It is reported that President Hipolito Mejia is making a swift trip to the Central American state of Belize, to sign some agreements with the Belizean government and hold meetings with potential investors and other business representatives. According to the Diario Libre, Mejia will meet with representatives of SICA (Central American Integration System), which is comprised of Honduras, Guatemala, El Salvador, Nicaragua, Costa Rica and Belize, to discuss the recently completed CAFTA (Central American free trade agreement) with the United States. The President is due back in the Dominican Republic later today.
Jose Alfredo Rizek, the executive director of the Foundation for Institutionalism and Justice (FINJUS), comments today that the government may be trying to pull a sort of fast-track tributary reform and he alerts Congress to the challenge it has before it. Rizek writes to explain that if Congress approves the budget as is, it automatically approves the taxes whose revenues are contained therein. Rizek explained for DR1 Daily News that since the budgetary bill has a one-year duration, as approved by the Executive Branch, it would have to specify that the taxes would be of indefinite duration, if the intent is for these to continue. In an op-ed contribution to El Caribe newspaper, Rizek also focuses on what he describes as a "constitutional and legal trick" that was first designed by the late President Joaquin Balaguer. He raises the awareness that if Congress does not pass the budget, received just before the legislative body breaks for the holidays, the 2003 budget would be implemented instead, allowing the government to use the differences from one year to another at its own discretion. Rizek writes that his views were formed by putting aside the fact that the sword of Damocles hanging over us is held by the IMF, and urges reflection on the subject. In 1996, he recalls, when then-President Fernandez attempted a similar move - to pass a budget and new tax laws in one fell swoop - it was rejected by the PRD-majority Congress on the grounds that it was a legal absurdity. Rizek says that Congress must react. He mentions that since 16 August, the legislative body has not passed any bills of significance - with the exception of more bonds and debt. "Now is their sole opportunity to exert their presence as legislators and representatives of those who voted for them. It is not that they should reject the budget for 2004… but this is an opportunity to promote the required consensus so that the budget serves next year as an instrument for the development of the Dominican Republic as a nation." Rizek says that legislators should take note that only 15% of budgeted funds have been allotted to construction works and that the allotments to the education sector are pathetically meager. He said that if Congress were truly conscientious, it would reduce the Executive Branch's allotments for wages, travel and diet expenditures to the minimum, ensure that resources were directed to productive investments and insist that expenditures not have any further impact on the peso. He recognizes that the debt contracted by the state must be paid, but says that there is no reason to continue to be so generous with government institutions that have shown themselves to be only marginally relevant. Rizek concludes that while his readers may think him naive, it is Christmas, after all, a time during which everything is possible. The writer can be reached for comments at finjus@codetel.net.do
Hoy newspaper leads with a warning from within the PRD ranks that the 2004 budget is in danger of becoming the subject of internal party wrangles. This would be at the expense of the country's social and macro-economic development, said the Senate's budget committee president, Manuel Emilio Ramirez Perez, and the PRD Senator for San Cristobal, Anibal Garcia Duverge. Alfredo Pacheco, president of the Chamber of Deputies, had earlier said that legislators would not yield to pressures to endorse the budget, and that the allocation to Congress fell short of expectations. Senator Ramon Alburquerque (also a former Presidential pre-candidate) exhorted legislators to study the proposal closely and introduce amendments if necessary, with the good of the nation at heart. These pronouncements led Ramirez Perez and Garcia Duverge to plead with their colleagues that the budget should not become a political football: "We are aware that the economic situation is difficult and we cannot blame the government solely, because (the crisis) has external and internal causes, especially from the private sector and specifically to do with the collapse of several banks," said Ramirez Perez, going on to point out that the approval of the budget was essential for the IMF agreement to go through. "It would be irresponsible if we were to become the obstacle to the budget's approval because we were serving the interests of our own party." For his part, Garcia Duverge urged his fellow senators "not to make a song and dance" on an issue of such importance to the country's future and the government's social programs. The Listin Diario's main editorial today is stern in its criticism of politicians, who it says are already privileged enough. The writer says they should understand the need for budget cuts in a country where most people are too poor to afford the most basic items and services. This budgetary moderation is a pre-requisite for the success of the IMF agreement, which will result in a much-needed injection of capital into the Dominican economy. Any delay in the legislative process will only prolong the agony of the poorest members of society: "Anyone who contributes to extending this suffering does not deserve to be considered a public representative in the National Congress. It is as simple as that!"
