| Daily News - 6 October 2003 |
A subsidy for propane gas will forestall a price hike this week, according to President Hipolito Mejia, who also reaffirmed the need to continue spending RD$300 million a month to provide electricity to the various underprivileged neighborhoods of Santo Domingo and other cities. The new subsidy for propane will go into effect if the current escalating trend in petroleum prices continues. The President also warned that what happened to the Union Fenosa power distributors could also happen to the Cogentrix generating facility if they are not more receptive and cooperative. President Mejia told the press that his government had paid the Cogentrix generation facility the sum of US$42 million and that it was time for them to get back online with the 300 megawatts that they are able to produce. "They must generate or face the problem, like Union Fenosa did, regardless of what they are called or what is their nationality," warned President Mejia.
The accumulated debt of the electrical distributors with the generators has reached US$85 million (RD$2.4 billion). According to reports, however, the CDEEE will announce a payment plan for these amounts this Tuesday. Rafael Calderon, the Minister of Finance who presided over the extended meetings between government officials and representatives of the generating facilities, said that the generators were willing to work towards a solution to the energy crisis that is affecting the country as a whole. Several top officials of the generation companies said that the government was taking appropriate steps to solve the problem. Both Jose Manuel Paliza of Monte Rio and Rolando Gonzalez of EGE-Haina agreed with the government's position. Hoy carried headlines that said the blackouts were worsening while El Caribe published two articles that offered a more positive stance. One of these said that the generators and the government are on the same page and they quoted Jose Manuel Paliza as saying that the government would be able to count on the IMF and the World Bank to assist in the financing. The second article said that there had been fewer blackouts because Itabo II returned to service at 106 megawatts, as did Haina II, with 44 megawatts. Only 54 of the country's circuits were down on Saturday, and the energy deficit, which had surpassed 400 megawatts during the week, was contained at 133 megawatts.
The Monetary Board established new controls on last-minute efforts to rescue banks in trouble. According to the Listin Diario, the board will authorize loans to banks that have lost 10% of their deposits. The text of the new rules is published in its entirety in today's edition.
Agribusiness negotiators consider Cancun's meeting to have been a "successful failure", according to both the Listin Diario and Hoy newspapers. Negotiator Osmar Benitez said that the position of the poorer nations was to form a negotiating bloc of 34 nations that could face up to the Big Three (the United States, the European Union and Japan). The Big Three represent the major countries that heavily subsidize the export of agricultural products. While Switzerland has the most heavily subsidized agricultural industry in the world, the United States, according to the Listin, finances its agricultural production to the tune of nearly US$1 billion a day. According to Benitez, the former executive vice-president of the Dominican Agro-Business Board (JAD), discussions started during the Uruguay Round of Ministerial Talks were amplified and the three basic points of market access, export subsidies and internal assistance were confirmed. The leading negotiator for the agricultural sector told the press that while the DR only posted ten products on the protective list (rice, poultry, milk, beans, garlic, onions, sugar, pork, beef and cheese) other countries posted as many as 500 products for tariff protection. Economist Bernardo Vega said that commitments have been made by the Dominican government and confirmed by the Minister of Commerce and Industry, Sonia Guzman, who have required what he called a "technical correction" of the items to be protected under the new trade agreements. The Dominican Republic is now a net importer of foodstuffs.
Economist Eduardo Tejera recommended that the financial savings certificates recently issued by the Central Bank be switched to 10-year state bonds and thereby prompt an immediate reduction in interest rates. As reported by Aleida Placencia for Hoy newspaper, Tejera suggested an immediate 9% reduction in interest rates, bringing them from 27% to 18%. One of the chief points for Tejera is the fact that the plan would reduce debt service obligations by more than RD$10 billion a year. Another benefit would be the elimination of the 5% tax on exports now being so hotly debated, or the proposed new 5% tax on imports, recently mentioned by President Mejia as a substitute to the export tax that was declared unconstitutional by the Supreme Court. Regarding the bonds, Tejera suggested that RD$50 billion in savings certificates be converted into bonds at an interest rate of 8%, that they be tax-free and approved by Congress. Finally, the economist said he felt that the Central Bank would not be able to pay off the savings certificates, and so it would be best to convert them to public debt in the form of state bonds.
