| Daily News - 6 November 2003 |
Hoy newspaper reports that economist Eduardo Tejera and business leader Celso Marranzini have issued calls for the government to ensure that the dollar exchange market not be subject to manipulation by speculators. The rate fell slightly below the record RD$40-to-US$1 mark yesterday to RD$39.50, in reaction to the news that negotiations with the International Monetary Fund were to resume. Tejera described a situation whereby a handful of people could be controlling the dollar-peso rate by withholding dollars from the exchange market and that the exchange rate sector was badly in need of reform. Hoy also quotes businessman Quirilio Vilorio Caminero, who said that the government should enforce the rule that forbids exchange houses to retain currency for more than 24 hours. He asked why these few individuals were allowed to profit from the situation, while the general public was suffering such a decrease in purchasing power. Celso Marranzini, for his part, said in a television interview yesterday that exchange houses should be obliged to sell their remaining dollars to the Central Bank at the end of each day's trading. Such a proposal already exists, but is not in effect. The measure would stabilize the exchange rate, said Marranzini, and lower the price of the dollar. His formula for restoring macro-economic stability is fiscal reform: "Economic policy cannot go on consisting of 'one step forwards two steps backwards.'"
The business community has expressed surprise at the Senate's approval of the 5% tax on exports. Groups such as CONEP (private business association) and ANJE (young entrepreneurs' association), who had agreed to the monthly flat-rate "solidarity contributions" to the government in an attempt to ease the effects of the economic crisis, said that they could not take on both commitments. El Caribe claims to have copies of documents outlining the agreements between the government and the export sector, free trade zones and tourism sectors, which denote that the contributions would be conditioned to the government abandoning any plans to introduce charges such as this latest tax. The International Monetary Fund has also expressed reservations regarding the 5% tax on imports and the Supreme Court had declared its introduction "unconstitutional", although this verdict was based primarily on the way it was originally imposed - by Presidential decree - without going through the correct legislative channels. In response to questions on the tax that had been pronounced dead by exporters' association (ADOEXPO) president Samir Rizek just last week, CONEP's president, Elena Viyella de Paliza, said, "Either one or the other, but not both." ANJE's vice-president, Manuel Diez, pointed out that the 5% tax had proved to be an inefficient means of raising revenue during the two-month period it was in effect. Business leader Celso Marranzini said that this sort of action only served to diminish economic confidence in the government. Finance Minister Rafael Calderon maintained that there was "no contradiction" between the export tax and the "solidarity contributions". He said that the tax would be calculated with the contributions being made by each sector in mind. These donations, he explained, were aimed at helping the government comply with the IMF standby agreement's requirements. Meanwhile, FINJUS (Foundation for Institutionalism and Justice) has taken another recent tax hike to the Supreme Court - last month's increase in the exchange rate commission on imports, which was raised from 4.75% to 10%.
All four main morning papers carry editorial commentaries focused on the resumption of the International Monetary Fund (IMF) negotiations with the Mejia administration. The government-intervened Listin Diario says that this news "revives the hope that the country will soon be able to return to its normal economic activity." The writer also states that the reacquisition of the "Edes" - the reason for the suspension of the process - was the government's only option and is irreversible. The IMF has to understand, says the writer, "that all that glitters is not gold" and that external investment is not always the best solution in these cases, when "foreign capital meets corrupt public servants and the national interest is sacrificed at the expense of personal gain." Listin's editorial continues: "The only type of foreign investment advantageous to Third World countries is the sort that has the dual objective of increasing profit and promoting the healthy development of the recipient nation." According to the commentary, this should be obvious to a major international organization and they should understand why the government bought back the "Edes" from Union Fenosa. The "solidarity contribution" gesture by the business community is a positive sign, concludes the writer, and once the IMF funds come through, everyone can pull together to find viable solutions. Hoy newspaper greets the news of the resumed IMF process with optimism, also citing the announcement from the Inter-American Development Bank and the co-operative spirit of the business sector as good omens for the ailing economy. "Now that our problems have been put in the hands of the IMF, the best we can do is submit to their measures, without falling into the trap of the sort of fooling around which could jeopardize its future," declares the writer. The editorial ends by saying: "The country deserves a break and should start freeing itself from the grip of so much uncertainty." For its part, El Caribe advises the government to do all it can to restore lost credibility. The resumption of the IMF process is a first step in that direction, it feels, but there are others that should follow, if the public is to believe they are serious about the problem. The editorial lists the following pieces of advice: all Presidential pre-candidates, including the President, should remain silent until January, no new taxes to be implemented, tax reform to be effected, frugal and sensible budgetary planning, and, perhaps the most challenging, a workable agreement with the power sector. What the nation needs, concludes the writer, is "an end to uncertainty and the return of hope." Finally, Diario Libre also calls the news of the IMF's return to the negotiating table "a good sign". It urges transparency and a constant flow of information in order to restore confidence. "We would like to think that differences will be overcome shortly and that there will be an announcement that the standby agreement has been re-established. Then we shall see what happens to the exchange rate."
This morning's Diario Libre reports that the Central Bank has had to reassure depositors that the economic stabilization program agreed to with the International Monetary Fund would not include measures that would affect or restrict their savings, nor damage either the capital or the interest. The CB said in a statement that "protecting depositors' rights is sacred and fundamental and will not be weakened by measures that threaten these rights."
