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Big meeting today Monsignor Agripino Núñez Collado, rector of the Pontifical Catholic University Madre y Maestra (PUCMM), told reporters in Santiago that everything was ready for the national summit at the school’s campus in Santo Domingo, to which the major players on the national political, economic and social sectors have been invited. President Hipólito Mejía will be there today, as well as the key leaders of the political parties. Also in attendance will be the heads of both bodies of Congress, the Supreme Court Chief Justice, the head of the Dominican Council of Bishops, and business leaders. Bishop Timothy Broglio, the Papal Nuncio, is scheduled to give the invocation. Guests from abroad include Jaime Montalvo, the president of the Economic and Social Development Council of Spain, and representatives of the international financial community and their respective ambassadors. According to Monsignor Núñez, the main goal of today’s meeting will be to propose solutions to the principal problems that affect the nation’s needy and to stimulate productive activities. A focal point of today’s summit meeting will be the signing of a document that will bind the signatories to the solutions presented for the most pressing of the nation’s problems. The document asks that the participants of the conference join forces to solve the most basic social, economical and political problems. |
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Mejía proposes party unity but seven say no President Hipólito Mejía reaffirmed yesterday his desire for party unity and requested that the members of the mediating commission, headed by former President Salvador Jorge Blanco, put into practice whatever is needed to pull the party back together. Meanwhile, the Listín Diario obtained a document titled the “Strategic Pact”, of which the seven potential candidates are signatories, that reveals that none of the seven will support nor directly or indirectly participate in Mejía’s re-nomination Mejía in the upcoming plebiscite. President Mejía told a large crowd that if he wins the nomination all PRD members will be expected to play a role in his re-election efforts. The seven members of the Strategic Pact have said that if Mejía is nominated, none of them would accept any participation on the ticket. Eligio Jáquez, spokesman for the PPH faction of the PRD seeking the re-election of President Hipólito Mejía, last Friday had described the announcement that the aspiring pre-candidates of the PRD would organize a plebiscite to determine the popularity rating of all PRD hopefuls as “a volley shot”. Jáquez told Hoy that the convention to choose the candidate would take place before November. “I would like you to tell me, when the orders come for the plebiscite to be held, who will implement them?” said Jáquez. Jáquez also said that 39% of PRD members checked the “none of the above” category in the May, June and July polls, when asked who should become the PRD candidate in the May 2004 election. |
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One party almost back together The PRSC (Social Christian Reformist Party) mended one of its largest political disputes yesterday when José Enrique Sued, the Mayor of Santiago, and Marino Collante, reformist deputy for Santiago, cast their lot with Eduardo Estrella, the PRSC’ s official candidate for the 2004 elections. Formerly, both Sued and Collante had backed former Vice-President Jacinto Peynado for the candidacy. The new allies appeared at a large political rally held in San José de las Matas and promised to bring a large block of voters to the Estrella ticket. Estrella, a former Minister of Public Works under President Balaguer, thanked both Sued and Collante for their unconditional support and referred to them as “two of the party’s leading politicians.” |
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Central Bank to auction dollars The Central Bank of the Dominican Republic will auction off US$25 million starting tomorrow, with a minimum purchase set of US$50,000. The general public may participate in the auction, as well as the finance and foreign exchange corporations. All purchases must be settled by 11 September. For those wishing to participate in the auction, the required forms for submitting bids can be accessed at the Central Bank’ s website: http://www.bancentral.gov.do. The offer must be sent to the Central Bank tomorrow between 9am and 12pm in order to qualify. El Caribe newspaper also reports that the Central Bank has extended the payment deadline on loans from local commercial banks to government agencies to 31 December. The Monetary Board agreed to prolong the payment schedule outlined in the 17 May resolutions, signifying that all government debts, both in dollars and in pesos, are due to be paid by the end of the year. |
