Hoy newspaper says that Union Fenosa (UF) and the Dominican government will sign today for the return the management of the Edesur and Edenorte power distributors to the Dominican government. According to the newspaper's sources, the company will keep its mid-level management during the two-month transition period. El Caribe reports in its "En la cosa" column that the top salaried positions, held by Spanish UF executives, would be eliminated, in order to reduce company spending. Hoy newspaper reports that UF agreed to reduce its requested US$70-million payment for capital investments and loan reimbursements to US$54.3 million. The government also acknowledges outstanding debts of Edenorte and Edesur totaling US$460 million, with a breakdown as follows: UF's Palamara/La Vega power generation subsidiaries, US$177 million; the Inter-American Development Bank, US$139 million, commercial banks, US$47 million. Hoy reports that the deal calls for the government to take on a US$346.1-million debt, of which US$15 million would be immediately paid, and another US$331.1 million settled over a 12-year period with accumulating interest payments. Through its subsidiary Didoel, UF would recoup the amounts owed, as per the 12-year usufruct agreement, with the revenues generated by the best-paying clients of the power distribution companies. UF affiliates reportedly owe US$100 million to the other power generation companies, and at this point it appears the government will be assuming this debt. The agreement was reached on 10 September, prior to President Hipolito Mejia's trip to Spain, where, in the presence of King Juan Carlos, head of Spanish government Jose Maria Aznar and key UF executives, he vowed to honor the arrangements made. As per the privatization act, the government has one year in which to find another business partner. An audit is being conducted to evaluate the financial worth of the renationalized distribution companies. Overall, the Union Fenosa privatization was a bad deal for the Dominican Republic. The government now is buying back for much more the distribution part of the energy sector. Dominican taxpayers will eventually pay for the bad deals made in the energy sector by government. Since 1999, residents in the Dominican Republic have also had to endure increasingly expensive and deficient service, despite promises that service would decline in price and improve in quality with privatization.
The Superintendence of Power announced that the cost of electricity would see a 3% increase as of October. Those consuming less than 300 kWh, however, would be spared. Hoy newspaper reports that so far this year, power rates for those consuming more than 300 kWh per month have risen more than 80%. Power rates are adjusted regularly for exchange rate fluctuations, inflation, the cost of fuel and other variables.
The government authorized a RD$50-million initial disbursement primarily to be used to accelerate work at the state university (UASD) facilities in Puerto Plata. The plan is to use the classrooms for the students that were displaced when their schools suffered major structural damage during the 22 September 6.5 magnitude earthquake. The funds disbursement was authorized during a meeting of the government council held at the Presidential Palace yesterday.
Alicia Ortega of the Cadena de Noticias news station (CDN Channel 37) will appear live with a special report from Puerto Plata on the 22 September earthquake and the multiple aftershocks in that northern province. The show will be broadcast from 8 to 10pm. The Seismology Institute of the UASD encourages the authorities to study buildings where high concentrations of people are found during the day, as several of these were shown to be flawed. "It is a matter deserving much attention that the locations that fell short were those where concentrations of people occur during the day, such as at public schools, churches, government offices and banks," said Juan Payero, director of the Seismology Institute. He said these need to be evaluated to determine how they should be reinforced.
The foreign relations ministers of Venezuela and the Dominican Republic, Roy Chaderton and Francisco Guerrero Prats, respectively, met yesterday in New York, to search for a solution to the impasse that has put a hold on Venezuelan petroleum shipments to the DR. The chancellors were in New York to attend the United Nations Assembly. El Caribe reports that the meeting ended with the diplomats agreeing to maintain permanent and direct contact channels open, although the Venezuelan decision to suspend petroleum shipments was not rescinded. The Venezuelan government of Hugo Chavez has accused the Dominican government of supporting an alleged conspiracy led by former Venezuelan President Carlos Andres Perez from Dominican territory. Guerrero Prats, as reported in the Listin Diario, defended Perez's right to reside in the DR, saying, "He has the right to be in the DR for as long as his stay is authorized, and we ask of him, as we ask of all those who enter the country, that he respect the laws by which foreign citizens must abide." In regards to Chavez's accusation, Guerrero reiterated that the Dominican Republic would never allow any kind of conspiracy against a legitimately constituted government, and much less against the government of Venezuela. The newly-appointed Dominican ambassador to Venezuela, professional diplomat Manuel Morales Lama, has not been able to present his diplomatic letters to Chavez, for which reason the DR does not currently have an official ambassador in Venezuela. On the other hand, the government of Venezuela called its ambassador in the DR to Caracas for consultations. Meanwhile, Listin Diario reports that the president of the Dominican Petroleum Refinery, Amable Justo Duarte, traveled to Trinidad to increase purchase orders for natural gas sourced from that Caribbean island.
The United Nations Development Fund has published a report on the state of the Dominican economy. The compilation of data depicts the same bleak picture as that of the Central Bank's mid-year report published earlier. The UNDP analysis highlights the fact that government spending for August was up 12% since January of this year. The Central Bank's advances to aid failing commercial banks rose to RD$73 billion in September, compared to RD$30 million in the first month of the year. Likewise, government capital expenditures were less than 1%, and the economy decelerated to a -3% growth rate during the second quarter of the year. Unemployment also soared to 16.4% in April. As of August, inflation stood at 24.6%, but the Central Bank forecasts a year-end inflation rate of 35%. The UNDP also calculates a 70% depreciation of the peso over the past 12 months.
The Senate building was broken into yesterday and the CPU containing important Senate documents was removed from the office of Senate secretary Paris Goico. The robbers did not bother to remove the monitor of the computer.