The risk assessment team at JP Morgan issued a statement saying that the Hipolito Mejia's government has placed his re-election bid ahead of economic stability as the main priority of the government. "While a new Letter of Intent [with the IMF] could be negotiated with more realistic targets, we are not optimistic that the Mejia administration will give the fulfillment of the IMF program priority over its desire for re-election in May 2004, even amid the challenging external debt service schedule over the remainder of 2003 and 2004 (US$1 billion due)," states the 3 October update from JP Morgan. By and large, JP Morgan does not think there is a positive perspective for the short term and does not disregard the possibility of the monetary and financial system facing new pressures. The report also refers to the return of the IMF mission that traveled to the Dominican Republic to establish the first monitoring of the Stand-By Arrangement, signed by the DR government with the IMF. See JPMorgan.pdf
The United States press officer in Santo Domingo confirmed that Washington has revoked the B1/B2 entry visa of government legal advisor Guido Gomez Mazara, says Hoy newspaper. This non-immigrant visa is issued to individuals wishing to enter the US temporarily for business, pleasure or medical treatment. Gomez Mazara's passport does, however, still contain a visa to travel to the United States and he will be able to enter the US for as long as that passport is valid. Gomez Mazara studied in the US and is married to a US citizen. Although the embassy's press office confirmed that the reason for revoking the visa was that "Mr Guido Gomez Mazara was ineligible under the terms of the nationality and immigration law," their statement quoted in Hoy newspaper claims that no other details are available for reasons of confidentiality. Diario Libre explains today that the official visa was not suspended because of international treaties that say a suspension of the visa of a government official is akin to an unfriendly gesture to that government's country and it would require the DR to assess diplomatic penalties. President Mejia has been especially complacent with requests from the United States regarding trade negotiations and even supporting the US position on Iraq by contributing Dominican troops. Rumors surrounding Gomez Mazara's status have been circulating for the last few months, but came to a head when the leading PRD activist and prominent supporter of the President's re-election plans made an unexpected return from Puerto Rico in December 2002. He then dismissed the rumors as an attempt to discredit him. Gomez Mazara did not explain the reasons for the cancellation of his personal visa. Nevertheless, he is quoted in the Diario Libre saying that he still had five years to travel on his official visa. He is convinced that President Mejia will be re-elected in 2004. President Mejia said that Gomez Mazara was not the only official whose visa has been revoked.
More gerrymandering was proposed by Congress, as they attempt to convert Santo Domingo into three provinces, each with its own municipalities and bureaucracy requirements to administer the areas. According to El Caribe, the idea to create Santo Domingo West, North and East comes from a PPH deputy named Radhmes Gonzalez, who wishes to create the three new senatorial seats along with the deputies to represent the various municipalities. Opposition to the move, in a Congress controlled by the PRD party, is weak and generally limited to NGOs that say the new divisions will hamper assistance to the needy by fragmenting distribution areas. Hoy newspaper editorial today says that the proposal is unjustifiable from a socioeconomic point of view, and only understandable when seen as an aspiration of he who sees the country as political booty.
The Senate has decided to eliminate 100 advisors and reduce working commissions from 30 to 19. According to the Listin Diario, the Senate met at Casa de Campo in La Romana with experts from the Inter American Development Bank (IDB), who proposed the new internal measures. Among the new steps will be an internal tribunal to deal with ethical and disciplinary matters of the members. The elimination of so many advisory commissions will necessitate the creation of the Permanent Advisory Office for Economic, Financial, and Legislative Affairs for the National Congress (OPA), which will serve both houses of Congress. There are 32 senators in the Dominican Republic.
Ambassador Adam Blackwell is a happy man and proud of the progress in Canadian investments in the Dominican Republic. During an interview with Pablo Ferrer of El Caribe, Blackwell had his notes at the ready, so as not to leave anything out. He indicated that Canadian investments in tourism, mining, banking and telecommunications were growing, and that the effort to establish Canadian brands was becoming increasingly more successful. Blackwell referred to the fact that the Vancouver Airport Authority is assisting Aerodom in the management of the five largest airports in the DR, and the boom year ahead for Canadian tourism to the DR, bringing 350,000-400,000 tourists per year. In 1992, said Blackwell, Canada was undergoing problems similar to those being experienced in the Dominican Republic today. Nevertheless, it now enjoys the highest growth rate of the G-8. Blackwell defined Canada as a good friend of the DR, and said that what friends are for - lending a helping hand.
Making headlines today is the gruesome account of another family tragedy, in which the murder of a mother and daughter was followed by the suicide of the father. The family's dysfunctional behaviour was also exposed, with the husband being singled out for his violent and abusive treatment of his wife. Calls for better protection for women and children were among the comments carried in El Caribe. Other news reports revealed that so far this year 11 women have been killed by members of the police and the Armed Forces - 13% of the total number of women killed by their partners.
The contents of this webpage are copyright © 1996-2008. DR1. All Rights Reserved.