| Daily News - 14 November 2003 |
On the eve of his departure for Bolivia, President Hipolito Mejia told an extended government council meeting that the business sector needs to make more sacrifices to confront the current economic crisis, and that the government had already complied with the International Monetary Fund's demands to curb public spending. The business sector's main duty, according to the President, is to fulfill their fiscal obligations. In speaking of the contentious 5% tax on exports, the President said that parts of the private sector had profited from the peso's devaluation and the impoverishment of the Dominican people, and that the tax represented a way for them to provide "compensation". Mejia said that while the IMF agreement would mean sacrifices for all Dominicans, he affirmed he was doing all he could to ensure that the poorest are not made to pay the highest price. He claimed that the government had done its bit by complying with the demands to control public spending, and that the business sector's contribution would be through taxation. "We all have to play a part in order to restore stability and growth, without the sacrifice affecting the poorest; they are not the ones who created this crisis." In relation to the effects of the crisis, the President said that he was as unhappy with the situation as everyone else. "I am displeased with those who don't contribute enough to bring this crisis to an end. I am displeased with speculation and the soaring prices of basic consumer items. I am displeased with the lack of faith of some opinion-makers, who, instead of promoting hope, predict a collapse of the Dominican nation." The President ended his address by comparing his style of government to a tractor, as opposed to an elegant car. "To drag the earth from under the wheels and remove the obstacles, we must have the strength and perseverance of a tractor. I have this strength and perseverance and no rock or other obstacle will succeed in stopping our progress towards a better life for all the inhabitants of this land," he said. Diario Libre's "El espia" sidebar reveals that the President's speech was punctuated by applause from most of his audience, with the notable exception of Mejia's Vice-President and pre-Presidential rival, Milagros Ortiz Bosch. She did, however, join her colleagues for a round of applause at the close of his address.
In an attempt to avoid the threatened blackout, the authorities have authorized a further payment of RD$1.75 billion to the power generating companies, due to be processed in the next 48 hours. The sum of this installment represents, however, a mere 15% of the total sum owed by the government to the generating companies, who claim to be running out of fuel. The Haina generator alone is owed over RD$3 billion. President Hipolito Mejia, who ordered the payments to be made, said that he hoped this would mean "the start of a significant improvement in the electricity supply service." Nevertheless, the prolonged power cuts of up to 20 hours have not abated, and the newspapers report that the deficit in supply remains at over 50%. State electricity company (CDEEE) executives denied that a complete shutdown of power supplies was imminent. CDEEE administrator Cesar Sanchez said that there was enough fuel in the country to power the generating stations and that moves were already afoot to ensure the purchase of the needed fuel. He did not, however, go as far as to promise a complete recovery from the crisis. El Caribe's main editorial calls for all to join forces to face the problem and suggests a "national dialogue". It recommends an end to all state involvement in the sector, including phasing out subsidies to disadvantaged neighborhoods. The writer does not spare the private sector and slams the favorable conditions and "leonine contracts" enjoyed by some of the generating companies, resulting in impossibly high prices for the consumer.
Another aspect of President Hipolito Mejia's controversial interview with Univision's Jorge Ramos (see yesterday's DR1 news) was his comment about Venezuelan President Hugo Chavez. Mejia said that if Chavez was afraid, he should not visit Santo Domingo. This was a reference to the allegations by Chavez that the Dominican authorities were complicit in an assassination plot against him by leaders of the Venezuelan opposition in exile. The timing of the TV interview is particularly unfortunate, seeing as the last couple of weeks have witnessed an improvement in relations with Venezuela, which had suspended fuel exports to the Dominican Republic as a result of the rift. It is hoped that Venezuela will resume exports soon, and a damage mitigation exercise appears to be underway, with the Dominican embassy in Caracas trying to play down the significance of the President's comments. According to these representatives, the interview was recorded one month ago - before the dispute was resolved - and that the comments could be misinterpreted if taken out of context.
Supreme Court president Jorge Subero Isa has come out in defense of President Hipolito Mejia's decision to override the Central Bank and District Attorney's arrest warrants for the accused in the Bancredito fraud case. According to the chief justice, the President was acting legitimately and within his powers in ordering that District Attorney Maximo Aristy Caraballo suspend the proceedings against Manuel Arturo Pellerano Pena and Juan Felipe Mendoza, accused by the Central Bank of banking fraud. "It does not represent an infringement of justice, because the public ministry is a direct dependency of the executive power (the President), a subordinate of the President and must do what the President says." Had the President intervened after a judge had been appointed to the case, it would have been a different matter, explained Subero Isa.
