Hoy newspaper reports that Mining Director Pedro Vasquez Chavez says the Dominican government has not reached any conclusive decision on the terms of a deal with the Toronto-based Canadian company Unigold. Yesterday, it was reported that the government had offered Unigold the advance sale of revenues derived from the exploitation of the Pueblo Viejo gold mine, one of the world's largest undeveloped deposits, containing over 30 million ounces of gold. The Pueblo Viejo mine, located in Cotui, is currently under lease to the Placer Dome company of Vancouver, Canada. In August 2002, that company announced the launch of a feasibility study on the deposit, which foresaw annual gold production of 400,000 ounces. DR1 reported yesterday on an announcement made by Unigold on its website whereby the company agreed to acquire revenues from a 3.2% net smelter return on the Pueblo Viejo gold deposit, as per a letter of intent signed with the Dominican government. This agreement would represent US$21.3 million in cash this year for the Dominican government, in addition to a US$2.58-million cash contribution to an entity called Fundacion Cacique Inc, described as a non-profit organization created to support and assist the Dominican people. Unigold was established in 2003 to develop possible gold deposits in the Neita and Sabaneta areas along the Haitian border. The existence of the proposed deal was unknown prior to the information leak to Hoy newspaper yesterday. Diario Libre reporters highlight today that if the letter of intent announced by Unigold to its shareholders in Canada is for real, then Unigold, which did not participate in the tender for the gold mine, would be given the right to exploit the gold deposits if Placer Dome decides to not go ahead. The Australian company, MIM was the runner-up company in the tender. Diario Libre report indicates that according to the agreement Placer Dome signed with the Dominican government, Article 14.1 establishes that Placer Dome cannot unilaterally negotiate the mine's benefits. Placer Dome has not issued a statement on the matter.
Diario Libre reports today that the government and business sector have differing opinions over the penalization of the productive sector by more taxes. At the start of the Mejia government, a fiscal reform was carried out that virtually doubled taxation on the private sector. Subsequent additional taxes have since been levied on businesses. According to a report in the government-intervened Listin Diario, the government hopes to increase the ITBIS sales tax, in addition to the 5% tax on exports. This is in addition to the 4.75% surcharge on exchange transactions that was increased to 10%, and the new 2% on imports, among other new fiscal measures needed to bolster government finances. Even sectors within the PRD believe the government should make more efficient use of its present revenues, as Miguelina Ortiz, Tourism Minister and wife of Presidential pre-candidate Rafael Subervi, said on the Julio Hazim TV talk show this morning. But Technical Secretary of the Presidency Carlos Despradel insists the government needs the new taxes to balance its budget and meet the numbers required by the International Monetary Fund. Despradel says the government must have more funds to recuperate from salvaging the collapsed banks and the buyback of the power distribution companies. While the business sector wants the government to sign with the IMF, its spokespeople feel the industry can bear no further penalties and the government should instead reduce its own superfluous spending. The business sector is already cringing under the rampant inflation, rising power costs, decreased sales, and already high taxes. The IMF suspended its agreement with the Dominican government, after the Mejia administration performed a surprise buyback of the Union Fenosa power distribution companies in the DR. Elena Viyella de Paliza, president of the National Council of Business (CONEP), the largest business organization, urged the government to seek balance in its public finances. She criticized the takeover of the power distribution companies and the intromission of politics in the government's economic decision-making. She opposed the government's decision to push the 5% tax on exports through Congress at a time when the country needs to generate hard currency more than ever. El Caribe writes today that the government will need to spend around 60% of its funds (or RD$64 billion) on the burgeoning foreign debt and government wages next year.
Propane gas used for cooking and public transportation has become harder to find at the distributors' sites. El Caribe says there is no short-term solution at hand, as the government has accumulated a large tab with importers. The government has been subsidizing the cost of fuel, keeping it at RD$25 per gallon, while other fuel products have doubled in price primarily reflecting the falling peso. Despite the stable price, however, propane distributors have less and less supply every day. El Caribe reporters say that of all the places visited in Santo Domingo, only one distributor was selling. Long lines of cars are parked at the distributors, awaiting arrivals of supplies. The newspaper attributes the scarcity of the much-used fuel to the suspension of sales of Mundogas, which had previously imported 10% of national consumption demand, and to the constant delays in paying the subsidies to Coastal Petroleum and the Dominican Petroleum Refinery (Refidomsa), the two leading importers. Average consumption of propane gas is 22 million gallons a month. Diario Libre newspaper reports that according to the president of the Refinery, Amaury Justo Duarte, the government already owes RD$250 million in overdue subsidy payments. Meanwhile, the newspaper reports that sales of coal used for cooking have soared, as people regress to an old-time method of food preparation, the anafe. Since the 60s, propane gas stoves were encouraged to combat the devastation of Dominican forests and are widely used.
The appointment of Franklin Frias as director of informatics was confirmed yesterday by the Central Electoral Board (JCE), the body in charge of organizing the 2004 presidential election. At the same time, the JCE judges appointed engineer Miguel Angel Garcia as general administrator of the informatics department. The decision was made after the follow-up commission, presided over by Monsignor Agripino Nunez, had threatened to cease cooperating with that body. Luis Arias, president of the JCE, said that judges were divided in favor of Frias and appointing Garcia.