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Use given to the most recent sovereign bonds Reporter Esteban Delgado of El Caribe shows that the Central Bank was unable to renegotiate the foreign debt as was stipulated in the law that facilitated the issuance of the US$600 million in sovereign bonds last January. According to Delgado, 50% of the bond issue was meant to be used to pay foreign debt and renegotiate longer and better terms on its remainder. It appears, however, that the money was used instead to pay the debt service charges for 2003. Part of the problem seems to stem from the devaluation of the peso on one hand and the insufficient funds received from the gasoline taxes on the other. Central Bank Governor José Lois Malkum confirmed that the Central Bank had not received the RD$2 billion collected under Law 112-00, known as the Hydrocarbon Law. Economist Pedro Silverio has put the figure closer to RD$3 billion. Malkum blamed the Pan-Am Games for the non-payment. In spite of directing US$150 million to the Central Bank’s hard currency reserves, El Caribe’s Esteban Delgado says that the reserves are nearing an all-time low. |
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Emam Zade: Less is more Economist Frederic Emam Zade, the economic director of the Global Foundation for Development and Democracy under former President Leonel Fernández, comments in his column in El Caribe newspaper today on the ignorance shown by the government when levying increases and new taxes on businesses and individuals in the Dominican Republic and explains the way in which the fiscal policy has failed. Emam Zade mentions some of the taxes instituted by the Mejía administration since year 2000: ITBIS from 8 to 12%; new 1.5% tax on gross sales; increased tax on alcoholic beverages and cigarettes; 0.15% on check transactions; 2% surcharge on imports; 5% surcharge on exports; raised departure tax from US$10 to US$20; increases in fuel tax, increases in power rates… “The present government ignores the fact that those who generate the wealth and the income that they want to tax, are the same ones they are strangling,” writes Emam Zade. “The simple fact that each additional tax increase generated relatively smaller increases in their tax collections clearly shows that it would have been better to instead have reduced taxes. To ignore this signal has been one of the biggest mistakes of the present government, and to learn from the experience can be one of the biggest successes of the next government,” he explains. Emam Zade proposes that the next government increase its fiscal revenues by lowering the maximum tax on finished goods to 10% and eliminating all other tariffs on other imports. He proposes the new government extend the duty-free zone treatment to all business by levying a tax of 10% on business profits in general. Likewise, he proposes to increase government collections with a broadened ITBIS tax that would include all goods, without exception, but at a 10% rate across the board. In his opinion, this would enable the government to eliminate the 1.5% tax on gross sales, the 0.15% on checks, the 2% on imports and the 5% on exports by mid-2004. Emam Zade says that by 2005, with the implementation of the Free Trade Agreement of the Americas and the liberalization of capitals, investment will be drawn to the most attractive countries – those with the lowest taxes. Emam Zade advocates that for the next government to start off well, it should also do away with taxes on capital, interest dividends and capital gains, and inheritances and donations, not to mention promote the repatriation of flight capital and lure investment from expatriate Dominicans and foreigners. These tactics, according to Emam Zade, would be the best way to generate more growth, jobs and more wealth in general. |
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Extra-official rules caused bank debacle Central Bank Governor José Lois Malkum told Hoy newspaper that the fiasco of the Baninter, Bancredito and Banco Mercantil banks was caused by their practice of giving loans to family relatives and companies with ties to bank executives and shareholders. He said that the banks operated outside the law and bank regulations. As reported in Hoy, Malkum said that if the banks had adhered to the established norms, “none of what has happened would have happened.” Malkum did not refer to the laissez-faire attitude taken theretofore by the Superintendence of Banks and the Central Bank, in preventing this situation that has caused all Dominicans to suffer. The Central Bank interposed Baninter, negotiating with Scotiabank for the takeover of several of its assets; Banco Profesional and Grupo E. León Jimenes purchased Bancrédito, and Banco Mercantil’s assets were acquired by the Republic Bank Limited of Trinidad & Tobago. In all cases, the Central Bank assumed or guaranteed the payment of millions in defective loans delivered by the banks. Malkum spoke of the positive aspect of the increased presence of foreign companies in Dominican banking. “It means there will be more competition, which makes the system more transparent because all will demand that the rules of the game be followed.” |
