Diario Libre reported on Saturday that the Mejia government owes the state commercial bank Banreservas a sum of RD$12 billion, RD$3 billion of which was lent to the farming sector. The government owes other commercial banks RD$6.4 billion, amounting to a RD$18.4 million debt - almost three times the level of debt with domestic banks inherited from the Leonel Fernadez' administration in 2000.
President Hipolito Mejia distanced his government from the economic crisis that has beset the country, as he spoke on the "Una vez a la semana" program broadcast on the state TV station, Channel 4. As reported in Hoy newspaper, the government attributed the current economic difficulties to problems beyond its control - namely the collapse of three national banks, problems in Venezuela, the wars in Afghanistan and Iraq, and the 9/11 terrorist attack in the US.
President Hipolito Mejia will visit Panama, Bolivia and Brazil and participate in two summit conferences of Latin American and Asian chiefs of state. Meetings with US officials are also on the agenda. Next Monday the President will travel to Panama to meet with leaders from Asia, Central America, the Caribbean and attend Panamanian Independence Day celebrations
The vice-president of the Chamber of Deputies is pushing a bill that would eliminate the Dominican Municipal League, the bureaucracy whose only purpose is to serve as an intermediary between the central and city governments. PRD deputy Manuel Sanchez Carrasco, the main promoter of the bill that will be presented to the Chamber this week, says that the organization has no reason for being because the city governments control the budgets they receive. The organization was created in 1939 during the Trujillo dictatorship. Today, most municipal governments are in the hands of PRD mayors. The president of the Municipal League, Amable Aristy Castro, is from the PRSC and is regarded as one of the most powerful men in the eastern region. His daughter is the mayor of Higuey.
Marisol Vicens, the president of the National Association of Young Entrepreneurs (ANJE), warned that the increase in the exchange commission for dollars used on imports, as recently approved by the Monetary Board, was in violation of the Monetary Code. She said that ANJE would take the case to the Supreme Court.
The much-debated 5% surcharge on exports is still alive and well, according to Rafael Calderon, the Minister of Finance. According to Daniel Garcia from El Caribe, various sectors of the economy had not yet recovered from the 5.25% hike in the exchange commission when the Calderon announced that the 5% surcharge on exports would this week enter into effect. The industrial free zones will be asked to give the government money in other ways. According to Calderon, the government and the export sector arrived at an agreement last Friday. Horacio Alvarez, the head of the Dominican Association of Exporters, told reporters that his group, while willing to fulfill their obligations to the state, is not willing to pay 5% or any lesser sum up front, as this would siphon working capital from many businesses. He told the press that the exporters had already paid RD$95 million in taxes during August and September. Members of the exporters' associations and the Finance Ministry's economic team will meet today to hone the agreements. This voluntary agreement ignores the fact that the Supreme Court declared the 5% surcharge
Economist Bernardo Vega came out and said it: The best thing for this country is that the US Congress does not approve the Free Trade Agreement with Central America and the Dominican Republic right away. In his opinion, the protectionist sentiment in Washington, especially during an election year, is a negative factor. Vega considers this agreement to be the most important in the history of the Dominican Republic and suggests that it not be hurried. He would prefer to wait, as by the end of the year the details of the Central American accord will become clearer and the structure to remove tariff barriers, in terms of how many years, will also become clearer. He says the Americans are insisting on maintaining their agricultural subsidies. The former ambassador, well versed in history and economics, says that he has never seen a country negotiate a free trade agreement in the middle of an electoral campaign. Vega hopes that by January 2005 things will have improved, and he believes that Washington will perhaps have reached an agreement with the European community regarding agricultural subsidies. The Dominican Republic will have a better notion as to whether or not there is any alternative to entering the US market by way of the ALCA, in spite of opposition from Brazil and Argentina. Finally, Vega warns of possible pressures from Democrats in the US Congress in the areas of labor and the environment, and who may be less flexible than they were with Chile and Singapore. He ends by pointing out that congressional approval to see the deal through will cost us more than if it isn't approved, as a lot of investment would then head to Central America. Calling the negotiations "a dead end street", he fell back on an old saying: "Damned if we do and damned if we don't." Worse yet, in the middle of an economic crisis that may turn political.
