| Daily News - 19 November 2003 |
As reports continue to trickle in, the persistence of torrential downpours steals all the headlines today. El Caribe reports five deaths attributed to the flooding, while the Listin Diario lists just three. Hoy reports on the multimillion-peso loss in property and crops. According to El Nacional, an evening paper, in the area around San Francisco de Macoris, the overflowing rivers have displaced 12,000 people and isolated 50 rural communities. Thousands of acres of the rice harvest have been damaged, especially in the areas of Arenoso and Villa Riva. Iluminada Perez reports in El Nacional that 40,000 are without drinking water in the area around Nagua. The National Meteorological Office (ONM) warns that rains are expected to continue into the weekend. According to the Listin Diario, General Radhames Lora Salcedo, the head of the Civil Defense and the National Emergency Committee, said that the red alert was still in effect for the Lower Yuna, Santiago and all of the Northwest as far as Monte Cristi. The Listin reports that a pregnant woman and her child were lost in Villa Riva and an elderly man was drowned in Cotui. The woman died when rescue brigades could not reach her in time to get her to a maternity center. The President's Office authorized a RD$25-million disaster relief fund to be used to assist flood victims. Lora Salcedo, warned that since more rainfall is expected, the population should remain vigilant, especially in any low-lying areas. He also urged residents in the affected areas to boil any water for consumption. For its part, El Caribe says that five have perished in the flooding, and that, according to Lora Salcedo, the current flooding is greater that what happened after the hurricanes David (1979) and Federico (1979). The Civil Defense leader was very firm when he told the press that "a red alert means save yourself!"
El Caribe newspaper reports that government imports crowd the country's main port, Haina Oriental. The newspaper says that government imports make up 80% of the cargo at Haina. The Instituto Nacional de la Vivienda, a governmental housing agency is responsible for most of the cargo that has overstayed its time at the port. Engineer Juan Vargas of INVI explained the construction materials would be used to build 4,657 dwellings as part of a contract with the MG Group of Miami and INVI. According to the newspaper the cargo is also delaying the renovation works of the port by Haina International Terminals, private operator of the port. The delays in removing the cargo are causing problems to private business given the reduced space now available at the port. One source told the newspaper: "If the merchandise had been consigned to a private company, long time ago it would have been auctioned to cover the costs. Some 5,000 tons of wooden planks and 598 containers with construction materials have been awaiting clearance at the port for more than six months. These imports do not pay taxes. A source told the newspaper that the reason for the delay in the cargo leaving ports is that shipping companies demand payment of US$1.05 million in container usage charges from the state agency to release the containers. El Caribe also reports that vehicles consigned to the governmental Plan Renove also remain at the port, some even starting to rust. Furthermore, El Caribe reporters say that the metal frameworks for the construction of sports installations are also awaiting clearance from the port. The imports were purchased with multi-million dollar loans the government took with foreign commercial banks.
The Superintendence of Power has finally clarified why Dominicans continue to get high power bills regardless of receiving only a few hours of the service. As reported by Cadena de Noticias in its online news service yesterday, Superintendent of Power George Reynoso denied that the power distributors (now under state administration) are scamming Dominicans. "What happens is that the service needs to be paid with or without light, because users have to pay for the capital [investment]," he explained. He made the comparison: "It is similar to when you buy a car with installments. You have to pay even if it breaks down." This is the first time a government official comes forth to clarify that users are being billed for more than their consumption, as consumers have been lead to believe. Reynoso promised a reduction in the long hours of blackouts. "By the end of the month there may be less blackouts," he said.
The Supreme Court presented the Senate with a proposal to modify access to the annulment process (also called "cessation"), whereby lawyers argue for the dismissal of charges against their clients. According to the reasoning of Chief Justice Jorge Subero Isa, these appeals only tie up the court system and are a principle cause for the backlog of cases. During a meeting with the Senate president Jesus Vasquez Martinez, Subero Isa also appealed for the passage of the Real Estate Registration Law, which would provide greater security to property owners. According to Manuel Azcona, the Listin Diario reporter, the Chief Justice wants the Senate to modify Law 3726, created on 29 December 1953, in order to synchronize the legislation with modern procedures, thereby avoiding the recurrent delays that tie up the system.
General Radhames Zorilla Ozuna, the Army Chief of Staff, has been reprimanded for his actions last week. The general has been an outspoken promoter of the re-election of President Mejia. A video footage of the general doling out money from an envelope carrying the PRD party emblem has been widely circulated on national television and all the talking heads have made mention of the incident. The PLD opposition party requested that the general be removed by President Mejia from his post. The Listin Diario reports that Armed Forces Minister Jose Soto Jimenez reminded the general that the Armed Forces are apolitical and heedful of the Constitution, on the instructions from President Hipolito Mejia. El Caribe says that President Mejia also told Zorilla to stop his political work. Mejia and Soto Jimenez ordered the major general to cease any activities that could be "misinterpreted". Lieutenant General Soto Jimenez told reporters from El Caribe that he personally reprimanded Zorilla, in addition to the scolding given by the President. Soto Jimenez was questioned by reporters at the San Isidro Air Base, where President Mejia landed in a private jet following his four-day tour of South America. Hoy newspaper carries statements by former president of the Central Electoral Board Juan Suly Bonnelly whereby he disagrees with the request to send the voters list to the Armed Forces, that argue they would like access to the list to remove any military that may appear among the voters. Hoy newspaper in a page two commentary also mentions the commentary of the president of the Central Electoral Board, Luis Arias, whereby members of the Armed Forces have been requesting from the presidents of the municipal boards the voting list and the location of the voting stations.