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Former bank president sent to Najayo The front-page picture in the Listín Diario on Sunday showed Ramón Báez Figueroa, the accused former president of the government-intervened Baninter bank, receiving his family and friends in the Najayo Prison, showing a rendez-vous that appeared more like a family picnic. According to Ramón Benzán of the Listín Diario, Báez Figueroa is facing his time in prison with “much dignity and bravery.” Several family members, including his father, wife and brother, were among the visitors and a special tent with plastic chairs was set up to accommodate them. In a related story, the former vice-president of Baninter, Vivian Lubrano, was hospitalized on Saturday, after suffering a severe case of hypertension. The incident occurred just hours after she was transferred to the Women’s Section of the Najayo Prison. Following a meeting on Friday of lawyers of the Central Bank, District Attorney Máximo Aristy Caraballo and Attorney General Victor Cespedes, the District Attorney’s office ordered former Baninter bank executives Ramón Baez Figueroa, his cousin Marcos Baez Cocco and Vivian Lubrano de Castillo be sent to the Najayo Jail in San Cristobal. Since May, the group had been in detention at the prison in Ciudad Nueva. News reports indicate that the fourth person held in connection with the Baninter case, Luis Alvarez Renta, currently under domiciliary arrest for health reasons, traveled abroad last week after the impediment for him to do so was lifted. The reports also revealed that the transfer of the three bankers to the jail occurred hours after the arrest of lawyer Pedro Jesus Maria Troncoso, the secretary of Baninter’s board of directors. Troncoso was arrested at his home on orders from the District Attorney office. Báez Figueroa’s lawyers said they would hold President Hipólito Mejía responsible for the personal safety of the executives. “We want to warn the government that any disorder, mutiny or violent act in the jail that threatens the physical safety of Ramón Báez Figueroa will be his sole and exclusive responsibility, and thus President Hipólito Mejía, as head of state, is responsible to protect the life and physical integrity of our defended.” Lawyer Vinicio Castillo Seman said the transfer was a retaliatory move of the District Attorney’s. He recalled that the defence bar of Baez Figueroa had said that in the next few days they would present Judge Eduardo Sánchez Ortiz, who is preparing the case, proof of the purchases made with the presidential credit card issued by Baninter and managed by Colonel Pedro Julio (Pepe) Goico Guerrero, in his capacity of chief of the advance security forces of President Mejía at the time. This was made known in a story in the Nuevo Herald of Miami. The documentation would supposedly prove that the card had been used to purchase a small fortune in sophisticated espionage equipment from the Israeli government, which was allegedly later sold to the Cuban government. The defence bar also recalled that the transfer happened after Aristy Caraballo, in a “strangely intimidating warning” to Baez Figueroa, asked him and his lawyers to keep silent on a New York Times story that mentioned that top officials of the Dominican government were the objects of a criminal investigation in the United States. News sources say the transfer came after Judge Sánchez visited Baninter and the Central Bank seeking documentation on the supposed fraudulent operations. In May, Aristy Caraballo had said he would not send the executives to Najayo for safety reasons. |
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American Chamber of Commerce speaks out Jorge Iván Ramírez, head of CODETEL and newly appointed president of the American Chamber of Commerce, spoke out yesterday, saying that judicial order and corruption at all levels are the principal sources of worry for most investors in the Dominican Republic. Ramírez said that “every time [his group] meets with a foreign investor, the first question they have is about institutionalism and the level of corruption in the country.” Questioned during an interview with Hoy, Ramírez said that judicial organization might be learned from examples overseas. Concerning Latin America, the countries with the largest foreign investment and highest growth of GNP are those that have successfully institutionalized the legal process over the past 20 or 25 years, said the Chamber president. One of Ramírez’s suggestions was that an international arbitrator be brought in to settle the problems between the electrical distributors and the government. According to Ramírez, an international figure with political clout could impose clear discussions at the negotiating table and reach unequivocal agreements. |
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Some mass-market items cost less The Listín Diario reports that while the prices of several products are dropping, others have seen unusual increases. At the supermarket, pastas, chicken broth, cooking oils, beans, and powered milk have gone down, as have construction re-bar, cement, household electric products and bathroom articles. By contrast, salted cod fish, potatoes, non-fat milk, onions, plantains, chicken, pork and beef had all gone up in local markets. The head of the National Business Union (UNACO), Pedro Adón Gúzman, told reporter Jairon Severino of the Listín Diario that he felt that the tumult and lack of confidence during July and August had forced manufacturers and producers to withhold price decreases until they can be sure the exchange rate has stabilized. The declines are attributed to the drops in the exchange rate last week and the resulting decline in the price of fuel, which was down about RD$6.00 last week. |
