"Transparent and competitive" are the words used to describe the proposed sale of shares the government holds in the power companies, including the recently reacquired "Edes". The only companies not included in the sale are the hydroelectric companies. President Hipolito Mejia announced Decree 1035-03 yesterday, which sets the ball rolling for the eventual sale of the companies through the formation of a Special Electric Committee that will spend the next 90 days studying the legal reforms needed in order to allow the sale. The committee is headed by businessman Rafael Perello Abreu, president of the state power company CDEEE, and its council of directors includes Francisco Garrigo and Jack Zares. The committee will also include representatives from private business association CONEP and the engineers' association CODIA. The government would hold on to 25% of the shares of each company involved and is open to seeking advice from the Inter-American Development Bank and the UASD (Autonomous University of Santo Domingo). This decision comes one month after the government unexpectedly announced its reacquisition of the Union Fenosa power distribution companies, which led to the freeze on disbursements from the World Bank and the IDB and left the IMF standby agreement on hold. The President described the reacquisition as an "urgent and temporary" measure in reaction to the unsustainable financial situation the companies were operating under. He said that the situation in the power sector has worsened since the previous government capitalized the state electricity companies. "It has been demonstrated that the inter-sector dependency model has not met the power sector's objectives, which in many cases has deteriorated," said President Mejia, who reminded that the private sector also has an important role to play.
The business community has agreed to make monthly contributions of RD$325 million until February 2004 as a way of helping the government ease the effects of the current economic crisis and to raise the funds needed to resurrect the standby agreement with the International Monetary Fund, which has been paralyzed for the past month. The Free Trade Zones will pay RD$150 million, the tourist sector RD$125 million and exporters RD$50 million, on a monthly basis. Elena Viyella de Paliza, president of the private business association CONEP, said, "We have carried out a cost-balance and are taking on a shared responsibility to restore confidence and change current expectations... The country is in a crisis of large proportions and for this reason we have undertaken this commitment, which complies with the IMF's requirements, in order to relaunch the agreement." This latest move by the business community is to be included in a new "national pact for stability", due to be signed by the government and other sectors of civil society. The authorities will still need to find other ways of raising the RD$600 million it seeks for the resumption of the IMF agreement. Finance Minister Rafael Calderon said that the additional funds would have to be obtained in a way that has the least effect on the most vulnerable sectors of Dominican society. The Diario Libre in its main editorial column says, "No matter what people say, the Dominican business community is genuinely concerned about the economic situation. Even if their motives are not patriotic or disinterested, it does not matter." The state, says the writer, is bankrupt, and this crisis affects everyone in one way or another. The editorial applauds the business community's decision, saying that they have shown that they are above those who criticize without offering solutions.
President Hipolito Mejia said yesterday that the funds needed for ailing state hospitals would be made available immediately. This comes in reaction to a report in yesterday's Hoy newspaper that the Pearl F. Ort burns unit at the Dr Luis Eduardo Aybar Hospital was under threat of closure due to lack of financial support. The paper's main editorial column today speaks about these victims of the economic crisis and lists other hospitals, such as Santiago's Jose Cabral y Baez, in serious need of resources to keep up with its patients' demands. "It is a contradiction in terms that when the country is just about to embark on an advanced social security scheme, public health services should suffer the sort of degradations that are the completely contrary to real social assistance." The government must act, concludes the writer, "to change the ending of this drama".
Motor vehicles and household appliances top the list of items for which demand has fallen steeply when compared to last year. Importers believe that with the latest increase in the exchange rate commission on imports, this situation is only likely to worsen. "The general situation in the country has meant that sales are very slow. In many cases, prices have gone up to levels that the Dominican consumer cannot afford. Just when we thought there was going to be a truce, we are faced with the increase in exchange commission," said the importers' association president, Andres Dauhajre Sr and predicted further price hikes of 7-10% on consumer items. The three main factors making life difficult for importers are the unstable dollar-peso exchange rate, the dismal power-supply situation, and the "unfavorable political climate" for business, according to Dauhajre, who is also the president of UNE, the national business union. He believes that the government should concentrate taxation in three or four main areas, instead of what he described as "hundreds of atomized taxes that only serve to decelerate the process, cause inefficiency and increase public-sector bureaucracy." Dauhajre acknowledged that the country was going through difficult times and that the business community had to play a part in helping alleviate the situation, but he called on the government to set an example by cutting down its own public spending.
