President Hipolito Mejia is being urged to heed the statement issued earlier this week by the Dominican Conference of the Episcopate (as reported in Thursday's DR1 news) and withdraw his bid for re-election. The Catholic bishops' call is being echoed in many quarters, including from within the President's own party, the ruling PRD. Henry Mejia, the PRD's electoral director, implored the President to listen to the clamor from diverse sectors of Dominican life and abandon his ambitions to become the Presidential candidate for his party. He said the activities of the PPH (Proyecto Presidencial Hipolito, internal PRD campaign promoting the President's re-election) were distorting the country's economic direction and were the cause of widespread uncertainty. The contents of the pastoral letter were also endorsed by the Senate president, Jesus Vasquez of the PRD, and the president of the Chamber of Deputies, Alfredo Pacheco, also of the PRD. Until very recently, both men had identified themselves with the PPH. Reynaldo Pared Perez, the spokesman for the main opposition PLD party, said, "It would be a good thing if the President were to reconsider his re-electionist stance, because this would lead to a better climate of confidence for investors in the Dominican Republic." These views were shared by the business sector. Marisol Vicens, as president of the young entrepreneurs association ANJE, said that Mejia's re-election ambitions had a definite bearing on the current climate of uncertainty, which has directly affected the peso-dollar rate of exchange. Private business association CONEP president Elena Viyella de Paliza added her voice to those calling for Mejia to abandon his aspirations to a second term of office, in order to reduce unnecessary public spending.
President Hipolito Mejia was unrepentant in his response to yesterday's pastoral letter. He continued to blame external factors for the economic ills the country is experiencing, along with the government bail-out of this year's major banking collapses. "Thanks to us 700,000 savers have their 'chelitos' (pennies)," Mejia said. In an address yesterday, Mejia focused on what he saw as positive developments, such as the recent improvement in the electric supply, saying, "The light bulbs are switched on and will remain that way!" He attacked the critics of August's Pan American Games, which he insisted were a success. The President admitted that while the losing battle to stabilize the beleaguered peso was causing him concern, he vowed to confront it and issued a warning to speculators in the currency exchange market. Yesterday the peso stood at RD$44.25 to US$1, showing a slight recovery from the record low of RD$44.50. Finance Minister Rafael Calderon defended the government's record, saying the country was in a "state of emergency", which he also attributed to external factors. Calderon is quoted in several newspapers as saying, "If President Mejia had not been in power, we would not have a country."
President Hipolito Mejia will pay a visit to some of the areas most affected by last week's flooding in the northeastern part of the country, adjacent to the frontier with Haiti and known as the 'Linea Noroeste'. The President will be shown some of the damage and the emergency response work being carried out by the authorities in the region. Last week the President visited the provinces of Santiago, San Francisco de Macoris and Puerto Plata, and was due to continue westwards to the Montecristi area, but this leg of the visit had to be cut short because of continuing heavy rainfall. Today's tour will take in Villa Vasquez and Dajabon, where about 12,000 people have been affected by the rising waters and where certain areas remain under water. The Red Cross will be distributing emergency rations donated by the French and German governments via their embassies in Santo Domingo. The Listin Diario reports that the Dominican community in the United States has been collecting emergency supplies such as mosquito nets, drinking water, folding beds, sheets, clothing, shoes, rice, canned food, powdered milk and first-aid supplies. Collection points have been set up in various parts of New York City, in the areas with large concentrations of Dominican immigrants.
According to Central Bank Governor Jose Lois Malkum, the 2004 budget will comply with the International Monetary Fund's stipulation of a guaranteed surplus of at least 1.5% of GDP and a systemic risk law will be approved. Malkum also justified the imposition of new taxes, such as the vastly unpopular surcharge on exports and the US$20 travelers' exit tax. The IMF is demanding that these new taxes be implemented through legislation, as opposed to Presidential decrees. The authorities recognize the need to raise more revenue through taxation and are committed to signing an agreement with the Fund: "We must reach an agreement and we will reach an agreement - even if we have problems reaching it," said the CB official, hinting of difficulties in the IMF negotiations. Malkum also revealed that there remained a gap to be filled of RD$6.2 billion. He was speaking to reporters following a meeting with fellow government economic team members, Finance Minister Rafael Calderon and the President's Office Technical Secretary Carlos Despradel, who insisted that the deficit was a result of insufficient fiscal income rather than excessive spending. Malkum linked the peso's continued freefall against the dollar to the uncertainty surrounding the IMF agreement. The economic team expressed confidence that an agreement would be signed before the year was out, and predicted disbursements of US$250 million.
Lawyers for the Central Bank and Banking Superintendence have registered their opposition to the application for bail made last week on behalf of accused Baninter executives Ramon Baez Figueroa and Marcos Baez Cocco, who have been in police custody since 14 May. The state legal team argued that bail would be illegal in this case, as the two are in custody under suspicion of money laundering offences. The Baninter defense team has taken out full-page, paid advertisement in today's newspapers to reinforce their request that their clients be released under the conditions of bail. The advertisements are headlined: "The provisional liberty on bail of Ramon Baez Figueroa and Marcos Baez Cocco is based on constitutional rights and the protection of the presumption of innocence." The two are due to present their petition to the Baninter case's legal referee, Judge Eduardo Sanchez Ortiz, on Monday morning.
