The re-acquisition of the energy distribution companies EdeSur and EdeNorte will bring an end to power outages, said President Hipolito Mejia in an address to supporters of his re-election yesterday. "The service has improved since the government took over EdeNorte and EdeSur, and will improve because that is my commitment - I would not joke about this with you," he said. He also told the crowd assembled in Santo Domingo's Cristo Rey district that the PRD would not support the plebiscite being organized by the seven Presidential pre-candidates opposed to his re-election, and that he was certain he could defeat former President Leonel Fernandez, the PLD's presidential candidate.
El Caribe's headline today says that businesses could see a 50% increase in the power bills. Edwin Croes, financial manager of EdeSur and EdeNorte, now renationalized by the government, said that if an alternate option is not found, industrial and commercial power rates will go up by 40-50%. Croes said these are the same sectors that boycotted the 50% tax on exports. The Superintendence of Power has authorized a 3% increase effective this month for the power distributors.
In an interview with El Caribe, Apolinar Veloz, general manager of the Central Bank, said that the government was poorly advised by those who recommended establishing increased legal reserves to banks, subsidizing the power service, imposing a 5% tax on exports and buying back the shares of the power companies. Veloz said the government should not have paid anything for Union Fenosa's shares because that company was bankrupt. These are the reasons, according to him, that the monetary and fiscal accounts are not balanced and that have prompted the IMF's suspension of the financial assistance program it committed to upon the signing of the IMF standby arrangement. He blamed governmental economic advisors at the Fundacion de Economia y Desarrollo, a leading Dominican economic consultancy firm, for their questionable governmental recommendations. On Wednesday, in an interview published by El Caribe, the president of the economic consultancy group, Andres Dauhajre Jr, said that the Dominican negotiators and the IMF undervalued the fiscal disequilibrium caused by the failed banks and did not implement sufficient taxation in compensation. Dauhajre told El Caribe that he did not participate in the final discussions of the IMF agreement. Veloz said that Dauhajre recommended the monetary authorities increase the legal reserves in the banking system, which in turn triggered the breakdown of Bancredito and Mercantil. He said that the government then decided to subsidize the power rates, which required further resources the state did not have at the time. Regarding the Union Fenosa power distributors, Veloz said that "the government bought a bankrupt company, committing to pay US$576 million over a 12-year period, when everyone knows that a bankrupt company has zero value… With the purchase of the company, the government now needs to find new funds - worsening the situation." While he conceded the government was presently working on getting the IMF agreement back on track, Veloz felt that another error was the issuance of sovereign bonds, at the suggestion of Dauhajre. He explained that the first placement brought an overexpansion of demand and unnecessary financial charges for the government. "The second placement [of US$600 million] should have been used to service the debt for the next seven years, as was agreed with the government. Instead, it was exchanged to cover short-term debt, which has not had a positive effect on the servicing of the debt, as was originally planned. http://www.elcaribe.com.do/periodico_impreso/cuerpos/intereses/economia/economia02.asp
Writing in the Listin Diario, commentator Ana Mitila Lora says the conflicts mentioned by the international financial authorities are comparable to the dilemma faced by those Dominicans lucky enough to have some money to spare. In the same way the government is putting the country's interests behind the President's re-election ambitions, Dominicans are faced with the "unpatriotic" option of changing their pesos into dollars or euros. Lora's commentary comes after The Economist Intelligence Unit released its update on the Dominican Republic that makes gloomy reading for investors in the country. In the brief, the economic research branch of the British newsweekly magazine expresses concern about the government's recent re-acquisition of the power distribution companies from the Spanish Union Fenosa, saying there is no indication where the money will come from to fund this operation. According to The Economist Intelligence Unit, the government will have to increase taxes or drastically cut its costs, which rose by 12% in August compared to January 2003. It warns of the possible issuance of more sovereign bonds, pointing out that the national debt will have doubled since Hipolito Mejia took power in 2000. Despite the emission of bonds and the IMF loan, the national reserves are at an all-time low, according to the British-based publication. The report concludes that it will be difficult for Mejia to win another term in this climate, and predicts a tough time for his successor who will have to pick up the pieces. Hoy newspaper's economic section reports that international ratings agency Fitch has also downgraded the Dominican Republic's risk rating to B+ as a result of the Union Fenosa deal. The Mejia administration has hailed the Fenosa buyback deal as a political triumph, given the widespread animosity in the country for the Spanish firm's management that failed to improve service, despite having tripled the cost to Dominican consumers.
