The IDB (Inter-American Development Bank) released US$100 million to facilitate social programs in the Dominican Republic. According to El Caribe, these funds will lessen the adjustments to be made by the lowest income groups in the face of the IMF agreements. As Technical Affairs Minister Carlos Despradel and Central Bank Governor Jose Lois Malkum made the announcement, Despradel explained that the IMF accepted the release of the US$100 million because the country needed fresh resources and the international organizations understood that when a country embarks on a program like the one designed by the IMF, it must obtain money to carry out social plans to soften the blow to the poorest citizens. Finance Minister Rafael Calderon said the money had already been allocated to the following sectors: agriculture, health, education, water supply, and electricity provision. The US$100 million is part of a US$200-million loan to aid the government's social assistance schemes. Disbursement of the funds had been frozen by the IDB and the IMF after the Dominican government decided to reacquire the electrical distribution companies EdeSur and EdeNorte. Negotiations with the IMF are scheduled to resume today.
In advance of today's national protest, security forces carried out extensive vehicle checks over the weekend in search of weapons and other items like tires, traditionally burned in protests. The army claims to have confiscated 89 pistols, 18 revolvers, 12 rifles and 410 knives, as well as over 5,000 vehicle tires. Over 600 people have been arrested, including as many as 20 organizers, according to media reports, while other organizers have threatened to extend the protest past Tuesday. Although it looks as if the demonstrations will be widespread, trade unions are reported to be divided in their support. A leading transport union, CONATRA, has said it will not participate. Support for the protest has come from all quarters, including all three main political parties. PRD party president Hatuey Decamps said he felt the protest was justified and called on the authorities to show restraint in their policing of the demonstrations. Eulogia Familia, who leads the PRD's trade union front, said, "We identify with the demands because PRD supporters are also affected by the crisis." Both the PLD and PRSC opposition parties voiced their sympathy for the protest. Cardinal Nicolas de Jesus Lopez Rodriguez and other senior Church leaders have given their tacit support to the action, saying that the Dominican people have plenty to protest about, and that people have the right to express their discontent in a democracy - "even an imperfect one", as long as it is done peacefully. Business leaders, such as private business association CONEP president Elena Viyella de Paliza, also endorsed people's right to voice their dissent, as long as it was peacefully done and within the law. Speaking in Santiago yesterday, President Hipolito Mejia called on the participants to protest peacefully: "This strike must maintain absolute respect for private property, human dignity and human life." He went on to say that he understood the motives, because the problems that the country has faced are not insignificant, but listed the reasons as follows: "Oil price rises, the situation in Iraq and Afghanistan, the Twin Towers... We have faced all this with courage."
Tuesday's editorial writers call on the population to keep their protests peaceful. Diario Libre reels a long list of reasons for the protest and ends by saying: "That's fine, but let it be done peacefully." Miguel Guerrero in El Caribe writes that this strike will put the authorities to the test by acting as a measure of the government's popularity and the restraint of the security forces as they face the demonstrators. He remarks that the fact it should take place at the end of a long weekend can only harm productivity and the national economy. He concludes by saying that the country cannot afford to descend into chaos. "The nation hopes that the day will go by peacefully and that we will not have to mourn any tragedies." The government-intervened Listin Diario says in its main editorial that strikes and protests are not the solution at a time when the government and business sector are working to find a way out of the current crisis. It says that Dominicans should have matured since the days when demonstrations ended in bloodshed, and what is needed now is dialogue. It applauds the groups that have decided not to take part in today's action, and ends by calling on the police to show restraint, even if provoked. Hoy warns that today's demonstrators could be manipulated to favor higher political or economic interests, and that for this reason the protests must remain peaceful. "We have a challenge ahead: to solve our problems in a civilized manner, respecting institutionalism, the Constitution and the law. This goes for the government as well as the governed. And especially for those who organize protests in demand of our rights and the improvement of our quality of life." The day of protest is being organized by an alliance of popular and civil society organizations and trade unions, in remonstration to the electricity crisis, price rises, the International Monetary Fund and the government's economic policies.