EGTT Dominicana, the company that formerly handled Santo Domingo Este municipality's garbage collection, disputes the statement made by Mayor Domingo Batista which said the company was billing RD$16 million a month for the service, as reported yesterday in DR1 Daily News. "On average, the French company has been billing approximately 10,000 tons a month times US$23.00 - equivalent to a monthly bill of US$230,000 - and less than half the Major's statement!" according to Henri Hebrard, spokesman for EGTT. As per one EGTT executive's statement to the press yesterday, the company is encouraging the press to ask the Mayor what happened to the difference between what he is claiming he paid to the French company and what they have in fact received. EGTT claims more than US$600,000 for services performed since the second half of June. It also says penalties and interests for approximately US$30,000 must be added, as well as around US$170,000 for exchange rate differences since the Mayor refused to pay the official Central Bank FX Rate, despite the contractual agreement, and instead was using a rate of RD$25 to US$1. The French company placed an embargo on the bank accounts of Santo Domingo Este on Friday, 26 September, claiming a debt of RD$23 million. According to a report in Hoy newspaper, the Mayor Batista has offered to pay RD$7 million to settle the legal conflict. On the other hand, Domingo Jimenez, spokesman for the PLD aldermen at city hall, wrote to Hoy newspaper to clarify that while the PLD representatives voted in favor to rescind the EGTT contract, the representatives also supported the formation of a multi-party commission to investigate the PLD claim of nepotism between EGTT officers and high-ranking officers of the city government - including relatives of Batista - and urged an investigation into the management of the financial operations of the company. During a municipal government session, a majority of councilors, of both PRSC and PRD parties, instead opted to rescind the contract, without endorsing the proposal to review the alleged irregularities in the municipality's finances in connection to the million-peso amounts paid to EGTT that have recently been made public.
The seven individuals vying for the PRD presidential candidacy for the May 2004 election and who dispute President Hipolito Mejia's desire to be re-elected, announced yesterday their intention to proceed with their plebiscite for 12 October. Vice-President Milagros Ortiz Bosch, Rafael Subervi Bonilla, Jose Rafael Abinader, Enmanuel Esquea Guerrero, Rafael Flores, Ramon Alburquerque and Hatuey de Camps are organizing the event in which all registered PRD members will be able to submit their opinion anonymously on whether President Mejia should seek to be re-elected or not. President Mejia and the PPH faction of the PRD that supports his re-election have announced they will oppose the consultation through the channels of the Central Electoral Board (JCE), the body in charge of organizing the presidential election. Vicente Sanchez Baret, director of the Customs Department and PPH spokesman, said that the PPH is against the plebiscite on the grounds that it is not reflected in PRD party statutes, nor has this consultation mode been used previously in the history of Dominican politics. Nevertheless, Sanchez Baret said in an interview on CDN Radio that the PPH would not close any doors. Meanwhile, Hoy newspaper reports that the president of the PRD, Hatuey de Camps, who has been the most vocal opponent to re-election within the PRD, said that President Hipolito Mejia stands little chance of being re-elected in 2004, because the Dominican people would have to be crazy to vote for a continuation of the present bleak situation. De Camps recommended that government officers attend to the problems of the nation and abandon their political campaigning that he says will lead them nowhere. A national survey conducted from 11-17 September by the US polling firm Greenberg Quinlan Rosner showed that 79% of 1,300 potential voters were against Mejia's re-election in 2004. The issue of re-election, per se, had a lesser rate of rejection, with the same survey showing that 55% oppose presidential re-election.
Anibal de Castro, executive editor of the Diario Libre, writes an editorial today on why the Dominican Republic has failed and those reasons, he says, are not only economic. The existing political and social culture deters the progress of government and the standard of living, believes de Castro, who says that the current economic crisis has happened because the nation's political philosophy badly needs to be updated. He explains that the political parties and their leaders are stuck in the old formulas of political clientelism and patronage, and they overlook the new conditions of the globalized world. He writes that the political teachings of Balaguer (who was in power for over 30 years) still prevail and that this formula fosters corruption, political machinations and dire schemes that contribute nothing to progress, the modernization of society, the fortification of its institutions or any other values associated with democracy. He said that while the DR experienced economic growth, it has not seen actual development. De Castro blames the nation's decline on the fragility of its institutions, and says the saddest part of it all is that such a scenario could repeat itself unless the nation recognizes that the law is above everything else - even the Executive Branch. De Castro laments the fact that the IMF only imposes economic conditions for its disbursements, wishing they could instead condition the disbursements on a balance of government powers, including the Central Electoral Board (JCE); the absolute transparency in the management of government funds; professional requirements for obtaining a government job; the implementation of a budget in which education and health are prioritized; a strict code of ethics in government that would penalize nepotism; and, finally, advances in our democracy that would impede the biggest contributors from holding the political parties for ransom.
The Listin Diario reports that 12 women have been killed by their spouses in incidents of domestic violence this September. The total number of victims of domestic violence reported by police this month is 19, to include four children, as well as three men who committed suicide after taking the lives of family members. Psychiatrist Cesar Mella says that the press coverage of the killings has only encouraged mentally unstable individuals to emulate what they perceive to be a solution to their personal crises, thus leading to a record-high incidence of reported domestic crimes. The Alianza por los Derechos y Desarrollo de la Mujer y la Familia (ADDEM) says that police reports indicate 125 women have died so far this year in domestic violence incidents. Reina Cohen says the country does not have any shelters for abused women, which obliges the battered women to return to their homes or stay with friends. The organization is planning a workshop called "International Seminar on Domestic Violence and its Economic, Social and Labor Impact", in connection with the International Alliance of Women (IAW), to be held in the Dominican Republic.
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