Labor Minister Milton Ray Guevara announced that the new Social Security fund has surpassed the RD$1-billion mark, and that the government has honored its budgetary commitment to the fund, along with private employers and employees' contributions. Guevara described the fund as the best way to ensure the improvement of public health. The new Social Security building, named for former President Antonio Guzman Fernandez, was launched on Thursday and is located on Ave. Tiradentes in central Santo Domingo. President Hipolito Mejia attended the ceremony, along with the late President's widow, Renee Klang de Guzman, and daughter Sonia Guzman, who is the current Industry and Commerce Minister.
The pharmaceutical industry association INFADOMI says that this week's Decree 1079-03, which exonerates imported medicines and related items from taxes, will not have any significant impact on prices for the consumer. Importers will still have to pay the exchange rate commission, recently raised from 4.5% to 10%, and retailers and consumers will still be charged the ITBIS (value-added tax). INFADOMI also attacked the transnational drug companies, which prevent local manufacturers from producing certain drugs, such as treatments for common chronic illnesses like diabetes and hypertension. These medicines produced locally could be sold to the Dominican consumer at a fraction of the current price. Imports comprise 65% of all medicines consumed in the country, and pharmaceutical importers association ARAPF is protesting the continued levy of the 10% exchange rate commission on these items, which, according to executive vice-president Fernando Ferreira Azcona is penalizing the sector. Rolando Antonio Rodriguez, representing pharmaceutical retailers, agreed that this week's exoneration would not have much of an effect on costs as long as the peso-dollar exchange rate continues its current trend. In some cases, prices have doubled since last February, claimed Rodriguez.
The airport authorities have announced they will elevate the scrutiny of checked baggage at all airports, in order to prevent illegal transfers of undeclared foreign currency. The special airport security body CESA said yesterday that they would be redoubling their efforts to intercept such cargo. They cited the apparent increased traffic in illegal currency and the recent discovery of large amounts of US dollars and euros in travelers' luggage, en route to Europe and the United States. A Colombian national bound for Miami was caught with 600,000 euros and 40,000 pounds sterling, in cash, in his hand luggage last week. Air passengers leaving the country are allowed to travel with up to US$10,000.
Bienvenido Alvarez Vega, writing for Hoy newspaper, examines the growing impoverishment of the Dominican people. "Poverty is not a new phenomenon, we have always been poor," he says, in reference to the ever-growing struggle for many to get by, in some cases resulting in pauperization. The writer observes that the most basic services are increasingly absent and the devaluation of the currency means that many more goods are unaffordable. Salaries for employees of large companies have lost 37% of their value in the last year, declining from the equivalent of a minimum wage of US$200 per month to US$126, according to statistics. In free trade zones the situation is even worse; minimum wages there are now worth a paltry US$79 per month, compared to twice that amount one year ago. Meanwhile, prices are up 40%, meaning that all areas of the economy are affected. Companies - large, medium and small - are seeing their capital dissolve "like salt in water." He ends on an even gloomier note, saying, "The currency devaluation and the resulting inflation is crushing the purchasing power and quality of life of Dominicans, but the situation is even more dramatic for those without employment. More about that, later." The writer can be contacted on bavegado@yahoo.com
El Caribe leads with the tragic news that ten premature babies have died in San Pedro de Macoris' Musa Hospital. The cause of the deaths is being given as hypothermia, as most of the hospital's incubators are out of service. The single unit that works is affected by the serious electricity shortages and lack of oxygen. Doctors are protesting the cash crisis at the public hospital, saying it is raising infant mortality levels in the city. While Health Minister Jose Rodriguez Soldevila was expected to visit the struggling hospital yesterday, he did not appear, according to Thelma Nunez of the San Pedro branch of the CMD (Dominican medical association). The paper's editorial comment calls on the government to provide the hospital with the resources it so badly needs, saying, "Not much can be done with empty hands." Hoy newspaper reports from Bonao's Pedro E. Marchena Hospital, where doctors must work without medical supplies of any sort. The emergency department is empty and patients are being turned away with prescriptions that include the type of bandages they must buy, according to the report. The hospital has been under construction for eight years and is not yet completed.
The newspapers continue to aim their focus on the grim story of murdered San Cristobal businessman Jose Castro, apparently killed by a domestic servant at the behest of his wife and children. Neighbors and friends of the family are coming forward to tell reporters that it was an "open secret" that Castro was violent towards his family, and that his wife had reported to him to police on several occasions, but that he was able to "sort the matter out" with them and escape any judicial punishment. The papers carry descriptions of several brutal incidents against the young children - including broken limbs, attempted drownings and even bullet wounds - as well as against Miriam Brito, his wife. Brito is depicted as a timid woman who tried to leave her husband on more than one occasion in the course of their 16-year marriage, only to be tracked down and brought home against her will. The couple had sought professional counseling, but Castro had stopped attending the sessions and forbidden his wife to return. "She felt unprotected by the justice system," said her niece, journalist Nancy Brito, as quoted in Listin Diario, "…and look what this led to." Castro was also violent in his professional life, according to sources, and had made threats against journalists reporting on his company's contentious sand extraction activities.
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