The National Development Council (CND) has approved the RD$120.93 billion 2004 National Budget, which represents increased spending of nearly RD$38 billion over the budget for 2003. El Caribe's economic section dissects the financial plan and finds that debt payments will absorb 32% of the projected total, or RD$39 billion. This is a 52% increase over what was paid out similarly last year. Of the RD$39 billion, RD$24.11 billion will service the capital portion and RD$15.02 will go to pay interest. According to Daniel Garcia, the El Caribe reporter, the "pie" also has a big slice for the government's payroll. RD$30.288 billion has been assigned to public salaries in the coming year, for an increase of RD$4.25 billion over 2003's payroll. According to Garcia's analysis, the two large expenditures will tie the government's hands as far as public works goes. Only RD$14.6 billion will be available for projects, for a reduction of 14.4% over 2003. After its approval by the CND, the budget, which was prepared with assistance of the experts from the IMF, will be forwarded to Congress for final approval. According to Garcia, if the government's projections are correct, consumers will get a little respite next year, with inflation pegged at 14% and an exchange rate contained at RD$35 to US$1 for the year. Even so, this exchange rate represents more than a 100% peso devaluation compared to just two years ago. A net loss of 1.3% in the GDP is also predicted.
The Listin Diario newspaper reports that the government and the IMF have agreed on a new economic stabilization program that reaffirms taxes in effect since mid-year, ups the tax on alcoholic beverages and tobacco to 30%, and new taxation on loans and savings borrowing. The report states that the IMF mission will return to Washington, DC to deliver the agreement to headquarters. Technical Secretary of the Presidency Carlos Despradel says he expects the deal to be approved this month. Despradel also said the government has conceded to cut RD$9 billion in public spending, but to maintain the electric subsidies to those consuming less than 200kWh and to continue to subsidize the price of propane gas for domestic consumption. "We have agreed with the IMF that the country will have a manageable 3.5% consolidated deficit, which will lead us to macroeconomic stability in the medium and short term," Despradel is quoted in the Listin as having said. He also explained that the government rejected an increase or expansion of the ITBIS (value-added sales tax) base because of its effect on pricing of general consumption items. Despradel said the IMF had demanded there be a surplus of RD$35 billion to cover the commitments to savings certificates deposited at the Central Bank, increases in the cost of petroleum and the depreciation of the peso. He said the government expects revenue from the sale of the assets of the collapsed banks (including Baninter's former headquarters at 27 de Febrero and Winston Churchill avenues), in addition to new income from the 2% tax on imports, a 5% tax on exports, the US$10 increase on departure taxes, the 0.15% tax on check transactions and the increase from 4.75% to 10% of the exchange rate transactions surcharge. Despradel furthermore mentioned that the IMF agreed that the government would generate revenues to the tune of RD$11 billion more by increasing monthly power bills to residences consuming from 200-700 kWh by 4% and to those consuming more than that amount by 7-8%. Despradel reported a government deficit of RD$400 million a month with the power sector, and estimated it would subsidize the poorest households for up to RD$2.5 billion next year. The propane gas subsidy next year is estimated to be worth RD$6.35 billion.
The very astute Pedro Silverio is one economist who does not believe everything he reads in the official documents. In his op-ed article in today's El Caribe, Silverio looks at how the government puts a spin on its spending. Recently, Technical Secretary to the Presidency Carlos Despradel reported that there were indicators that pointed to the correct handling of public finances by the current administration. Among these indicators he mentioned the fact that total expenditures in relation to the GDP were less than those of the previous administration. Silverio says that Central Bank figures show a net increase of 13.4% and he explains that public expenditure cannot be looked at without taking into consideration its impact on the rest of the economy - especially the effect it has on private investment and consumption. While government investment climbed to 36.6%, private investment rose by a mere 1.8% over the same 2002 period, which is to say the push given by public sector investment was compensated by a fall in private sector investment, and the tendency has continued into 2003. As a consequence, says Silverio, we saw the paradoxical situation of the private sector having to make adjustments, in terms of consumption and investment, while the government made no corresponding adjustments to its own fiscal policies. In contrast, the government's fiscal expansion placed greater pressure on the exchange market, while a massive debt load was simultaneously taken on. These factors, in addition to an increase in the public payrolls, served to create huge uncertainty about the government's handling of its fiscal policy. The economist says that in practice the authorities' financial philosophy lacks "harmony" with the role of the private sector, which should be the motor that moves the nation's production. To the contrary, government officials are not the least hesitant in saying they do not believe in the business, by creating unnecessary conflicts and depleting the climate of harmony that should exist between the private and public sectors. Silverio finishes his comments by saying the government has to understand, once and for all, that it cannot continue to put all the weight of the economic adjustments on the consumers the investors. What is more, what is required is a greater sacrifice on the part of those who hold public office - even though this will go against their own political interests.