PLD pre-Presidential candidate Leonel Fernandez has said that the next government will have to be austere in its public expenditures, and proposes an economic model based on the private sector. Should he be put into power, he pledged, his administration would concentrate on lowering interest rates and increasing capital flow. These "anti-populist" measures, according to the former President, are the only way in which the country can be saved. His government would be liberal on political and economic issues, but conservative when it comes to fiscal policy. Speaking at a lunch hosted by the Corripio Communications Group, former President Fernandez said there had been some progress in the country's development over the last 40 years, but that it was still characterized by unacceptable inequalities. Sustainable growth was essential for sustainable development, he added. "Our long term vision is of integrated sustainable development, which is connected to health, education, environment and the people's quality of life, but this will not happen without pre-existing and simultaneous sustainable economic growth," said Fernandez, who specifically highlighted education as a central concern for a future PLD administration. Expressing his belief that the public associates his 1996-2000 government with modernization, he had harsh words for the current government's track record, saying the country was "practically bankrupt" and that the current socio-economic situation was "like a volcano about to erupt." He listed the country's lapsed economic growth, the foreign exchange market's volatility, inflation and the peso's devaluation as the main factors that have led to the impoverishment of the people, elevated interest rates, the power supply crisis and the burgeoning external debt.
The Chamber of Deputies has ratified the introduction of X-ray equipment at all ports of entry to the Dominican Republic, despite strenuous resistance by the business community and the recommendation of the justice committee that the idea be scrapped. The computerized X-ray system would be used to inspect all cargo leaving the country, ostensibly to prevent drug smuggling and human trafficking. The implementation of this measure will be costly and will slow down traffic at the ports to unacceptable levels, according to businesspeople who oppose the measure. The purchase and installation of the equipment will be carried out through a 10-year contract with ICCSA SA, a company belonging to Belinda Galvan de Beauchamps, the widow of former General Beauchamps Javier. The PLD opposed the motion that was passed by 86 votes to 15. The free-trade zone factory owners' association ADOZONA, exporters' association ADOEXPO, the Dominican-American Chamber of Commerce and port workers all believe that the regulation, as well as creating delays, contravenes World Trade Organization policies. Private business association CONEP said in a statement yesterday that "the mechanism will be improper, impractical and extremely expensive", and called for further public consultation before the equipment is introduced. The motion was already approved by the Senate and now passes on to the Executive Branch for signing.
Reports in Diario Libre and El Caribe, citing an AP press wire, attribute to US State Department official Kelly Shannon saying that the confiscation of Executive Branch legal advisor Guido Gomez Mazara's tourist visa was due to an alleged direct link or [one] through relatives to the drug trade and other illicit activities. The decision was based on Section 212a of the US Immigration and Nationality Act, which states that the authorities have a right to revoke a visa if there is reason to suspect the holder, as well as spouse and children of such aliens, has engaged in trafficking of a controlled substance, or has conspired to do so. Susan Emerson, speaking for the US mission in Santo Domingo, confirmed the B1/B2 visa had been revoked in December 2002. At the time Gomez Mazara denied the cancellation and to prove this traveled to San Juan, Puerto Rico. He traveled using his visa as a government officer that has not been cancelled for diplomatic reasons. The United States has canceled over 1,000 entry visas held by Dominicans as part of the intensified security measures since 9/11, says Miguel Vasquez, the Migration Department director. Vasquez refused to say, however, whether any other high profile government officials were included on the list. Earlier, the US mission revealed that President Mejia close aide and security chief, Colonel Pedro Julio (Pepe) Goico's visa had also been revoked and he was declared inadmissible to enter the United States. Gomez Mazara has been a controversial and high profile member of the Mejia administration, especially for his work promoting re-election.
High-ranking government officials in Caracas are saying that the only way the dispute between Venezuela and the Dominican Republic can be resolved is if the Dominican authorities clamp down on the alleged scheme being devised here against Venezuela's President Chavez. Last month Venezuela suspended its oil exports to the DR and withdrew its ambassador, in retaliation for the Dominican government's supposed complicity in Venezuelan opposition activities in the DR. Former Venezuelan President Carlos Andres Perez is a longtime resident of the Dominican Republic and believed to be involved in the alleged assassination conspiracy. Wanted on corruption charges in his country, Perez recently left the Dominican Republic for what was said to be an indefinite period. Deputy Foreign Minister Arevalo Mendez called the predicament "an isolated problem" and said that answers were needed "before the situation could return to normal." He went on to say, "We have to be optimistic, but the solution is not up to Venezuela. We do not want ambiguity. Venezuelan democracy needs that Dominican support." Hoy newspaper quotes Venezuelan deputy Dario Vivas as saying that high-ranking members of the Dominican government, such as Public Works Minister Miguel Vargas Maldonado, have proven business links with Carlos Andres Perez and that the Dominican government had been "permissive" with the activities of Venezuelan opposition on its soil. El Caribe reports that the Dominican ambassador to the Organization of American States (OAS), Sofia Leonor Sanchez Baret, met with Venezuelan President Hugo Chavez yesterday to further an attempt at smoothing over the dispute. Sanchez Baret said after the meeting that Chavez "remains displeased" with the Dominican Republic. She went on, however, to express optimism about the situation, saying that a meeting between the two Presidents was needed to heal the rift. Listin Diario quotes PRD Senator Cesar Augusto Matias as saying that the Venezuelan government is "in cahoots" with the Dominican opposition PLD party to prevent President Hipolito Mejia's re-election. Meanwhile, PLD pre-Presidential candidate Leonel Fernandez is recommending that the government send a "good-will mission" to Caracas to discuss the issue.
