Elena Viyella de Paliza, president of the National Council of Business (CONEP), and Lisandro Macarrulla, president of the Association of Industries of the Dominican Republic, announced they would hold the 2rd Business Convention to take place this coming 4-5 December. The gathering's premise is to garner a concerted position for the business sector regarding the economy. "If we keep delaying decisions, the situation will only deteriorate," Viyella said in an interview with the CDN news network. Macarrulla feels the main reason for the peso's continued depreciation is lack of confidence, due in part to the fact that all measures taken by the government have been inefficient. He said the industrial sector has been asked to make sacrifices without producing any positive results. "Monetary policy is not an antidote to devaluation," he said. Viyella concurred by saying there is a current confidence crisis. "There will be more confidence when the laws are upheld," she said, mentioning that the government had failed to follow the Monetary & Financial Code in the case of the Baninter debacle. In her opinion, if the law had been applied correctly, the crisis would not have spread to other institutions, turning an solitary incident into one that has affected the entire population. Macarrulla also highlighted that government spending has continued to increase, saying that the Mejia administration's expenditures have risen by 40% this year. While government spending for the first nine months of 2002 amounted to RD$4 billion, RD$6 billion has been spent so far this year, with a great portion of that going to pay interest on savings certificates issued by the government as its solution to the collapsed banks. "The Dominican society is paying for the damages caused by a single group," criticized Macarulla. He said those hardest hit among the business sector are those catering to the local market. Viyella said the business sector must study the issues to propose any solutions that create conditions that increase local productivity, and thus the need for next December's convention. She explained that for several months, CONEP has fostered meetings for business groups across the nation to voice their priorities and propose potential solutions to create more and better jobs and return to macroeconomic stability. "The population needs reassurance that their wages will have value," said Viyella. She mentioned that when the 2003 budget was debated, the business sector had emphasized the need for austerity in government spending. This, however, did not happen. "Now more than ever is the moment for there to be quality in government spending," she said. Macarrulla and Viyella concur that the resumption of the IMF agreement would bring confidence to the nation, given its psychological impact. The business sector spokespeople say that the conclusions should become the issues debated for the 2004 presidential election, which should veer away from focusing solely on the personalities of the candidates.
Elena Viyella de Paliza and Lisandro Macarrulla urged the implementation on a national fiscal reform, and asked that the best interests of the country as a whole be kept in mind. The goal for the reform should be to increase competitiveness of Dominican business, especially with the imminence of the signing of a FTA with the United States and Canada next year. Macarrulla said integral fiscal reform needs to be drawn up, and the practice of placing band-aid measures on the economy needs to be discontinued. "We cannot continue to create new taxes every day," he said on the CDN interview. For her part, Viyella felt additional priorities would include a bolstered judicial security and a universal and equalitarian application of taxes. "There needs to be good governmental fiscal administration," she said. Macarrulla disclosed that the business sector is studying alternatives to further taxation, which will be proposed during next month's business convention. Macarulla expressed his hope that fiscal reform would become an instrument for development and highlighted that the country would not get out of its financial troubles by taxing business more. "The solution is not a tributary one," he stressed, saying also that the effects of the eventual free trade agreements and upcoming elections on business also need to be taken into account.