In another article in El Caribe, Elena Brineman, the head of the USAID office, said that everyone should pay for electricity. At the same time, she advocated a study to determine the real costs of electricity in order to obtain transparency in the market. Commenting on how 40% of the electricity is not paid for, her recommendations included an increase in investment, a reduction in the technical losses and thievery, the identification of real costs, payment by everyone for all power consumed and everyone's equal access to electricity. According to the economic editor of Hoy, Mario Mendez, the increase in electricity rates will lower the amount of money collected. At least, this is the opinion of Luis Moreno, the head of the Energy Institute at the UASD. Moreno says that it would be best to review the entire system of values that were agreed to in the Madrid Accords to see whether they are sustainable in the current situation. Moreno was clear in saying that if the distributors really cannot pay the generators, then the government should look at some sort of compensatory funding, because the consumer does not have to pay an excessive electricity rate just because there are problems with the distributors' collections. In the economic section of the Listin Diario, the electricity generators are asking for a weekly payment. Facing a US$200-million debt owed to them by the electricity distributors, the generators have asked Finance Minister Rafael Calderon to reopen talks with the Official Commission for Sustaining the Electrical Sector, in order to provide a schedule for weekly payments so that they can continue operating. The last payments were made to the generators in November. As a result, blackouts have returned to plague the entire country, where certain sectors must tolerate 12-hour periods without electricity.
El Caribe newspaper reports that the National Emergency Commission (COE) has issued 700 permits for firework vendors this year - an unprecedented number. The COE last year reported 84 cases of second- and third-degree burns in children ranging 8 to 15 years old, due to accidents caused by the explosives over the holidays. The peak days for fireworks are Christmas Eve and New Year's Eve.
A sad note in today's news is El Caribe's report that the Pearl F. Ort burn unit at the Luis Eduardo Aybar Hospital (formerly known as the Morgan) has not received its government subsidy for the past four months. According to sources at the hospital, at least 15 patients needing transfusions and medicines could have been saved. Dr. Eddy Bruno, a surgeon at the facility, explained the situation and lay blame on the public health authorities for the unnecessary deaths. According to Dr. Bruno, "It is not a problem of professional ability in our unit that has caused these deaths, it is a problem of finances. We are recognized as the finest burn unit in Latin America, but with empty hands we cannot save lives." In a document given to the press, the entire staff agrees that the current situation "has never been seen in the eleven years since (the unit's) inauguration." The Pearl F. Ort burn unit is the only facility of its kind in the Dominican Republic, as none of the public hospitals or private clinics have any such specialized unit.
The Dominican College of Physicians (CMD) told the press yesterday that 90% of the public sector hospitals are receiving monthly allotments that are well below the minimum needed. The president of the board, Waldo Ariel Suero, said that demands to boost funding have not been met by the public health authorities. Suero complained that despite the rampant inflation and declining buying power of the peso, the hospitals continue to receive the same allotments as one or two years ago. Aggravating the situation, Suero said, is the fact that the subsidies are now four, five or six months behind schedule. Patients seeking medical attention at public hospitals, today have to bring or pay for practically all their supplies. Only the physician's attention is included in the visit. Suero said the college would soon start efforts to secure 100% wage increases for physicians on the government payroll.
President Hipolito Mejia's intensely troubled PRD party is even more divided this morning after the three presidential hopefuls who were to challenge Mejia at the party convention abandoned the contest. Vice-President Milagros Ortiz Bosch, Rafael Subervi Bonilla and Enmanuel Esquea Guerrero withdrew their participation from any party convention that included Hipolito Mejia. Previously, the group had requested a postponement of the convention scheduled for last Sunday. According to a statement from the three, they withdrew because they were convinced the PPH faction (Proyecto Presidencial Hipolito) "had produced an unfavorable series of unacceptable situations that …would corrupt the internal voting process so much as to strip the results of all legitimacy." The group referred to the use of state funds to buy votes, the hundreds of thousands of names that were either added or subtracted from the voting lists and the "purchase" of party workers. The PRD is now split into three groups, each of which will attempt to secure one candidate for May's elections: the PPH faction, which supports Hipolito Mejiia; the three pre-candidates who have abandoned the show-down with Mejia, but not their aspiration to the nomination; and the anti-re-election faction that has already held its convention and nominated Hatuey De Camps as its flag bearer. Lawyers representing the PPH faction, sent an opposition to the Chamber of Disputes of the JCE, regarding the legality of that first convention. The JCE judges have not yet issued an opinion. Regardlessly, the Central Electoral Board (JCE) deadline for parties to register their Presidential candidates is 60 days prior to the election, or 16 March 2004.
