| Daily News - Thursday, 26 August 2004 |
It appears that the PLD party's planning during the interim overlooked the need to fill the bureaucratic posts with its members, only appointing its jobs commission on 12 August, just four days before the inauguration. This small lapse has been the catalyst for the delays and improvisations that have characterized the government bureaucracy during the past two weeks. According to the Diario Libre, municipal, provincial and intermediate committees of the party have devised long lists of the faithful to be selected for governmental jobs at the municipal, provincial and national levels. Unfortunately, the lists arrived in a chaotic manner and without any vetting of the people. The jobs committee is headed by party boss Reinaldo Pared Perez, and includes Lidio Cadet and Cristina Lizardo, all members of the PLD's Central Committee. The task appears to be too much for them. In spite of working very long hours and well into the night, they are struggling to maintain control of who goes where. Yesterday, Cadet guaranteed that the committee was working full throttle to finish their assignment is the shortest time possible, but he did warn the PLD loyalists to be patient. Presidential Minister Danilo Medina asked for calm among PLD members and acknowledged the fact that the process was moving slowly. Just yesterday, the PRD's administrator of the government radio and television system was asked to stay on at the post until a replacement could be named. Some violence has been reported in Bonao and Monte Plata, where angry job seekers were unhappy with the appointment of new local officials who are not from the region or do not belong to a certain PLD faction. Some reports make issue of the fact that none of the members of former Vice-President Jaime David Fernandez Mirabal's faction have received jobs.
After four rounds of talks, the government economic team and the Chamber of Deputies' special finance commission obtained a consensus on a new set of tax reforms. The fiscal package that won acceptance will produce RD$19 billion for the national treasury, RD$3 billion less than the original plan. The legislation was placed as the fist item on today's agenda in the Chamber of Deputies, according to Marino Collante, the spokesperson and president of the finance commission. Hoy newspaper reports that the government representatives, as well as Chamber president Alfredo Pacheco, expressed their satisfaction with the reforms. The newly-appointed head of the Customs Department, Miguel Cocco, said he felt the understanding that was gained with the opposition PRD party was a great step forward. Cocco told Hoy reporters that while the talks were frustrating at times, the result was very satisfactory and he applauded the work done by Pacheco and Collante. For his part, Pacheco said the new proposals presented by the government's economic team "didn't go over very well," as they did not incorporate any of the modifications that had been introduced into the tax package by Collante's commission. He acknowledged that, however, despite the fact there are still some differences pending, the modifications that were agreed upon last night will probably ease the bill's passage in a vote at the Chamber of Deputies.
Today's Diario Libre illustrates the amendments made to the original tax reform package as such:
Measures included in the original version that have been removed:
- 25% increase on alcohol and cigarette taxes
- New measures in tax administration
- Modified personal and business tax levels
- Taxes for professional services (doctors, lawyers etc)
- VAT (or ITBIS) raised to 16% on airfares, boat fares and insurance policies
- 3% tax on property transfers and company formations (SA or CxA)
- Payment of anticipated taxes (1.5%)
- VAT (or ITBIS) goes from 12% to 16%
- A tax of 0.12% on checks, with certain exceptions
- Luxury property tax starting at RD$3 million
- Inheritance tax of 5% on everything and a tax of 25% on donations
And pretty soon you are talking about serious money." This famous quote from the halls of the United States Congress seem very apt to describe what the Finance Ministry is trying to do: find out where a sum of RD$5 billion disappeared to. According to the Listin Diario, ministry technicians are investigating how this sum, which was produced in the Customs Department as part of the exchange commission charged on all imports, was spent. The funds were supposed to have been deposited directly into an account used to pay the foreign debt, but this was apparently not the case. According to Finance Minister Bengoa, "not one cent" was used to pay the foreign debt, and the former authorities sent the entire amount to the Finance Ministry and not to the Central Bank. Well, not all the money. According to Bengoa, total collection for the commission on currency exchange produced RD$12 billion, but only RD$7.936 billion was handed over to the Finance Ministry. Bengoa said that preliminary reports indicate that "off the budget" money was used by various government departments. To support this claim, he indicated that the 2004 budget had RD$2.55 billion penciled in for the payment of internal debts but RD$3.771 were paid on those accounts.
The latest bond auction produced annual interest rates of 37.75%, implying a reduction of the quasi-fiscal debt. The new interest rates on government certificates are nearly 13% less that the interest obtained just two weeks previously. In spite of these lower rates, says El Caribe, demand for the certificates was more than double the RD$3.0 billion announced for the auction, with investors wanting a total of RD$7.562 billion. Thus, one surmises that August has been a good month for the Central Bank, with interest payments falling and a reduction of the deficit. Currently, the Central Bank has RD$91.863 billion placed in certificates of deposit, including the latest group of certificates that accounted for RD$4.562 billion more than advertised. In his inaugural speech, President Fernandez referred to "RD$30 billion of inorganic money per year" and this new reduced interest rate paid by the Central Bank will relieve some of the pressure.