Fitch Ratings, the international rating agency, joined Standard & Poor, Morgan Stanley, Moody's, the Economist Intelligence Unit, Bear Stearns and other international agencies that monitor the performance of countries with bonds placed in international capital markets, giving a thumbs down to the performance of the Dominican economy. The agency demoted the Dominican Republic's foreign and local currency obligations to 'B" from "B+", and reports a Rating Watch Negative outlook. According to the agency, "The action reflects liquidity concerns due to continued pressures on the sovereign's slim foreign exchange position." Fitch is also concerned about the availability of multilateral funding over the coming year, due to what it describes as unresolved issues in the electricity sector regarding the Union Fenosa buyback deal. Fitch points out that "with US$504.3 million in public sector medium- and long-term debt amortizations due next year, the Dominican Republic can ill afford to lose multilateral financing." For more details, see http://home.businesswire.com
The Listin Diario reports that the mediation team within the PRD party is trying to bring about a party summit with President Mejia in attendance. Commission member Tirso Mejia Ricart told reporters that a suggestion made by Rafael Subervi Bonilla, one of the potential candidates, was accepted by the commission and the PPH faction expressed its desire to attend. Eligio Jaquez, the PPH leader, however, accused party president Hatuey De Camps of "boycotting" any possible agreement to call for the party convention.
Although the Public Works Ministry says that the dredging of parts of the Boca Chica beach area is not harmful to the ecology, the Environment Ministry has ordered a stop to the activity. According to the Diario Libre, several people have been jailed for financing the project and Hoy newspaper says that the Attorney General for the Environment, Jose Antonio Trinidad Sena, pulled the plug on further dredging and arrested the owner of the Boat House restaurant. He also closed five other businesses in the area. Representatives for the Public Works Ministry said that the work had been approved by President Mejia and that environmental precautions were being properly observed. Trinidad Sena told reporters that the work was not cleared by any permits from his ministry, as is required by Law 64-00.
The United States returned 64 convicted criminals to the Dominican Republic after having served their jail sentences. The Listin Diario reported that the 64 were residents of New York, Boston, Philadelphia, Brooklyn and New Jersey. They had all been convicted of felonies and their return brings the total number of such cases to 3,165 so far this year.
Over the weekend and in today's El Caribe, reports emerged that a multinational drug company is testing an anti-diarrhoea vaccine in countries that include the Dominican Republic. The tests are being conducted by Glaxo Smith Kline Biologicals and seek to test the efficiency of the vaccine against the human rotavirus, which has caused millions of infant deaths. In the Dominican Republic, 1,400 infants between 6 and 12 weeks old are participating in the study. El Caribe questions, however, whether the parents of the children are being completely informed as to the possible effects of the clinical study. The president of the Dominican College of Medicine (formerly the Dominican Medical Association), Severo Mercedes, told reporters that he became aware of the testing through the newspaper. According to him, any such study would have to include the participation of the CMD. The tests, however, have already begun - and not without some controversy. Apparently, a similar version of the vaccine was approved for use in the United States, but was withdrawn from the market when intestinal blockages requiring surgery occurred in several instances. The resulting malady, called "intestinal invagination" is a serious and life-threatening obstruction of the intestine. While only two cases have been reported, according to El Caribe, they were sufficiently significant to merit further studies. El Caribe says that while the documentation is very complete, it does say that there is one chance in 2,000 to 5,000 that this obstruction will occur. Parents of the children included in the research are told to take the child to the Robert Reid Children's Hospital should any diarrhoea occur. The full story is on Page 2 of El Caribe. http://elcaribe.com.do
Marlins pitcher Josh Beckett and two Dominicans are credited with the Florida Marlins win of the World Series in Game 6 on Saturday over the favorite New York Yankees in the Yankee Stadium of the Bronx. Second baseman Luis Castillo's single with two men on bases in the 5th inning led the Marlins to lead 1-0. The second run of the game was scored when fellow Dominican Juan Encarnacion hit a sacrifice fly to right, scoring Jeff Conine to push the score to 2-0 in the sixth. See: http://mlb.mlb.com/
The contents of this webpage are copyright © 1996-2008. DR1. All Rights Reserved.