President Hipolito Mejia accused the PLD of bankrolling today's scheduled protests - a charge they deny - and said that the opposition party could win next year's Presidential election if they engaged in fraud. In a scathing attack on PLD leader Leonel Fernandez' suggestions that the PRD would themselves engage in electoral fraud, Mejia said that Fernandez was trying to discredit state institutions like the Supreme Court and the Central Electoral Board (JCE), and was not interested in these institutions, "but in his ego, without reason, because he hasn't done anything." He went on to say that Fernandez, who served as President between 1996 and 2000, had taken office then by fluke ("por carambola") and that "to hear him speak, you would have thought he had invented hot water."
President Hipolito Mejia warned the business community that he was not open to suggestions regarding the local economy. These statements came after the president of the National Council of Private Business (CONEP), Elena Viyella de Paliza, announced that her group felt the program of voluntary contributions to the government and the new exchange commission should substitute any new tax initiatives. Mejia said he did not accept the "unfounded statements of CONEP" and that his government was readjusting its expenditures and following fiscal policy to a tee. Mejia complained that the business community was placing conditions on their voluntary contributions, now that the 5% surcharge on exports has been expedited through Congress.
Late Friday night, on the eve of a long weekend, the authorities chose to break the news that senior Bancredito executives are being accused of a RD$20-billion fraud. Central Bank Governor Jose Lois Malkum announced that warrants were issued for the arrest of Arturo Pellerano of Bancredito and Felipe Mendoza of Grupo Financiero Nacional. Pellerano is also the owner of Omnimedia, which publishes Diario Libre newspaper and weekly news magazine Rumbo. It has been public knowledge for several months that the bank had been experiencing trouble, but fears were allayed earlier this year with the purchase of Bancredito by the powerful Leon Jimenes Group. According to Malkum, it was during the transfer of Bancredito to Leon Jimenez' Banco Profesional that the executives were discovered to have made an attempt to cover up information. The accusations include the operation of a clandestine dual banking system, similar to the system allegedly run at the collapsed Baninter. President Hipolito Mejia responded by saying he disagreed with the decision to arrest the executives, and his stance was supported by District Attorney Maximo Aristy Caraballo. Speaking on Sunday night's "Una vez a la semana" program,, Mejia said he had ordered the DA to delay the arrest until he (the President) had the chance to study the writ and to take the advice of legal experts. The papers today speculate that the government could be planning to intervene in some of the companies connected to Bancredito. Finance Minister Rafael Calderon said that if such a move were made, it would be in consultation with the International Monetary Fund.
The new judicial action surrounding the Bancredito case has given rise to differing and controversial opinions among government officials. Julio Cross, the Banking Superintendent, said in Hoy newspaper that the start of the judicial process would facilitate the signing of the IMF accords. Cross explained that the IMF frowns on perpetrators of this type of fraudulent banking remaining immune from punishment. The lawyer for the Dominican State, Artagnan Perez Mendez, told reporters from Hoy that only the Justice Ministry can stop the judicial process that was begun against Juan Felipe Mendoza and Manuel Arturo Pellerano. Both men are accused of mishandling RD$20 billion. When Perez Mendez was asked about President Mejia's statement that he had stopped the process in order to have it reviewed, the feisty lawyer told reporters that "neither the President nor any other power can do that." The government's lawyer told reporters that he felt that the President had probably not had time to read the full content of the 29-page indictment, as it had only been placed in the District Attorney's office that afternoon. The District Attorney for the Santo Domingo had ordered that both men be arrested. Julio Cross told reporters that the IMF will see the judicial process as part of a healthier banking system, as the international financial organization will want to assure itself that the Dominican Republic's bank system is stronger since the collapse of three banks. Rafael Molina Morillo, in his column "Mis buenos dias", says that he is waiting for someone to explain the situation to him. How can the President stop a judicial order for the arrest and imprisonment of two bankers accused of violating the law? Where does the chief of the Executive Branch find the authorization to stick his nose into affairs that are the competence of other branches of the government? Where does the law say that the President should "study the indictment"? Molina Morillo calls the imbroglio an "abuse of power" and asks why the District Attorney and the Attorney General have not said a word about the case. The editor says that in a modern era of Dominican public administration, there have been very few cases of officials resigning over principles and self-esteem. He says that he does not know what the magistrates are thinking of doing in this case. where their functions are being usurped. Writing for Monday's Listin Diario, under a quote from Jose Marti ("Neither injustice nor privileges"), Ana Mitila Lora comments that it is strange that the President does not appear to be au fait with the Bancredito situation, which has been unraveling for some months since the Central Bank had to inject millions of pesos to save it from collapse, followed by the announcement that the E Leon Jimenes Group would step in. At the same time, says Mitila Lora, "There should be some independence between State institutions and it is justice in this case that has to act." She goes on to say that if the executives in this case, who are suspected of massive fraud to the tune of RD$20 billion, are not detained, the accused in the Baninter case should also be set free, along with many others accused of lesser crimes. Mitila Lora ends by saying that if Mejia's wishes are granted, the CB governor, the superintendent of banking and the lawyers in the case should all resign. "Let us hope that institutionalism is respected and that all Dominicans are measured by the same yardstick."