Standard & Poor's ratings services said today it has lowered its long-term foreign and local currency sovereign credit ratings for the Dominican Republic from B- to CCC. With its continued negative outlook, credit analyst Richard Francis says the DR faces a severe liquidity crisis. He explains: "There is a substantial risk that delays restarting its two-year US$600-million standby program with the International Monetary Fund will further depress investor confidence, lead to additional capital outflows and heighten the risk of default to private creditors. Public sector external debt service totals nearly US$900 million in 2004, while the Central Bank currently holds less than US$280 million in liquid international reserves. Nearly 20% of this debt service is due to private creditors and, hence, subject to a default." Francis points out that the government is already running arrears with bilateral creditors and is applying unorthodox moral suasion on economic agents to support the foreign exchange rate. Standard & Poor's estimates that the government's 2004 borrowing requirement will approach 20% of the GDP, including refinancing of Central Bank certificates of deposit. This gap will be difficult to fill without multilateral support. Francis does not hold much optimism on the situation. "To date, the government's policy has failed to respond adequately to the deepening financial and economic crises," he notes. "Even if the government successfully presents a proactive policy strategy to reverse the crisis and re-establish its programs with multilateral creditors, there is a substantial risk that poor policy implementation could derail the program anew, particularly in the run-up to the May 2004 Presidential elections," he concluded. http://www2.standardandpoors.com/
Franco Uccelli, who follows the DR for the Bear Stearns brokerage firm, interprets the S&P downgrading in an update today. "For the Dominican Republic to avoid default in 2004, it needs to get the IMF program back on track (time frame: next three weeks) and keep it on track (time frame: next 12 months)." Uccelli explains the rating reflects concern regarding whether the DR will uphold an agreement with the IMF and policy implementation in the DR in the context of the highly-contested 2004 Presidential election. But Uccelli feels the risk of not getting the IMF program restored is relatively low, regardless of the fact that the revised IMF letter of intent is contingent upon completion of a series of prior actions. Uccelli feels there will be a favorable outcome for the DR, mentioning the visit of John Taylor from the US Treasury Department and Roger Noriega from the US State Department as indications that the "US is on the Dominican Republic's side." He writes today, "While there is no indication that such support may translate into direct financial assistance, we believe that the highly-publicized visits of senior Bush administration officials to Santo Domingo were intended to show both the multilaterals and the Dominican government and congress that the restoration of an IMF program is the US's preferred course of action."
The peso continued its upward trend with latest reports valuing it at RD$35 to the US dollar, although dollars remain scarce in the currency exchange market. A comment on a morning radio program gave rise to rumors that Vimenca Bank was in danger of collapse. This report was dismissed outright by the Central Bank, whose manager, Apolinar Veloz, told Listin Diario newspaper that Vimenca was one of the healthiest banks in the sector.
According to a report in Hoy newspaper's economic section, the Spanish private company Union Fenosa is still waiting for the government to pay the US$15-million initial payment for the re-acquisition of power distribution companies EdeSur and EdeNorte, as was agreed in October. The government had presented Union Fenosa with a post-dated check, but this is reported to have bounced. The agreement, signed between the Dominican government and the Spanish company, stated that an initial payment of US$15 million would be made immediately and the remainder of the total agreed price of US$362.5 million would be paid over the next 12 years. Meanwhile, the power sector authorities are saying they can guarantee power supplies over the holidays, but cannot say what the situation will be once the vacation is over. The prolonged power-cuts, which have increased in the last two weeks, are once more being attributed to the government's non-payment of debts owed to the private electricity generation companies.
The Listin Diario reports that the Codetel has cut phone service to the Education Ministry, in view of a RD$20-million debt to the company. Julio Cordero, administrative chief at the ministry, says that they requested a payment from the budget office for RD$8 million to cover last year, but have not received any response. This year RD$12 million is due. Cordero had earlier said the ministry only received 60% of its 2003 allotments. The Listin Diario says today that of the RD$11.48-million allotment, the education department has only received RD$6.7 million - or 58.6%. As 2003 winds to a close, and the Christmas wage is soon to be factored in, the Education Ministry will have received only 70% of its allocated funds, at a time when inflation is eating into the real costs. As of March, the education department, headed by Vice President and PRD Presidential candidate for 2004 Milagros Ortiz Bosch, owed a sum of RD$42 million to private schools that accepted students on ministry scholarships. A RD$1.8-million program to rent 200 direly-needed locations has not yet been funded. Ortiz Bosch took a leave of absence from the Education Ministry to campaign for the PRD nomination.
Although the festive season is fast approaching and with it the promise of the traditional political truces, in which political rivals lay down their weapons and submit to the spirit of the season, Vice President and Presidential hopeful Milagros Ortiz Bosch has made a blistering attack on President Hipolito Mejia. Ortiz Bosch told her supporters that "the President is mistaken if he thinks I am a fool who doesn't know what's going on in the country." She was reacting to the contents of a letter written by Mejia in which he describes her, Rafael "Fello" Subervi and Enmanuel Esquea Guerrero as having "run away" from the 21 December primary convention. The three say withdrew their participation in protest of the alleged fraudulent activities of the President's supporters. Ortiz Bosch was critical of the President's priorities: "He says he supports social security, yet he stopped it in favor of the Pan American Games. He says he is fighting for small-account holders, but he returned the money to the richest depositors: 80% of the money belonged to the very rich." The Vice President also defended the decision to withdraw from Sunday's primary. "We wanted a transparent and clean convention, which was dismantled because we had the vision and took the risk, and the organizing committee could not proceed with just one man, despite pressures to the contrary." The Vice President said she was satisfied that the fraud had been detected before the event, and not as is usually the case, in the aftermath. She said that the pre-candidates opposed to Presidential re-election had always tried to find the way that would benefit both the party and the nation. "Rest assured that there are paths and there is victory, we have defeated fraud and deceit, I am full of faith and optimism and am sure that step by step we will win this battle."