President Hipolito Mejia now has three pre-candidates on board for the planning of the proposed PRD party convention to select its Presidential candidate. Yesterday's summit meeting was attended by rival pre-candidates Vice-President Milagros Ortiz Bosch, party secretary Rafael "Fello" Subervi Bonilla and Enmanuel Esquea Guerrero; party president Hatuey Decamps, Ramon Alburquerque, Rafael Abinader and Rafael Flores Estrella did not take part in the meeting. Ortiz Bosch, Subervi Bonilla and Esquea Guerrero demanded that Mejia show his willingness to negotiate the 14 agenda points not covered in the meeting, making this a precondition to any future meeting. The key points not covered were the "50% + one vote" election principle and the rule that would allow the pre-candidates opposed to re-election to combine their totals behind the one with the largest share of the vote. Mejia refused to discuss these points at yesterday's gathering, which took place behind closed doors and was reported to be "calm". The newspapers report that certain members of the PPH (Proyecto Presidencial Hipolito, movement for the President's re-election) were present, including Eligio Jaquez and Vicente Sanchez Baret, although they remained in the lobby, shouting "Convention! Convention!" as the pre-candidates emerged from the meeting. Milagros Ortiz Bosch told waiting reporters that "where there is intelligence, there is a solution." Diario Libre's Anibal de Castro feels the pre-candidates have varying aspirations "Nothing," he said, "creates more loyalty than the public payroll," - as if the President's rival pre-candidates didn't know it. Because of this, Mejia is "referee, judge, ball owner, team owner." Despite his government's catalogue of disasters, "Hipolito aspires to do one thing," said de Castro. "And so do the rest of Dominicans - to stay alive until 16 May."
As reported in today's Listin Diario, PLD Presidential candidate Leonel Fernandez said yesterday that the eyes of the world would be on the Dominican Republic on election day, 16 May 2004. He said that victory was assured for his party, which has placed well ahead of the current government party and the other opposition party, the PRSC, in all recent opinion polls. "There is no way the trend can be reversed. It is consolidating and strengthening the resolve of the many components of Dominican society." Not even electoral fraud could stand in the way of his party's victory, according to Fernandez, although he called for international observers to be present at next year's election. "No one can mess with the Dominican people's peace and stability," declared the former President (1996 - 2000), speaking at the launch of the PLD's national campaign headquarters on Santo Domingo's Ave. Churchill. Nevertheless, Fernandez cautioned against complacency, warning party supporters "not to sit on their laurels, but to get out and work for victory as if we were in a distant third place. The PLD will not celebrate victory until the last vote is counted."
The sale of domestic propane gas, used in households for cooking and to power certain motor vehicles, has been suspended for three days now. Most of the country's supply stations remain closed and the reason for this is the government's apparent failure to pay the RD$500 million owed in subsidies to the importers. Yesterday saw a desperate rush by domestic consumers, as well as many "publico" (shared taxi) drivers, who have converted their vehicles to run on this relatively inexpensive fuel. This situation could cause a significant number of transport vehicles to remain off the road until supplies return to normal. Transport union CNTU president Ramon Perez Figuereo accused the authorities of withdrawing supplies in an attempt to force a consumer price increase. He said it would not be the first time that this has happened, and called on the government to take immediate action to guarantee the gas supply to the public. The few supply stations still operating were swamped with demand, with some customers arriving as early as 5:00am to stand in line, according to reports in the papers. The government had promised to keep the retail price of gas at RD$25 per gallon, with compensation to the wholesalers and importers for any discrepancy. The current cost to the suppliers is over RD$30 per gallon.
In an illustration of how the economic crisis does not really hit until it begins to hurt the rich, Diario Libre's Adriano Miguel Tejada describes the reactions of horror to the news that the capital's most exclusive gyms have had to raise their monthly membership fees by about 60%. "Emergency!" cries the headline, informing that one politician reacted by calling for legislation to increase his salary, so that he and his colleagues could cover "this basic necessity of keeping their bodies in shape, so they can look good on television." Another politician, described as a "Don Juan", is quoted as saying it is an "abusive" measure, and evokes the picture of a rich woman alighting from her Mercedes Benz, sporting a Luis Vuitton purse, "very, very expensive" sunglasses and all her jewelry, exclaiming, "This country is no place to live anymore!" On observing this scene, a worker, sweating profusely, shrugs his shoulders and takes a philosophical view: "I've got problems! With the price of food these days no one will need to go to the gym to lose weight!"
At least 73 people have died of hemorrhagic dengue fever this year, according to the national epidemiology institute. Director Luis Lara said that although the cases still need to be investigated in order to confirm the cause of death, the mortality rate seemed high. He felt the number of cases and consequent deaths to be "worrying, but not alarming," and advised people to be watchful for symptoms, which include fever, aching head and body, bleeding gums and nosebleeds, and blood in vomit. Anyone displaying such symptoms should be hospitalized immediately, said Lara. He described the situation as an outbreak rather than an epidemic. This year 4,430 cases of dengue fever have been reported in total - twice as many as in 2002. The reported cases of hemorrhagic dengue have also risen, from 78 last year to 189 so far in 2003.
The Dominican Republic's female volleyball selection lost to Brazil at the world championships in Nagoya, Japan. In a five-set match in which the Dominican women put up a valiant fight against their Brazilian rivals, the final scores were 17-25, 25-18, 24-26, 26-24 and 15-7. The highest scorer was the DR's Yudelkys Batista with 23 points, while Brazil's Paula Pedequeno scored 20 for her team. The Dominican team has lost three games and won only one in the tournament so far.
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