Rafael (Fello) Subervi, the former Tourism Minister who aspires to become the PRD presidential candidate for the 16 May 2004 election, said yesterday that President Hipolito Mejia would only be able to win the PRD party nomination through fraud. Subervi's wife, current Tourism Minister Miguelina Ortiz, said on the Julio Hazim TV program this morning that they are led to believe this because of the "attitudes of certain party members who feel they should remain in power at all costs." Subervi says that all surveys show he is the leading PRD pre-candidate. Subervi, Vice President Milagros Ortiz Bosch, Enmanuel Esquea and President Hipolito Mejia will participate in the party convention set for 14 December, at which time the candidate will be chosen. The three opposing Mejia have agreed to add their votes to the one of the three that receives the most. Four more PRD nomination hopefuls, who stand firmly against Mejia's desire to run again, will participate in a preliminary PRD convention this Sunday, 7 December. These are Hatuey de Camps, president of the PRD; Ramon Alburquerque, senator of Monte Plata; Rafael Flores Estrella and Jose Rafael Abinader.
El Caribe newspaper points out that an estimated extra RD$4 billion will be in circulation this month due to the 13th wage paid to public and private employees on occasion of the Christmas bonus ("regalia"). This amounts to an estimated payout of RD$2 billion for the government payroll and approximately RD$2 billion for private businesses. The government has indicated it would pay its bonus as of 10 December. Government paydays are the 15th and 25th of the month. National Treasurer Pastora Mendez says that the Christmas wage money is guaranteed, as the money is deposited in a savings certificate in the Banco de Reservas, the state commercial bank. The Central Bank reports that much more revenue will be circulating also as the hotels fill up for the holidays. The Central Bank estimates that by year-end 3.3 million foreign non-resident visitors will have entered the country, generating some US$3.1 billion - a record for Dominican tourism. The previous record was 2.8 million visitors in 2001, generating US$2.8 billion. In December alone, 517,973 arrivals are expected, generating US$200 million. This number does not include the thousands of expatriate Dominicans who return for the holidays with gifts and cash to spend.
A business mission from the Republic of China is on the island to study the Dominican market. The mission visited the Listin Diario newspaper and said they are interested in investing in banking, power, ports, telecommunications and the construction of highways and railroads, according to Liu Linlin, director of the Department for American Affairs of the Ministry of Commerce of China. He sees the Dominican Republic as the Caribbean nation with the greatest economic strength and ripest investment climate. While here, the Chinese business group is being assisted by the Chinese Chamber of Commerce. They feel that establishing formal diplomatic relations would assist their efforts at developing trade and investment between both countries. "We believe there are many business and investment opportunities in this country. The market is very open and a sample of that is the large number of international firms doing business here," said Linlin. According to the Chinese government, trade between the two countries was more than US$100 million last year. Trade from January-September 2003 stands at US$96 million, for a 20% increase over the previous year. He said that three Chinese firms lead the way in opening the Chinese market here. These are Corporation Zhenhua from Shanghai, which sells equipment for ports, particularly cranes for the Caucedo Port; the Tangshan construction materials corporation, which is participating in the construction of a cement factory in San Cristobal; and the China Corporation of Import and Export, which signed a memorandum for development of a US$90-million project in the northwest.
Listin Diario reports that Dominicans are drinking much less whisky. Whisky importer Diageo Dominicano, which represents the Johnny Walker brand, says there has been an overall 40% decline in sales compared to those in 2002. He says that consumers have lately opted for cheaper alcoholic beverages and criticized the fact that such increasing costs are in part due to augmented taxes. He says that taxation outweighs the profits generated by the sales and reports that only sales of the high-end Black Label whisky have remained the same. Jose Jimenez, spokesman for the company, is nevertheless confident that things will improve. "We have decided to continue investing in our brands because we understand this is a small economy. And while it is true that sales have suffered in the past year, they should come back. When we evaluate all the economic indicators, we note that these are not bad, because the generators for hard currency are growing," he said.
The case of the murder of Jose Castro in a household mutiny continues to make headlines. Castro died of gunshot wounds at the hands of his domestic help, in a plot hatched by Castro's wife, Miriam Brito, and his two teenage sons. The construction material entrepreneur was known for his brutal treatment of his family. The Listin Diario reported that Castro held a personal fortune of RD$200 million. In the wake of the tragedy, Brito is urging that the guardianship of her sons not be granted to her deceased husband's mother, alleging that his violent ways were learned at home. The Attorney General's child welfare department has granted provisional custody of the children aged 10, 11 and 13 to a journalist and friend of the family, with Brito's acceptance. According to lawyer Artagnan Perez Mendez, there is nothing that impedes the mother of the five children from retaining custody while she is in jail awaiting trial. The two elder sons are being detained at a San Cristobal juvenile detention center.
The Aguilas Cibaenas have won 10 straight games as they maintain their leadership of the Dominican Winter Professional Baseball Championship. The team is five games ahead of the Gigantes of San Francisco de Macoris and the Licey of Santo Domingo. Next in the baseball standing are the Estrellas of San Pedro de Macoris, who rank 8.5 behind, the Toros of La Romana, 9 games behind, and the Escogido of Santo Domingo, 11.5 games behind.
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