Business leaders and economists have called on the government to take urgent measures to stem the devaluation of the peso, which yesterday had a value of as little as RD$37.50 to US$1. According to them, the government should introduce austerity measures and make genuine reductions in its public spending, with the supervision of civil society representatives. They also called on the government to get the standby agreement with the IMF back on track and begin the process of tributary reform so as to dispel doubts regarding the sustainability of the income budget and the public spending laws for 2004. Economist Eduardo Tejera said that a reactivation of the IMF accord "is essential to end the crisis and restore confidence." He suggested that the public and private sectors meet urgently to discuss the crisis and accused the government of holding back information about the extent of the problems, especially in terms of the fiscal deficit and international obligations. Tejera said that there should be greater coherence in the government's economic advisory team, which appeared to be divided, and that the President should give all his time to addressing the current crisis. Economist Rolando Reyes agreed that the IMF agreement must be salvaged, but believes that fiscal change should go beyond tributary reforms: "No tributary reform will bring about the sort of income necessary to cover costs for 2004."
Leading members of the Socialist International (IS) organization are expected to arrive in the Dominican Republic next week in order to help resolve the internal dispute in the ruling PRD party, according to reports in today's papers. Former Spanish head of government Felipe Gonzalez and former Argentine President Raul Alfonsin will form part of a delegation, headed by SI general secretary Luis Ayala, and Gustavo Caraja. The decision was made at a recent meeting of the SI in Mexico, said PRD party vice-president Ivelisse Prats de Perez, who appeared on a television interview on the "Revista 110" program on Channel 13 yesterday. Prats de Perez said that the party leadership had a "distorted perception" of what was actually happening in Dominican society with regard to the economic problems people are experiencing. While maintaining that President Hipolito Mejia was not responsible for the country's economic woes, which she attributed to "external factors", Prats de Perez conceded that "in the collective public consciousness the President is to blame." She attributed this notion to the individualistic and Presidential culture that ascribes everything, positive or negative, to the President. The Socialist International is the worldwide organization of social democrat, socialist and labor parties. It has 141 member political parties and organizations from all continents, including the Dominican Republic's PRD party.
Orlando Gil, writing for the government-intervened Listin Diario newspaper, says that the PRD is being swamped by mediators, most of whom have their own political agenda. The party should learn, says the commentator, that political differences must be sorted out by political means, and he called for a vote at a party convention. The real problem is ambition and power, continues Gil, and the reluctance to submit to a popular vote means that the candidates are engaged in an "endless race". It is strange, he concludes, that with all the evidence against them, in the shape of opinion polls and the recent plebiscite, still the PRD does not see that an attempt at fielding the same team for the next elections would be a recipe for disaster.
It has come to light that a former naval systems engineer, Gustavo Isidro Zayas, whose death was announced yesterday, was killed under mysterious circumstances about which the police are reluctant to comment. Zayas, who was retired from the Dominican navy, was once the assistant to Presidential aide Martin Abreu Pimentel, who was killed outside the Trio Cafe in May 2002 in a drug-related incident. Zayas himself had recently been undergoing rehabilitation treatment for substance addiction. The newspapers are reporting that Zayas' last words were "no-one gets me out of my house without an attorney", as he was shot by a group of men who arrived at his house in a dark-colored SUV in the early hours of Sunday morning. The men apparently were posing as DNCD (drug enforcement) agents, leading some to believe the incident was a bungled attempt to kidnap their victim. The 37-year-old man lived comfortably in the Gala district of Santo Domingo, but was said to fear for his life, employing the protection of up to eight bodyguards. Not all of them, however, were on duty on Sunday.
The latest aftershock of the 22 September earthquake hit Santiago and Puerto Plata at 6:35pm yesterday, measuring 4.7 on the Richter scale. Although no damage has been reported, Radhames Lora Salcedo, the director of the Civil Defense and president of the Emergency Operations Center, said that the shocks are likely to continue and so people should "develop seismic awareness." This latest tremor was the third strongest since 22 September. As many as 300 aftershocks have been recorded, most of which were minor.
Dominican universities are celebrating their graduation ceremonies this week, and the statistics show that women are not only making up the majority of students and graduates these days, they are also achieving the highest results. The country's main university, the State-run Autonomous University of Santo Domingo (UASD) celebrated its largest-ever graduation, with 2,106 newly-graduated professionals. Eleven students graduated Magna Cum Laude and 114 Cum Laude. Of these, 81 were women. Listin Diario's main editorial congratulates the UASD, which is the descendant of the first university in the Americas, on its 465th birthday. The PUCMM University in Santiago has awarded prizes to its 13 outstanding medical and nursing students, 12 of whom are women.
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