A delegation from the International Monetary Fund (IMF) arrived in the country on Wednesday and resumed its talks with the Dominican authorities on the progress of the standby agreement signed in August. The Central Bank announced that the teams set to work immediately on studying macro-economic figures, a stage of the process that is expected to last two weeks. The aim of the IMF mission is to produce a first revision of the agreement, incorporating energy sector components. The IMF had suspended its disbursements to the Dominican authorities and withdrawn its delegation in reaction to the government's sudden reacquisition of the power distribution companies Edenorth and Edesur, previously under the control of Spanish power company Union Fenosa. The Central Bank expressed hope that the IMF's return will clear the way for further disbursements aimed at strengthening the CB's international reserves, which are at dangerously low levels as a result of the Baninter collapse and other economic factors.
The government has abolished all taxes on medicines and the raw materials used in their manufacture, as well as some unspecified agricultural supplies. This came on the heels of a decree by President Hipolito Mejia, with the aim of easing the burden on the country's poor. "The people will begin to feel the benefits of this social investment in the next few days," announced the President. Hoy newspaper's main editorial welcomes the announcement, saying it would assist "the weakest layers of society," whose situations have intensified recently by the peso's devaluation and steep price rises. The resulting deficit would have to be compensated from other sources, says the writer, and the President is hoping that this will come from the 5% tax on exports and other income-generating mechanisms. The editorial continues by outlining the difficulties experienced by lower-income families dependent on medications, especially when it comes to imported drugs. The writer calls on the government to do more to promote national manufacture of generic drugs, which is currently restricted by international trade agreements. Generic drugs are much cheaper than their brand-named counterpart from abroad. The generic drugs that can be legally manufactured in-country are those whose patents have expired. According to the editorialist, higher interests exist, possibly in certain international embassies, which act to ensure that even these legal generic drugs are not produced, at the expense of the Dominican poor who are instead forced to buy the expensive imported brands.
El Caribe reports that certain state hospitals are facing the prospect of having to work without electricity, as a result of the over-use of their backup generators. The newspaper quotes several hospital administrators, one of whom, Bienvenido Mejia Mejia of the Luis E. Aybar "El Morgan" hospital, is requesting the hospital be transferred to a "more privileged circuit" on the supply grid. Spending on fuel for the hospital's backup generator has increased from RD$80,000 in 2002 to RD$250,000 this year. Another effect of the power crisis, also reported by El Caribe, is the danger to women who are forced to walk down darkened city streets. The newspaper says that in Santiago many female students are afraid to walk home from classes after dark, because some of their fellow-students have been assaulted. Some are resorting to travel by taxi, which is not an option for most students on limited budgets. Bus drivers, too, are reporting increased attacks by stone throwers under the cover of darkness on several of Santiago's bus routes. The OMSA bus company is providing additional transport for students at night, according to the report.
The opposition Reformist party's executive committee has suspended Jacinto Peynado and other leading members, "depriving them of all rights" as penalty for their violation of Article 123 of PRSC party statutes. Jacinto Peynado, Carlos Morales Troncoso, Angel Lockward, Leonardo Matos Berrido, Humberto Salazar and Hector Rodriguez Pimentel will face a disciplinary tribunal for challenging the legitimacy of the PRSC's Presidential candidate Eduardo Estrella, who they claim to was elected fraudulently. The Peynado camp had called a national assembly of party members for 16 November, excluding those on the executive committee who support Estrella's candidacy. Federico "Quique" Antun Batlle - a former ally of defeated pre-Presidential candidate Jacinto Peynado - was not included on the list of suspended members, presumably a result of his recent overtures in favor of Estrella's candidacy. Peynado was scathing in his reaction to the suspension, saying, "None of those individuals has the capacity, the morals or the scruples to talk about suspension." Peynado said further that their stance was not supported by the party mass membership.
British Ambassador Andy Ashcroft paid a courtesy visit to the Chamber of Deputies yesterday, where he notified its president, Alfredo Pacheco, that British investment in the Dominican Republic amounted to US$400 million. He stated that this showed that foreign investors had confidence in the Dominican market. Trade relations between the DR and Great Britain are becoming stronger, so that figure is certain to increase considerably over the next few years, said Ashcroft. The value of imports and exports between the two countries stands at US$80 million.
A propane gas storage tanker exploded in the Villa Agricolas district of the capital yesterday, destroying the gas supply depot and injuring seven people. Seven thousand gallons of gas threw 200-meter flames up into the air, causing widespread panic, according to reports. Several cars were also burned as a result of the explosion. The injured were taken to the burns unit at the Luis Eduardo Aybar hospital, where they were treated for first- and second-degree burns. The Santo Domingo fire service is investigating the cause of the explosion, the second of its kind in the capital in recent weeks. TV news channel CDN is reporting that residents in the area are demanding the depot be transferred to a less populated area.
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