The three PRD Presidential hopefuls who withdrew from the primary scheduled to have taken place this Sunday reaffirmed yesterday they will cast aside their personal ambitions and select one single candidate to challenge President Hipolito Mejia. They have tentatively agreed to take part in the re-scheduled convention, now set for 18 January. Milagros Ortiz Bosch, Rafael "Fello" Subervi Bonilla and Enmanuel Esquea Guerrero will decide which of them will square off against Mejia before the end of the Christmas vacation. They have not yet agreed on how the selection will be carried out, however. The Listin Diario newspaper points out that this could mean two more conventions: one in which the three compete for a single candidacy and another for the final stand-off against President Mejia. In the meantime, the PRD's convention committee will be working to regularize the controversial members' list, said by Mejia's opponents to have been manipulated by his supporters, the PPH movement. The Central Electoral Board (JCE) is also said to be promising a ruling on the legality of the PRD's dual conventions dispute before the vacation is over.
The dean of the PUCMM university's law school in Santo Domingo, Flavio Dario Espinal, writes today on El Caribe's opinion page on how the ruling PRD party has structured its own kind of populism as a propagandistic answer to the economic crisis. For the government, this is about dividing society between "the powerful" and "the poor," he writes and points out that the government has insisted on blaming the business sector for the economy's breakdown, painting the business sector as speculator, tax evader and insensitive to the people's problems. By contrast, the authorities are promoting the perception that they represent the "true" interests of the masses. This redemptory form of speech seeks to validate the justness of the government's cause versus the mercurial interests of the business sectors that take advantage of the crisis. Espinal, a former Dominican ambassador to the OAS, writes that the government has turned this into a case of the rich against the poor, the haves and the have-nots, the good and the bad. "Not that we want to ignore the great inequalities in Dominican society, but this type of populist talk will not take Dominican society very far, as shown by the experience in other countries," he says. Espinal concludes: "Of course this type of talk has proven to be politically effective in certain cases, usually when the opposition uses such talk to exert pressure on those in power - not when it is the talk assumed by those in government who have an evident quota of responsibility in the crisis that they want to exclusively blame others for." The writer can be reached for comments at fdespinal@codetel.net.do
The United States embassy has announced new requirements for those seeking entry visas to the US. As of Tuesday 16 December, applicants must go through a new procedure, and can expect to wait as long as 17 weeks for an appointment with a consular official. Prospective travelers are therefore advised to make their plans well in advance. After paying the US$100 fee in pesos at the equivalent exchange rate, applicants need to buy a PIN (personal identification number) at the bank. Next, they must call the visa information service at (809) 200-3232 and arrange for an appointment for travel, study, business and transit visas. There are two types of PINs: one costing US$5.25 and another which costs US$16 and which allows the applicant an extended telephone conversation time of 15 minutes.
This morning's papers report on the dramatic events in the Palace of Justice in the eastern side of Santo Domingo yesterday. A man who was appearing before an assistant district attorney was detained after he assaulted and made death threats to the ADA, Sandra Gomez. He was handcuffed and herded into a cell with dozens of other inmates, whom he was able to take hostage using two firearms. The police officers had not noticed, despite carrying out a routine body-search, that he was carrying not just one, but two weapons, hidden in his underpants. The siege began at 9:30am and lasted until 3:30pm. The man, Francisco Alberto Santana, described as being "of Haitian origin" and nicknamed "El Brujo" - the witchdoctor - held 62 people hostage before being overpowered and shot dead by the police. Although there were some minor injuries, no other serious injuries were reported. The two officers who had taken Santana into custody are under investigation for neglecting to detect the weapons.
A minor tremor measuring 3.9 on the Richter scale was registered at 5:00am Thursday. The quake was felt in the northern provinces of Santiago and Puerto Plata, which have been experiencing regular aftershocks since the 6.5 earthquake of 22 September, although they had diminished in recent weeks. This time reports of the tremor are much more geographically staggered, coming from as far away as the province of El Seibo in the east and San Juan de la Maguana in the southwest. No damage has been reported and the epicenter was calculated as being just north of Puerto Plata.
El Caribe provides us with some respite from the gloom and doom of the day's news with the encouraging story of the La Zurza neighborhood, located on the Isabela river bank under the Jacinto J Peynado Bridge in Santo Domingo. This part of the city has been the setting for an initiative funded by the European Union, with the involvement of 23 local community organizations. Its aim is to clean up the area, which is in a particularly severe state of filth and decay. Residents complain that a plot adjacent to the local school is used as a dumping ground for derelict cars, domestic appliances and even dead animals. The new project will consist of a refuse collection program for recycling, which will be carried out by community members (10 collectors and 40 promoters) in the areas that the municipal refuse trucks cannot access. Each household will contribute RD$1 per day to the scheme. The newspaper's editorial hails the project as "an excellent social initiative. A good example of how people can improve their neighborhood, their city or their country, without waiting for others to do it for them."
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