News reports showed photos of Cesar Sanchez signing contracts with Union Fenosa representatives at the Hotel Santo Domingo at 5:30am on Tuesday, in order to meet deadlines set by government negotiators. The reasons for the rush, however, were not disclosed and economic analysts are at a loss to explain. Speaking to members of the national dialogue at the PUCMM yesterday, Finance Minister Rafael Calderon told the press that the process to take over the electricity suppliers could not stand any further delays, and that is why they could not observe the IMF's request to postpone the deal for another 30 days. The government was, however, open to making "fiscal adjustments" in the wake of the deal, according to Calderon. Calderon, as reported in El Caribe, believes the RD$1.3-RD$1.5 billion the company collects monthly is enough to pay the contracted debt, now with Didoel subsidiary of Union Fenosa, suppliers and operational expenditures. Under the terms of the agreement, the government would pay RD$2.5 billion to the electricity distribution companies before the end of the year. This money was originally to have come from the unpopular 5% tax on exports, which was yesterday declared unconstitutional by the Supreme Court, leaving the authorities with a dilemma, says government economic advisor Jaime Aristy Escuder. He contends that the needed funds will now have to be raised either through increased taxation or by raising the price of electricity by 41%. The business sector has suggested the government reduce its payroll, which they say is padded with political appointees who do not perform any necessary function. The government has said that such cutbacks are not an option, given the upcoming May 2004 presidential election.
Also speaking at the PUCMM meeting, as reported in Hoy newspaper, Jesuit priest and economist Jose Luis Aleman termed the deal with Union Fenosa a "dangerous political move" aimed at rallying popularity. Aleman said the government should instead have demanded better implementation of the contracted services from the Spanish company. While he believed a long-term solution to the power crisis existed, he doubted there could be one to resolve matters quickly that would take the interests of the Dominican population into consideration. Nevertheless, Padre Aleman called on the public to pay their electricity bills. "Things cannot go on like this," he said. "There is such a thing as basic decency... a service received, however bad, must be paid for." Aleman has been quick to point out that the most delinquent consumer is the government itself.
Adriano Miguel Tejada's back-page commentary in today's Diario Libre provides what one hopes is a satirical report that says the PPH (the Proyecto Presidencial Hipolito internal PRD campaign to promote the President's re-election) may at last have found a way of reducing spending on the public payroll. Tejeda suggests that all government employees should simply be asked who they are going to vote for in the upcoming PRD plebiscite. If they support one of the "magnificent seven" - the seven pre-candidates opposed to Mejia's re-election - they should be dismissed on the spot. This, says Tejada wryly, should come as good news to the opposition and the International Monetary Fund, who are so keen to see the government shrink its public spending. The writer may be contacted at atejada@tricom.net
The government is coming under pressure to pay back the money raised by the recently introduced import and export taxes, originally levied by Presidential decree in order to fund the payments to the power distributors. Lisandro Macarrulla, president of the Dominican Association of Industries (AIRD), has said that the Supreme Court's pronouncement of the illegality of the controversial 5% export tax and the 10% surcharge on imports means that the government should now be obliged to refund all payments made to date. Economist Pedro Silverio has echoed this sentiment, saying the refunds should include the amounts remitted plus interest accrued, with immediate effect, and that the business sector could also demand compensation for any harm caused by the additional expense. FINJUS (Foundation for Institutionality and Justice) president Alfredo Rizek said that if the money was not refunded, the business community would have to take legal steps against the government. El Caribe reports the Customs Department has not received notification that the surcharge has been revoked.
For the second time in four months US analysts Standard and Poor's has reduced the Dominican Republic's risk rating, this time from B+ to B-, amidst growing fears that the country is likely to default on its loan repayments. Following the collapse of Baninter earlier this year, S&P reduced the rating from B++ to B+ in June. S&P analyst Richard Francis said, "The government is facing repayments of almost US$1 billion for 2004, a sum three times greater than the US$315 million in liquid assets available to them in September 2003." The report points out that the International Monetary Fund agreement could be the key to preventing a crisis in the coming year, and that any success in this regard could improve the rating.