The government authorized a RD$200-million payment to the importers of propane gas at the same time that Finance Minister Vicente Bengoa announced the gradual reduction of the subsidy on propane that is the root cause for the current propane quandary. The new president of the refinery, Aristides Fernandez Zucco, told reporters from the Listin Diario that there was sufficient propane to supply the market for the next few days and that they were expecting a new load of five million gallons shortly. Meanwhile, Arturo Santana, who doubles as the president of both the Association of Propane Importers and Coastal, told reporters that Coastal had 630,000 gallons of LPG on hand, which would be enough to last until Friday when the good ship Emilan arrives with another 1.8 million gallons. Santana said that Coastal had received three more shiploads than normal in order to stabilize the situation after 16 August. Minister Bengoa announced that in the next few days they plan to gradually reduce the subsidy on propane for general use and bring the focus onto the poorer sectors and families. Bengoa indicated there would be a card that would be distributed by the "Plan Social" and the Industry & Commerce Ministry.
The anticipated news that the government would reopen negotiations on the various contracts with electricity generators and distributors became a reality yesterday, with an announcement by Ruben Montas of the Energy Commission. This is but one step in the government's process to resolve the electric crisis that is affecting the entire population. Other steps include a government program to promote energy economizing and conservation, as well as the strengthening of the institutions that service the sector. Montas said that he has begun to investigate the question of the supposed debts that the government holds with various energy suppliers, and, if they exist, find a way to pay them. Montas also revealed that in yesterday's meeting the President and the Energy Commission were clear on the need to improve the collection rate by the electricity distributors. Montas said that once the collection rate reached acceptable levels, the system itself would find an equilibrium. These measures go hand in hand with the US$50-million line of credit the President obtained from the local banks and the sum of US$12 million paid to Ege-Haina and Smith-Enron. Montas, the designated spokesperson for the energy cabinet, also pointed out that the subsidy for electricity would be focused, as the propane subsidy, on the poorest sectors.
It has come to light that former Attorney General Victor Cespedes ordered the release of convicted drug trafficker and former vice-consul in Port Au Prince, Haiti, Ormis Freddy Pena Mendez, for alleged problems that included high blood pressure and diabetes. Pena Mendez was arrested on 27 August, 2002 in Santo Domingo, along with Gilberto Antonio Pujols Pujols, Victor Ferreiras Contreras and Wilvio Medina y Plinio Perez, the driver of the apprehended vehicle. Agents from the DNCD found 42.98 kilos of cocaine in 46 packages stored inside the vehicle, as well as RD$16,000, US$5,000, two Motorola cell phones, an UZI sub-machinegun, a .38 Taurus revolver, a .22 caliber Raven pistol and a Smith & Wesson. None of the weapons were licensed. The police also found 16 passports, 11 of which were Haitian and one French. None of the passports were legal, either. Pena Mendez, a merchant in Duverge before the PRD's ascent to power, was convicted and sentenced to 10 years in jail and handed a RD$50,000 fine. He began serving his term in October of 2002 and was released on 14 August, just two days before the PRD left office.
A report in the Diario Libre says that the initiative to prevent crime and protect the people began with police on foot patrol yesterday who lacked any means of communication or weapons of any kind. That is how four cadets set off to make the rounds of an area on 27 de Febrero near Paris Street in Santo Domingo yesterday.
The article says that these cadets are not alone in their unpreparedness. In the National Police force there are less than 40 patrol cars to keep watch over all the barrios of the National District and the province of Santo Domingo.
The police seem reluctant to mention their equipment dearth publicly, says the report, and even the newly-appointed police chief, Manuel de Jesus Perez Sanchez, said he preferred to look to the future instead of the past, when asked about the deficiency.
National Police spokesperson Simon Diaz said that each group of police agents on patrol would contain one armed member and that each such group would be given communication equipment.
During the previous Presidency, the police agreed to accept equipment from the Armed Forces, but rejected the idea of conducting their patrols accompanied by military members.
Felix "Super" Sanchez will be running in the finals of the 400-meter hurdles at the Olympic Games in Athens, Greece today at 3:30pm. This is certainly the closest the Dominican Republic has come to a gold medal since boxer Pedro Julio Nolasco became the first Dominican to win an Olympic medal in the 1984 Los Angeles Games. Sanchez, the world champion of the event, has posted the best times of the year and has been unbeatable in every race on the European Grand Prix circuit so far. With string of over 40 races without a defeat, Sanchez aspires to reach the heights of the great Edwin Moses. Sanchez will run with the number 1539 on his jersey in lane 6, one of the preferred lanes for the 400-meter distance. The chief rival for Sanchez, apart from a dose of over-confidence, may well come from USA's James Carter, the only other runner in the finals with a time of under 48 seconds. Other Dominicans still in contention for a medal include Gabriel Mercedes, who starts his showdown in Tae Kwon Do against Mexico's Francisco Salazar, a bronze medalist in the world competition in 1997. Mercedes won the DR a bronze in 1999. Another to watch in Athens is the DR's Juana Arrendell, still an unknown factor until she takes the field in her event, the high jump. The qualifying height needed to make the finals is set at 1.95 meters, a height that Arrendell has not attained this year. According to Carlos Hernandez, the chief of the Dominican delegation, however, Arrendell has returned from her two months of training in Saint Petersburg in Belarus looking slimmer, stronger and much more confident.
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