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A major transport union on strike Even though the OTTT (Transport Office) has declared the action illegal, leaders of the Fenatrano union are insisting they will strike today at 6am to support the Fenatrano president, Juan Hubieres, who is being held in jail. The director of the Metropolitan Office of Bus Service (OMSA) told Listín Diario’s reporters that there will be 650 units on the streets, including the air-conditioned buses and those that were used for the Pan Am Games. Rival union Conatra says that service to and from the outlying provinces will be supplied by their units. In the face of possible violence brought on by the rival unions’ positions and their battle to win over the same passengers, President Mejía instructed the armed forces and police to act with vigor with regards to the “shameful and vandalistic” actions of the unions. President Mejía also said he would ask for a review of the drivers’ pension plans and other ordinances to see why there are people “who think they own” the transport industry. The OTTT has stated that it will confiscate the license to use the routes now held by the Fenatrano union if the strike persists. Leading executives of the Plan Renove, whereby foreign loans were taken on by the government to purchase buses for the highly politicized transport unions, have stated that any buses not in service today will be seized and given to other drivers. |
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Figa-López: Surprise! Spanish ambassador María Jesús Figa-López told TV host Guillermo Gómez that President Mejía would sign four agreements on his upcoming visit to Spain. The resolutions in question have to do with jail terms for Dominican and Spanish criminals and the normalization of the judicial processes. A third convention has to do with embassy employees. A fourth signing, however, was said to be a “surprise” and the TV host’s questions were left unanswered. Ambassador Figa-López, appearing on the “Aeromundo” show on Color Visión, said that talks between the executives of Unión Fenosa and President Mejía prior to his departure would go a long way in resolving the current energy problems. Mejía is set to meeting with top executives of Unión Fenosa in Madrid. President Mejía is scheduled for to receive the utmost in VIP treatment from the Spanish government and King and Queen of Spain on occasion of his 12 September arrival. |
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Unión Fenosa seeks help from Prime Minister The headlines in today’s HOY say that Unión Fenosa has asked Prime Minister José María Aznar to intervene in the conflict between the electrical distributors, subsidiaries of Unión Fenosa, and the Dominican government. Honorato López Isla, the delegated advisor, told the Spanish press that Aznar would be well advised to talk to President Hipólito Mejía during the President’s visit next week. López Isla said that Unión Fenosa was considering abandoning its investments in the DR if the Dominican government insisted on intervening in the distributors’ operations. According to a story in the El País paper, UF is not willing to play the role of “sacrificial lamb” in the dispute, and neither is it prepared to have its image further damaged by the Dominican chief executive’s disparaging remarks. UF is requesting that the Aznar government put an agreement on mutual protection of investments that exists between the Dominican Republic and Spain into effect. |
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Chavez calls ambassador home Diplomatic relations between Venezuela, the DR’s chief oil supplier, and the Mejía government took a turn for the worse yesterday when President Hugo Chávez ordered his ambassador, Francisco Landis, to return to Venezuela for “consultations”. Speaking to a national television and radio audience, Chávez spoke out against what he called a plot to overthrow his government. According to Chávez, Dominican government ministers and even President Mejía are suspected of either supporting the intrigue or are allowing it to progress. Chávez said he would not return to the DR until the group he alleges is plotting his downfall is dismantled. He believes that former Venezuelan president Carlos Andrés Pérez, who resides in the DR, is a part of the conspiracy. |
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Monitoring Isabel Residents of the Dominican Republic should carefully monitor Hurricane Isabel as she makes her way through the Atlantic Ocean from Cape Verde. Now a Category 3 storm, she is expected to intensify to Category 4 by tomorrow. Projections show it most likely to make a turn to the north, which would lead it away from the DR’s North East Coast but causing major swells by next Monday morning. For a discussion on the hurricane by DR1 weather experts, see http://dr1.com/forums/showthread.php?s=&postid=153722#post153722 |
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