President Hipolito Mejia and three of his anti re-election rivals, Milagros Ortiz Bosch, Rafael "Fello" Subervi Bonilla and Enmanuel Esquea Guerrero, celebrated with a champagne toast on Friday, having agreed to face each other at a party convention no later than 15 December, at which time the party's membership will select its Presidential candidate for the 2004 elections. The winning candidate will have to attain 50% + one vote, or else be the candidate with the greatest percentage, should he or she manage to combine their tally with one or more of the other pre-candidates to form a decisive majority. This follows months of bitter disputes in the ruling party, which at one point saw the President pitched against seven rival pre-candidates. The remaining four candidates opposed to the President's re-election plan are Hatuey Decamps, Rafael Abinader, Ramon Alburquerque and Rafael Flores Estrella.
The price of premium unleaded fuel went down to RD$69.04 a gallon as of last Saturday, while regular has gone down to RD$61.60. Diesel, however, has gone up to RD$47.03 a gallon.
Diario Libre reports that for the second time in a month, US credit risk assessors Moody's have reduced the Dominican Republic's rating, due to the persistent macroeconomic uncertainty in the context of low currency reserves. The country's long-term debt and local and foreign currency risk rating has gone down from B1 to B2, the fifteenth ranking on a scale of 1 - 21. Risk rating for banking deposits has gone down from B3 to B4, according to Moody's. "A weak economy and a tight external liquidity position will continue to hinder the authorities' ability to manage economic policy. Moreover, the problems in the energy sector are complicating the government's relationship with international financial institutions." Moody's believes the government will face serious challenges ahead unless a firm agreement can be reached with the International Monetary Fund.
Most of the North of the Dominican Republic continued to suffer prolonged periods without electricity. The joke is some areas was: "No blackouts here! Why not? 'Cause the lights never get here in the first place!!" Over 209,000 clients were without service yesterday. El Caribe headlined the news that the business community of the Cibao region would purchase EdeNorte's distribution rights, but no further details were disclosed. The crisis, according to the newspaper, is fundamentally a financial one. The government owes RD$1.7 billion to the Compensation Fund that maintains the electric rates for the poorest neighborhoods, and the distributors EdeNorte, EdeSur and EdeEste owe US$375 million to the power generators. AES Andres alone requires US$17 million to pay for a boatload of natural gas to operate their turbo-gas facility. The Santo Domingo area also experienced lengthy power cuts over the weekend, in some cases for as long as 12 consecutive hours.
Rumors were circulating on Friday that prominent PRSC politician Jacinto Peynado had died. Peynado put an end to the speculation, however, by appearing on Freddy Beras Goico's television show on Friday night, speaking on the phone from Miami, where he is recovering from surgery. He denied that he was suffering from cancer, and attributed his recent weight loss to a change of metabolism following his last operation. He expects to return to the country this week.
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