his participation in the upcoming elections is the “determining factor” that will decide the PRD victory. The President, as a candidate, warned his adversaries that they had better behave according to the statutes of the PRD party and the Constitution of the Dominican Republic. He demanded that the PRD celebrate a convention to choose his candidacy, and disqualified his opponents, especially the party president, Hatuey De Camps. Speaking through the eastern region of the country, in La Romana and El Seibo, Mejía enjoyed what the papers called “support” and he saw plenty of hand-made signs that called for a convention and “four more years.” Courting both the female and youth vote, Mejía said that he and the PPH is the largest group within the PRD and that they have more power than all the other candidates combined. The candidate used his characteristic language sending a “big kiss on the lips to all the women.” |
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Milagros fires a salvo Milagros Ortiz Bosch, also a pre-candidate for the PRD nomination, fired off a salvo herself on Sunday. According to the report in the El Caribe, she said that both Mejía and Leonel Fernández were incompetent to rule the country. In her surprising press release, the Vice-President slash candidate, said that neither Leonel nor Hipólito Mejía were able to renovate the Dominican society and neither showed any capacity to understand today’s society. She said that neither one can govern for another four years because they are not in harmony with the aspirations and expectations of the Dominican people. Ortiz Bosch made her statement to refute the claim by Leonel Fernández that the PRD government was characterized by vulgarity and brutish behavior. |
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Lots of dollars indicate down market According to El Caribe, the abundance of dollars this week will be one of the factors that will continue the 6% decline in the exchange rate seen last week. Augusto Peignand, president of the Association of Exchange Agents says that various factors should see the dollar in the RD$28.00 to RD$30.00 range in the coming weeks. According to Peignand, the signing of the IMF agreement, the sale of the Banco Mercantil, the first release of IMF funds and the upcoming meeting of the nation’s leadership called by Monsignor Agripino Nuñez Collado has helped to restore confidence within the business community. Two more aspects that, according to the president of Adocambio, will help lower the exchange rate are the decision by President Mejía to send the much discussed 5% tax on exports to Congress for approval and the measures being taken within the Central Electoral Board to resolve the crisis created by irregular assignation of jobs within the board. |
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Ege-Haina blames Ede-Norte for problems Ege-Haina, which has several large plants supplying the north of the Dominican Republic, has asked the Superintendent of Power to suspend the contract between Ege-Haina and the distributor Ede-Norte. According to the complaint made by Ege-Haina, the non-payment of energy consumed during the past several months has reached a total of US$25 million dollars, and is, by far, the largest debtor on the Ege-Haina books. In their financial report to the Coordinator’s Office within the Superintendent of Power, Ege-Haina shows that the three distributors, Ede-Sur, Ede-Este and Ede-Norte, owe them US$53.8 million dollars. According to the Ege-Haina document, the generator accuses Unión Fenosa (owner of affiliates Ede-Sur and Ede-Norte) of a policy of abandonment of Ede-Norte while trying to save Ede-Sur. Because of the outstanding debts, according to the statement from Ege-Haina, the generation at their facility has dropped from 280 megawatts to 151.3 megawatts because they are not able to purchase fuel in a timely fashion. Ege-Haina is requesting a temporary suspension of the contract, until Ede-Norte can make the necessary payments. Ede-Norte denied having the debts in a recent communiqué in local press. |
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Bernardo Vega and the “Room Next Door” Economist Bernardo Vega, a former Dominican ambassador to the United States, points out that the Dominican negotiating team is a little late to the table. He points out in his editorial in today’s El Caribe, that the teams from Mexico and Chile used a team of business people in “a room next door” to the negotiating table, and benefited greatly from their feedback and contributions. Regarding the free trade talks with the United States, Vega is obviously worried about the chances for the Dominican team to obtain concessions. In the first place, Vega says that the Dominican Republic is starting to negotiate after the talks with Central America have concluded and with only three months leeway to their conclusion. And, he says, to top it all off we are negotiating during an electoral process. One of the problems will be that the United States cannot give the Dominican Republic any concessions that were not already contemplated for Central America and this can seriously affect Dominican exports of apparel and sugar to the North American market. Vega also mentions problems with exports of rice, beans, milk, hogs and poultry, which are important to the Central American republics. In perhaps the most important point, Vega says that the average U.S. duty is only 5% and that only 18% of Dominican exports are taxed at all. As a result, our most important export problems are the apparel and sugar quotas, the roadblock to four Dominican products in Puerto Rico, the phytosanitary requirements and different state requirements for avocados and citric products. Totally free imports would be a death notice for Dominican producers, according to Vega. One of the last points made by this well know economist is that the Dominican Republic, as a beneficiary of the Cotonou Accords, is obliged (but not Central America) to give Europe all the concessions that are given to the United States. For example, Chile eliminated import taxes and internal taxes on US manufactured autos. This would mean that both European and American cars would be coming into the Dominican Republic duty-free. Vega calls the reduction in customs duties “brutal”. |
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Fabian not a threat so far Civil Defense chief Rhadamés Lora Salcedo warned of flooding in low laying areas around Padre Las Casas and surrounding areas as a result of the tropical waves that have been affecting the island. Hoy warned of floods and high water in several of the dam sites, especially Valdesia, Hatillo and Río Blanco as the waters are above normal limits. Furthermore, he told reporters that the Civil Defense was following Hurricane Fabian very closely since September has been historically the most dangerous month for hurricanes affecting the Dominican Republic. El Caribe reports that September is the month that has brought the worst hurricanes to the country, namely: George (Cat. 3) 1998, David (Cat. 5) 1979, Inés (Cat. 4) 1966. San Zenón (Cat 4) 1930. Weather forecasters expect Fabian, the sixth hurricane in the Atlantic Region this year, to take a northerly track and avoid the Caribbean all together. According to Dominican meteorological authorities quoted in today’s Hoy, the storm does not represent an immediate threat to the Dominican Republic. The US Weather Service says that a trough currently over western Canada is predicted to move east-southeastward and amplify over the eastern United States over the next several days. This is expected to break down the west side of the ridge to the north of Fabian causing it to take a more northward heading. See http://www.nhc.noaa.gov/ftp/graphics/AT10/refresh/AL1003W+GIF/011453W.gif |
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Best performance in athletics world games The Dominican Republic had a record performance in the 9th World Championships in Athletics that took place in Paris. Felix Sánchez won the 400 meters hurdles with a best time for the event in 2003 of 47.25. And Juana Arrendel placed 8th among the best in the world with a time of 1.95. Only four women did better than her mark of 1.95. Both Sánchez and Arrendel had won gold in the Pan Am Games held in Santo Domingo in August. http://www.iaaf.org/ |
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