Bear Stearns reported on 1 October on the cooling of relations between the IMF and the Dominican government following the government's insistence on rushing the buyback of Union Fenosa power distribution company shares. Bear Stearns does not believe, however, that the short-term fiscal costs associated with the renationalization of the power distribution companies will be substantial, given that the future revenues from the distribution contracts will be used to service the companies' existing debts. "We do not expect that these events will be enough to completely derail the IMF agreement," writes Franco Uccelli, Bear Stearns' vice-president for emerging markets. He mentions that restructuring of the energy sector was included in the letter of intent signed with the IMF. Reportedly, the IMF had requested a 30-day postponement of the signing of the agreement. After the government rejected the request, the IMF mission that was in Santo Domingo to conduct an initial review of the stand-by agreement returned to Washington for consultations. Uccelli says that in addition to leaving the review unfinished, the mission's actions effectively put the stand-by agreement on hold, interrupting all scheduled disbursements from the IMF, the World Bank and the Inter-American Development Bank. So far, the IMF has paid only US$120 million of the estimated US$600 million in multilateral disbursements scheduled for this year. As a result of the interruption, the volatility of the Dominican economy is likely to worsen as far as the dollar-peso exchange rate is concerned. This phenomenon is already being reflected by the downward trend the peso has maintained this week.
The Dominican army reconstruction contingent in Iraq was involved in an incident yesterday in which their base at Diwaniya, 190kms to the south of Baghdad, was attacked by gunfire. No one was injured in the confrontation and Dominican soldiers were able to detain several suspects. This is the first time the troops have been involved in an armed incident since they arrived in Iraq last month and the area in which they are stationed is relatively peaceful. The 300-strong "Task Force Quisqueya" is engaged in reconstruction work in the south and central region of Iraq, along with troops from Spain and Central America. The "Que se dice" column in Hoy newspaper calls yesterday's skirmish as a "trial by fire" for the Dominican troops, reminding readers that their peaceful mission is being played out in a dangerous part of the world. The writer gives thanks that there were no casualties, and expresses hope that all the soldiers return home unharmed.
The Venezuelan Vice-President Jose Vicente Rangel said yesterday that relations with the Dominican Republic were "in the process of improving." Rangel said that both nations' foreign ministries were actively trying to mend the rift that emerged when the Venezuelan President ordered a suspension of oil exports to the Dominican Republic, due to his suspicion that a coup was being plotted against him from Dominican territory, headed by exiled former Venezuelan President Carlos Andres Perez, with the alleged complicity of the Dominican authorities. "Once Carlos Andres Perez's status in the Dominican Republic and his relationship with high-ranking Dominican government officials is clarified, the crisis could be resolved," said the Venezuelan VP. Venezuelan oil exporting agency (PDVSA) president Ali Rodriguez said that although Venezuela had suspended its daily sale of 25,000 barrels of crude oil to Refidomsa, the Dominican oil refineries, 85,000 barrels of Venezuelan oil were still reaching the Dominican Republic daily through intermediaries.
The Diario Libre reports that the Dominican Republic will join the Free Trade Agreement with the United States once the Central American countries have finalized their negotiations, according to El Salvador's Finance Minister, Miguel Lacayo. This decision was made at a meeting between US Trade Representative Robert Zoellick and his counterparts in the region. Speaking at a press conference, Lacayo said that "the Dominican Republic had agreed to accept the terms reached by the Central American nations. If there is no delay, we will welcome [the Dominican Republic's] inclusion." Nevertheless, Lacayo added that any annexes to the treaty would have to be negotiated bilaterally between the Dominican Republic and the US. Lacayo claimed that "the Dominican Republic's interest in joining the FTA was the first example of other nations in the region who will show enthusiasm for joining this free trade vehicle, which will take the region to greater economic and social development."