UNICEF's Latin America and Caribbean regional director Nils Kastberg, who is in the Dominican Republic to make the rounds of UNICEF projects, said yesterday that the country's maternal mortality rate was "exorbitant". According to United Nations figures, 200 women of every 100,000 die during childbirth in the Dominican Republic. Kastberg said the high mortality rate here, as well as in Haiti, was largely due to "lack of medical responsibility." He advocated greater accountability on the part of public hospital doctors, who he said were often conducting private patient work when they were supposed to be on duty. Haiti's maternal mortality rate is twice as high as that of the Dominican Republic, he said, but both were unacceptable as many countries that are much poorer have better records. The Swedish official identified sexual exploitation of children as a region-wide concern, and said that "the most serious problem on the island of Hispaniola was HIV/AIDS." In order for this to change, there would have to be better handling of statistics, according to Kastberg, who said that high infection rates in some areas were hidden behind averages. "There are too many people who do not speak out", said the UNICEF Caribbean regional director. "The silence that surrounds the illness, the stigma, is what can kill." The Dominican Ministry of Health denies that the figures are so high and Hoy newspaper cites United Nations Population Fund statistics, which provide a lower maternal mortality rate of 150 per 100,000. The government says this number is closer to 80 maternal deaths for every 100,000 births. It admits, however, that 14 doctors have been sent to medical tribunals for alleged negligence.
Writing in Hoy, columnist Donald Guerrero Martinez remarks that it took ten years, three governments, and the death of "the strongman of Navarrete", Joaquin Balaguer, for novelist Viriato Sencion to be awarded the national literary prize he won in 1993. Sencion's was named the winner ten years ago for his satirical novel on the Balaguer years titled They Forged the Signature of God. He was never allowed to receive the prize, however, on the alleged orders of then-President Joaquin Balaguer, who was said to be outraged by his portrayal in the novel. Guerrero had long campaigned for the prize to be presented to Sencion and today expresses his delight at the realization of this event, although he points out that the RD$50,000 prize money is worth considerably less today than it was in 1993.
Power to the Ministry of Sports was supposedly suspended this week. The reason: a pending RD$9.5-million debt with the recently renationalized power distributors. But otherwise, money does not seem to be a problem for that government department. Along these lines, Diario Libre today criticizes the government's announced intention to pick up the US$100,000 bill for a World Boxing Organization professional bout, which it says should be left to the private sector. Sports Minister Cesar Cedeno said the government is very interested in holding the fight here and that he would lobby President Hipolito Mejia to convince him to make the necessary deposit so that junior featherweight champion Joan Guzman could take on fellow Dominican contender Agapito Sanchez on their home turf in Santo Domingo. Cedeno is convinced the fight will win the nation's attention - both those attending the Coliseo Carlos - Teo - Cruz and those following the bout on TV. He feels boxing is on the upswing in the Dominican Republic, especially after winning its second gold medal in the August Pan Am Games held in Santo Domingo. No company has yet proffered the cash to fund the fight that would be held prior to 15 December. Lawyer Peter River of Puerto Rico Best Boxing Promotions that is handling the fight yesterday gave the government 15 days to come up with the cash. River said that if a host is not found for US$100,000, they would auction off the fight for US$50,000. http://www.wbo-int.com/public/NEWS/Stories/Salecaralarevanchaentre.htm
Andy Pettite worked his way out of early trouble, assisted by some solid defence, to put the kibosh on the somewhat improvised Boston line-up and earn his 12th career post-season victory. By the first turn of the Red Sox line-up Pettite had given up 6 hits, a walk and a run, but managed to last into the seventh inning while working out of some early jams. Boston's manager Grady Little continued to exercise some odd strategy with the insertion of a seldom-used Damian Jackson at second base over Todd Walker, who leads the team with 4 playoff homeruns. A dropped line-drive by Jackson allowed the Yankees to load the bases with one out, followed by a failed double play, also by Jackson. This only compounded the loss of leadoff hitter Johnny Damon (reportedly returning for Saturday's game 3 in Boston). Yankee's first-baseman Nick Johnson provided a crucial lift with a second inning, two-point homerun, while Jorge Posado delivered the final blow by batting two runners home with a double in the seventh. Saturday's game is expected to be an all-time classic as former Red Sox and six-time winner of the Cy Young award Roger Clemens makes what could be his final career start in a match-up against Pedro Martinez at Fenway Park (4.18pm EST).
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