The International Monetary Fund mission announced it had concluded a round of discussions with Dominican authorities as part of the first review of the country's standby arrangement with the organization. The agreement was suspended after the Dominican government assumed new financial responsibilities that had not been taken into account in the original IMF deal. The news of the government's buyback of shares in the Edesur and Edenorte power distributors with the Spanish company Union Fenosa came as a surprise to the IMF, whereupon it froze its disbursements to the DR. Marcelo Figuerola, IMF mission chief to the Dominican Republic, in an official statement on the talks, issued on 26 November 2003, says: "In discussions with the Dominican authorities over the past 10 days, we have made important progress in identifying policy options in key areas that would help strengthen the economic situation in the country. These include measures to check the rise in the fiscal deficit and public debt, relieve power shortages, strengthen confidence in the banking system, and ensure adequate external financing at this difficult time. The discussions will continue in early December, after the authorities have had an opportunity to consider the identified policy options in the context of the 2004 budget, which is to be presented to congress shortly. The authorities also aim to hold further discussions with other agencies supporting the country, including the World Bank and the Inter-American Development Bank." See http://www.imf.org/external/np/sec/pr/2003/pr03205.htm
The full budget for next year will depend on the outcome of the IMF agreement, but would not be defined by it, said Presidential Technical Secretary Carlos Despradel yesterday. The budget is almost complete, Despradel told reporters, and the finishing touches will be influenced by the IMF negotiations. The IMF, however, is not imposing any limit on the 2004 financial plan, leaving the amount to be determined by the Dominican government, which has retained autonomy and sovereignty on this matter. Despradel dismissed the latest rumors about further problems in the Dominican banking sector, calling them unfounded and refusing to comment further on the matter. The US dollar has reached a record rate of RD$44.50 to US$1, while the euro has hit RD$50.
President Hipolito Mejia announced the creation by Decree 1084-03 of the National Department for Financial Security. The new governmental body will be responsible for taking actions to prevent, monitor and investigate those that commit actions that affect financial entities and violate the Monetary Code. The new body will be directly under the President's Office.
The Dominican ambassador in Washington, Hugo Guiliani Cury, has warned that the Dominican Republic would be left out of the Central American free trade agreement (CAFTA) if it is not ready by April next year. He announced that US Trade Representative Robert Zoellick would visit the country in January to preside over the first round of talks, due to start on 8 January. Guiliani defined the prospective free trade agreement as a positive opportunity for the Dominican economy. "Like it or not, the US is the empire and it is opening the door to the Dominican economy. Today the doors are open, but tomorrow they could close and we could be shut out," said the ambassador, addressing a lunch meeting of the Dominican American Chamber of Commerce. It could be a long time before an opportunity of this kind repeats itself, he said, and the country would remain isolated if it missed the boat. Guiliani also expressed optimism about the current crisis in the Dominican Republic, citing the country's ability to overcome difficult moments in its history, such as in those of 1985 and during the 1990s, periods he described as worse than the present situation. He reminded his audience that between 1992 and 2002 the Dominican economy grew on average by 6% per annum - the best performance for all of Latin America, including Chile, which is widely believed to be the region's economic success story. With the prospective introduction of CAFTA in 2005, 80% of imports from the US would be exempt from taxes, representing a loss in government revenues of RD$14 billion in its first year, according to the calculations of economic think-tank CIECA (Caribbean Center for Economic Research), quoted in Diario Libre. Economist Frederic Emam Zade, the country's negotiator of the Caribbean and Central American bilateral agreements, has argued that if the DR is to open up its markets to US goods, then the US should open up its labor market in turn.
The Dominican Conference of the Episcopate, the voice of the Roman Catholic Church in the Dominican Republic, urged the government to concentrate on priority spending and eliminate extravagant, useless and unnecessary spending, including high wages, superfluous jobs and generous subsidies. They pointed to the need to curb the erosion and dispersion of the state's resources and bring decency to the public administration by putting a stop to the sacking of public assets. "We must immediately remove anyone from public office who seeks to become rich by the goods of the state," states the document, adding that these individuals should also be severely penalized and stripped of the right to return to any job in the public arena. The bishops said it is time to trade government officers for qualified people, who may be chosen outside of the ruling party or among people that are not partisan to any group. In a statement on the political, economic and social situation of the nation, the bishops warned that the country has arrived at a critical point that calls for urgent action to reduce government spending. Furthermore, the church said that the flight of capital being seen is scandalous and one of the causes of the crisis, as every business, big or small, and every individual, rich or poor, seeks to change their pesos into dollars and stash them outside the country. The bishops also called for an end to rumors that affect financial institutions. Furthermore, they also urged that President Hipolito Mejia reconsider his decision to seek re-election. "There are those who believe that, through abandoning his desire to seek re-election, Mr. President would contribute greatly to social peace, confidence and governance. We leave it up to his conscience," says the statement.