The Ambassador of Taiwan, Chi-Tai (John) Feng told Hoy newspaper that the President of Taiwan, Chen Sui-Bian, would visit the Dominican Republic on 5 November. President Mejia has officially visited Taiwan twice, in 2001 and 2002, but, according to a report in Hoy newspaper, he visited Taiwan more than 20 times before being appointed head of the Dominican government. This would be Sui-Bian's second visit to the Dominican Republic, the first time having been to attend the inauguration of President Mejia in 2002. Ambassador Feng said that the Taiwanese President would visit both Santo Domingo and Santiago. The Taiwanese government has actively made donations to Dominican education, forestation, farming, health and vocational training programs, according to Roberto Juan, representative of the Taiwanese embassy. Assistance from Taiwan also includes a US$1-million university scholarship program for Dominicans to study in Taiwan, and US$8 million to support programs at the Technological Institute of the Americas (ITLA) information systems university. The Taiwanese government has funded the construction of a US$15-million public hospital in southwestern Azua, scheduled to open in March 2004. Feng acknowledged that at present the trade balance between the two countries generally favors Taiwan, by a US$100-million surplus. He said he would try to serve as a catalyst for an increase in Dominican trade to Taiwan and believes Taiwan to be a market for Dominican coffee, cigars and amber, among other products. Furthermore, Ambassador Feng told Hoy newspaper that high airfare is the only impediment to the development of Taiwanese tourism to the Dominican Republic. Coincidentally, when the Ambassador earned his master's degree at the University of North Dakota in the United States in 1973, he chose the Dominican Civil War of 1965 as a theme for his thesis. Ambassador Feng was born in 1946 and also has a master's degree in public administration from Harvard University.
The Puerto Rican Seismic Network (RSPR) will install ten temporary seismic study stations to analyze the fault line associated with last month's earthquake in the Puerto Plata area. The data they collect will be studied by RSPR and their Dominican counterpart, the Dominican Seismic Network.
El Caribe carries details of a national survey on health, which has found that more women than men are living with HIV/AIDS in the Dominican Republic. The highest incidence is in the east of the country, in the provinces of La Romana, Higuey and El Seybo, and over half the population do not believe themselves to be at risk. The most vulnerable to infection are the poor and young people living in areas of high urban concentration. On a national level the incidence of infection is 1.1%, while in the bateyes, it is potentially as high as 12%, says the survey. Maria Castillo of USAID's "Health and Population" project said that "overconfidence is risk", referring to the fact that many people polled were unaware of the risks of contracting the virus. The survey also highlighted the stigma of HIV/AIDS, with 35% of those interviewed believing that sufferers should keep their condition a secret. Only 60% thought that people with HIV/AIDS should be allowed to attend school.
El Caribe leads with a report that says two people die in the Dominican Republic each day as a result of gunshot wounds. Over 360,000 Dominican civilians are legally armed - 7% of the population - but many more are in possession of illegal firearms. "Pulling the trigger has become all too common," says the article, and the public is "terrorized by crime or overly fond of weapons." About 80 people apply for gun licenses every day, according to Interior and Police Ministry spokesman Eduardo Ogando. The police and the government favor well-regulated, licensed gun ownership, but all too often this is not the case, as the grim statistics show. Many people possess false licenses and it appears there is a thriving industry involving the production and sale of such forged documents. Police and Interior Minister Pedro Franco Badia recently announced improved standards in the production of legal licenses that would make them more difficult to be counterfeited. Badia condemned the existence of illegal weapons in the country, mentioning that certain recent high-profile murders had been carried out by unlicensed gun owners. El Caribe's editorial flags the issue as a matter of top national priority. The column, under the title "Fewer guns and less violence", concludes by saying "As a society, we cannot allow disputes to be resolved by armed violence".
El Caribe newspaper reports on the 10 most accident-prone corners in Santo Domingo. Intersections that need to be approached with care are: Maximo Gomez/Kennedy; Tiradentes/27 de Febrero; Lincoln/Kennedy; Lincoln/27; Ortega & Gasset/27; Ortega & Gasset/Kennedy; Churchill/27; Lope de Vega/Pastoriza; Lope de Vega/Kennedy; and Lincoln/Jose A. Soler.
Mercasid and its affiliate, Industrias Veganas (Induveca), has taken over the operation of the Weightlifting Pavilion built for the Pan American Games at a cost of RD$46 million. With a capacity for 1,644 spectators, the venue is located in the Parque del Este sports complex. News reports indicate that the Dominican Republic is the only country to have a pavilion exclusively for the sport of weightlifting. Mercasid will preside over the board of directors and an Induveca executive will act as treasurer. Other members of the board, created by Decree 895-03, are the Sports Minister, the Public Works Minister, and the Administrative Secretary of the Presidency. Bolivar Vargas Candelario, president of the Dominican Federation of Weightlifting, a representative of the Dominican Sports Writers Association (ACD) and a member of the Dominican Olympic Committee (COD) will also be included. The board will oversee operations for a period of 10 years and will be in charge of preserving the million-dollar installation and its members will be honorary participants.
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