Robert Zoellick, the United States Trade Representative, announced in Miami yesterday that the Dominican Republic and the US would start talks on a bilateral free trade agreement that would possibly be tied into the Central American Free Trade Agreement. Zoellick is in Miami to attend the 8th Free Trade Area of the Americas (FTAA) ministerial meeting on 20-21 November.
For many years, teams of geologists have studied the southern part of the island, fueling the dream that there may be a rich deposit of oil under the southern part of the island. In the economic section of today's Listin Diario, the dream is revisited. According to the report filed by Jairon Severino, the Dominican Republic is nearing the commercial exploitation of the oil deposits near Azua on the South Coast. The report claims that 3 of the 14 wells have shown flows of oil that could be exploited. Andres Alba, the manager for Murfing Dominicana, says there are sufficient indicators to suggest a large quantity of exploitable petroleum beneath the Dominican soil. Nevertheless, Raul Brito, the Murfing Drilling Company envoy, says that it is necessary to wait a while longer. Severino indicates that there is sufficient pressure for oil to stream 100 feet into the air at two of the three flowing wells. With an investment of US$10 million, Alba feels that Murfing knows it will get its money back. The conservative stance of the Murfing spokesman is more consistent with the history of oil exploration in the Dominican Republic, and many of the population remember the famous speech made by President Guzman, when he announced the oil strike that never occurred. One encouraging note is that the "Maleno" oil has been found at a relatively shallow depth of 1,100 feet and the "Charco Largo" oil was found at over 7,000 feet.
Pedro Silverio, the head economist at the PUCMM economic think-tank Cenantillas, looks at the current crisis and sees that both big and little things are the causes. He states that the Mejia administration is currently going through one of its most dire moments, and, even worse, the situation is fostering a perception that there is no remedy, that the government has deceived those who elected it, and that many have lost hope. Nonetheless, the Mejia administration does not seem to get the message or, perhaps they only pretend to ignore it, muses Silverio. Among the larger items Silverio cites as causal agents of the crisis are the lack of fiscal discipline, incoherent monetary and exchange policies and the chaotic indebtedness assumed by the government - an indebtedness that President Mejia denounced in his speech in Bolivia. For Silverio, the small things in the public sector have been converted into large signs of the government's managerial incapacity. As a sign of this, the economist points to a promise made by President Mejia to Jeb Bush that he would support Miami as the permanent site of the ALCA (the America's Free Trade Association), and then in a lapse of memory, the government lent its support to Panama for the group's site. A simple example, admits Silverio, but one that reflects the lack of seriousness with which the government makes and breaks its promises. Another small thing that Silverio points out is that the government announced the removal of duties for pharmaceuticals and the raw materials for making pharmaceuticals. Having done this, they next amended that the loss of duties had to be made up by the export sector, which would also have to contribute funds to resolve the electricity problem facing the government. This is why the export sector became very nervous when the President told his advisors that they had to come up with RD$1.7 billion within 48 hours, a feat they accomplished by adding on more debt. Silverio concludes that the common denominator of all of these tribulations is the lack of an official plan that would guide policies in a certain direction. While there is no logic to this jigsaw puzzle of a crisis, there is one piece too many for it to work. This extra piece, says Silverio, the one that is messing up the puzzle as a whole, is that called "re-election."
Franco Uccelli, the research analyst who covers the Dominican Republic for Bear Stearns, believes that "the peso weakness is a reflection of the negative sentiment among individuals and local market agents about the future prospects of the debilitated economy." He points to the fact that the higher inflows of hard currency, owing to stronger tourism, export and remittance flows that are reacting to the depreciation of the peso, the issuance of US$600 million in soverieign bonds, a US$120 million disbursement from the IMF and one for US$100 million from the IDB, should have elsewise contained further devaluation. In his report today, he also states: "We view the restoration of the IMF program and consequent multilateral disbursements as critical for the financial viability of the Dominican Republic. Uccelli says that anxiety over the restoration of the agreement has been building up, mentioning that government officials have not been able to produce consistent fiscal numbers that conclusively show the magnitude of the country's fiscal and quasi-fiscal deficits, as well as financing schemes designed to cover these. "Against this backdrop, the IMF is reportedly producing its own fiscal estimates, a potentially slow and painstaking process," he writes.
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