Francisco Antonio "Tony" Pena Guaba, son of the late PRD leader Jose Francisco Pena Gomez, called on that party to expel Guido Gomez Mazara, the government's legal advisor and guiding light of the PPH (Proyecto Presidencial Hipolito, the internal campaign promoting the President's re-election ambitions). In a fierce attack on Gomez Mazara, Pena Guaba called him "the rotten apple" that PRD youth should be ashamed of, and accused him of dividing the party, harboring personal aspirations and benefiting his circle of friends. In a letter to PRD president Hatuey Decamps, Pena Guaba says that Gomez Mazara's expulsion would help reunite the party. Decamps has promised to study the accusations and said that he would present them to an internal disciplinary tribunal. Guido Gomez Mazara's reaction was, on the surface at least, serene: "All I can say is that (Tony Pena) is a nice guy, talented, and highly educated…" He added that he would be incapable of suing any son of Pena Gomez, and that he particularly liked and admired Tony. Pena Guaba has recently returned from his post as Dominican consul in New York City, and is the current president of the PRD youth movement, JRD. In his Diario Libre back page commentary, Adriano Miguel Tejada asks "why now?" saying that Pena Guaba went as far as to label Guido Gomez Mazara "the PRD's Anti-Christ". Tejada wonders: "could this accusation be a new sign that the PPH is splitting? All bets are on, but there are differences in range and boxing abilities between the two contenders".
As reported in last week's DR1 news, the Attorney General, along with the Supreme Court and the National Police, have established three "complementary" measures regarding the need to obtain a judge's warrant for arrest before detaining an accused person. According to El Caribe, the police and the assistant DAs can arrest a person without a judge's order if they find evidence that a crime has been committed. In the second additional stipulation, the Supreme Court and the Attorney General announced that the judges of the instruction phase, as well as certain court judges and the assistant district attorneys, will work rotating shifts, 24 hours a day. The final measure authorizes the police to arrest anyone caught in the act of committing a crime or immediately after, if there is evidence that a crime has been committed. Despite protests from police officials, the Attorney General yesterday confirmed that the controversial "redadas" (police round-ups) would from now on be prohibited. Victor Cespedes Martinez said, "The days of the round-up are over, since the introduction of resolution 14783-03. This nation is wise and fair, and knows how to uphold (the laws)."
The extensive flooding in the north of the country, which has already claimed at least ten lives, is now in danger of causing more dengue fever outbreaks, according to health experts. Hoy newspaper reports that Radhames Lora Salcedo, who heads the National Emergency Committee, called on the Health Ministry to do more about the threat. Speaking in Monte Cristi, one of the most affected provinces, he said that mosquitoes were breeding quickly in the waterlogged areas and that more medical supplies were needed urgently. Hoy's Pedro Gil Iturbides speaks of the "incalculable costs" of the floods, which claimed the lives of hundreds of farm animals and wiped out entire crops, as well as the human casualties caused and the damage done to property. Emergency response has a role to play, said Gil, but prevention is more effective. He called on the authorities to design an effective plan to prevent such extensive damage to vulnerable areas. His feeling is that poverty leads people to live and farm in dangerous areas, and if there were more investment in these areas, this disaster could have been avoided. "The deferred human development programs are what lead hundreds to live on the front-lines of these dangers." Public Health Minister Jose Rodriguez Soldevila said he was waiting for government disbursements to be able to act on prevention tactics and to assist the people.
Listin Diario newspaper leads with the story, also carried in some of the other papers, of the grisly murder of San Cristobal businessman Jose Castro. It appears that the 48 year old father of five was killed by his wife, his two teenage children and a domestic employee, who planned the killing together in response to a long history of physical abuse at his hands. This event took place during a week when the nation has been focusing its attention on the problem of domestic violence, with the commemoration on 25 November of the International Day against Violence against Women. The paper also reports the sadly all-too-common occurrence of a La Vega man who shot his wife dead, and then committed suicide, because she had asked for a separation.
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