According to the Listin Diario, Monsignor Agripino Nunez Collado, the coordinator for the National Dialogue, met with ambassadors from the European Union, Canada, the United States, and Japan. The diplomats voiced their worries over the political crisis affecting the country. Dubbed the "Mini Dublin Group", the ambassadors met with Monsignor Nunez to analyze the current situation. Maria Figa-Lopez, Spain's ambassador, served as spokesperson for the group and reported that the group perceives the nation to be tense and on edge. In a report carried by El Caribe, the ambassadors referred to a visit they had made to the Central Electoral Board (JCE). A statement by Eva Kendeffy, the German ambassador, made it clear that the purpose of the visit was neither to collaborate economically with the JCE, nor intervene in any way." As reported, the ambassadors want to be among the first international observers called for the next elections. Kendeffy told reporters, "We do not have an economic objective, because if we did, we would have used other channels. We have a normal interest in reading the newspapers and they are newspapers that reflect a very difficult reality, and so we decided to go to the source." Monsignor Nunez, as coordinator of the National Dialogue, lamented the uneasiness caused by the politicians and the fact that foreign ambassadors have to concern themselves with what is happening in the country. Nunez Collado called the politician's attitude "egotistical", in that everyone wants to be candidates for one party. Referring to the crisis in the PRD and the PRSC, the prelate said, "I don't want to say that we look at this as if (the ambassadors) were giving us lessons, but as a Dominican, I would have preferred that it had not been necessary."
Aeromar Airlines has promised to pay a collective US$1.5 million to ticket holders recently left stranded in New York. Meanwhile, a group of travel agents has asked President Hipolito Mejia to intercede in order to get another carrier for the marooned Aeromar passengers. They referred to the two Air Atlanta 747s currently parked at the Cibao International Airport awaiting their charter passengers from Punta Cana as a possible solution to the crisis. According to Juan Carlos Nunez, president of American Worldwide Travel, there are 5,500 Dominicans stranded in New York City. Aeromar said that although there may be as many as 6,000 passengers stranded in New York, they will only reimburse between 2,500 and 3,000 ticket holders, as the rest held reservations but had not paid for their tickets. Those Aeromar customers who had paid their passage in full can go to their travel agents or company offices to receive their refunds, according to Ryan Polanco, the company's vice-president.
Two Dominican popular music sensations, Chichi Peralta and Juan Luis Guerra, have joined forces with Spanish Joan Manuel Serrat, Dominican tenor Francisco Casanova and Puerto Rican Danny Rivera to make the plight of Bahia de las Aguilas known to the world. The stretch of beach in the southwestern province of Pedernales is regarded as a national reserve that should be safeguarded from construction. Ecologists say there is plenty of acreage for hotel construction in the environs, and that the pristine beach, which is as it was when Columbus first arrived on the island, should remain as such, only to be visited on foot. A video produced by the artists for Fundacion Jaragua will be shown on Tuesday, 23 December on Antena Latina, Channel 7, at 8pm, as reported in El Caribe newspaper. Chichi Peralta, who composed the theme song, said he had no idea how important the Bahia de las Aguilas was to the biodiversity of the Caribbean until he visited the area earlier this year and was inspired to compose the track.
In their second match of the 2003 NORCECA Zone Olympic Qualifying Tournament, the Dominican national women's team, ranked 14th in the world, defeated the Canadian team, ranked 20th. The Canadian women got off to a strong start in the first set with a score of 27-25, but fell to the 2003 Pan American Games gold medalists in subsequent sets of 17-25, 21-25 and 20-25. The 2003 NORCECA Olympic Qualifier, which runs from 15-21 December, represents a chance for the Dominican women's team to qualify for the 2004 Summer Olympics in Athens. Only the winning team will gain a berth in next year's Olympic Games, where the next highest world-ranked NORCECA Team not yet qualified will have a second opportunity to compete in the South American Olympic Qualifying tournament scheduled for the first week of January 2004 in Puerto Rico. Only the US women's team has already been assured a spot for the region in the 2004 Olympics. For more news and scores on the tournament, see http://www.fivb.ch
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