During the opening ceremony of the National Hotel & Restaurant Association Trade Show at the Dominican Fiesta Hotel yesterday, President Leonel Fernandez announced the formation of a tourism cabinet to design and support a sustainable competitive strategy and his plan to consolidate the achievements of the sector. The tourism cabinet will be made up by the ministers of Public Works, Tourism and Environment, as well as the director of the National Potable Water and Sewage Institute (INAPA). Fernandez said that the tourism sector cannot act independently, given its importance to the economy, and he encouraged the sector's increased diversification to conquer new markets. Fernandez called tourism the potential flagship of the Dominican economy. For this to happen, according to the President, the tourism industry needs more promotion and support from the state. "This means that the Ministry of Tourism will have the support of the central government for promotion, advertising and to conquer new markets," he said.
Fernandez highlighted that the country does not have a structural financial crisis, because the nation's main hard-currency producing sectors – tourism, export manufacturing zones and remittances from abroad – are not in crisis. He explained that the economic problems of Dominicans have to do with public finances, with the collapse of three banking institutions and the quasi-fiscal deficit that the government is now confronting. He said the resolution of the quasi-fiscal deficit will bring back the stability of the 1990, restore confidence and stimulate the creation of new jobs and wealth for the country, as reported in Hoy newspaper.
President Leonel Fernandez announced yesterday that he would seek a two-year Stand By Agreement with the International Monetary Fund (IMF). He said that this would provide more funding than the agreement that was signed earlier this year by the Mejia government, but which was suspended after that administration failed to comply with the terms established. Fernandez said that he would send a team to Washington to present the Dominican position. Fernandez told reporters from the Listin Diario that the uneasiness of American authorities regarding the renewal of the agreement has been supplanted by a positive attitude towards the Dominican Republic attaining the goals set forth in the program of economic stability.
Talking about money, President Fernandez said that he would seek a two-year deal that would bring resources of more than the US$1 billion now contained in the agreement under suspension. That agreement, signed in August of 2003, provided for a first disbursement of US$120 million to reinforce the foreign reserves of the Central Bank. The country would also benefit from 437.8 million in special draft privileges equal to US$600 million, and of which 87.6 million were disbursed a week later at a total of US$120 million. Of the total amount of money that was considered in the initial IMF agreement, US$657 million was to come from the IMF and another US$400 million from the World Bank and the International Development Bank.
The IMF resident economist in the Dominican Republic, Ousmene Jacques Mandeng, says that the lower interest rates and longer time frames are clear signals that the measures being taken by the Central Bank are generating confidence in all sectors. He said that this will help reduce the quasi-fiscal deficit held by the central institution, and he pointed out that last week it emitted certificates of deposit for 365 days, subject to weekly auctions. As reported in the Listin Diario, the economist thinks that this is another clear signal that interest rates will continue to fall, representing a change in attitude on the part of the population. For Mandeng, the last five auctions carried out are of great assistance to the Central Bank, because they help the bank avoid a series of upcoming maturity dates. Last month the Central Bank reduced the interest rates on investment certificates yet again. At the 25 August auction the bank sold certificates at 35.99% at 90 days and at 37.46% at 182 days, a very positive sign. Former auctions were for 30.45% and 60 days. Referring to the ongoing legislative process related to the new tax proposals, Mandeng said that he does not know what the final proposal will contain, but that if the results are those indicated by the Technical Support Office of the Congress (OPA) which was created just three months ago, the programs would reach RD$19 billion and this would "be fabulous."
President Leonel Fernandez appointed new members to the Monetary Board. The members of the board that approves monetary policy are now Governor of the Central Bank Hector Valdez Albizu, Finance Minister Vicente Bengoa, Superintendent of Banks Rafael Camilo, Hector Rizek Llabal (San Francisco de Macoris businessman closely related to the former major shareholder of the salvaged Banco Mercantil), Manuel George Hazoury (formerly of the Banco Gerencial y Fiduciario, bought out by the BHD Bank, and the governmental Banco de Reservas), businessman Miguel Feris Iglesias (of the Cesar Iglesias manufacturing group and former president of the board of directors of the La Nacional de Ahorros y Prestamos loans and savings entity), engineer Ramon Nunez Ramirez (a TV and Hoy economic news commentator with the Grupo Corripio), electrical engineer Cesar Nicolas Penson (former president of the Association of Industries of Herrera), and businessman Emilio de Luna Peguero. Consuelo Matos de Guerrero (formerly director of the National Housing Bank-BNV during the past Fernandez government) was appointed secretary of the Monetary Board. Another member is Pedro Silverio, manager of the Central Bank, former director of the CenAntillas economic think tank of the PUCMM university.
The Customs Department announced that as of 10 September it would double the charge for imports arriving without having paid the consular invoice fee. The new charge will be RD$12,000 per shipment. On 30 August, Customs issued notification that it would be increasing the present charge of RD$6,500. The president of the National Association of Wholesale Importers, Domingo Espinal Collado, said that the increase is excessive, arbitrary and inopportune. He told Hoy newspaper that instead of eliminating the consular invoice, as President Leonel Fernandez had promised to do in his past government, a step backward has been taken by increasing the charge. Espinal Collado said that the consular invoice is a non-tariff barrier to trade and that its upped cost will dishearten the people, who are expecting reduced prices of goods in light of the recent appreciation of the peso. He said the worst thing would be for every government institution to start doubling or tripling the taxes and fees that they apply administratively. He requested that Congress review the situation of the consular invoice in the tax reform currently being studied in the Senate. Espinal Collado said that apart from the Dominican Republic, the only other country that applies such a fee is Nigeria.
He said imports are already being hit by a 10% exchange commission, a surcharge of 2% on imports, the expected increase in the ITBIS from 10 to 16%, plus new taxes on financial transactions.
The CDEEE's administrative board has ordered a review of the contract that brought about the buyback of the two electricity distributors, Ede-Norte and Ede-Sur, by the Mejia administration from the Spanish company, Union Fenosa. In addition to examining the terms of those contracts, the CDEEE has also decided to renegotiate the contracts that govern the purchase of electricity from the IPPs (Independent Power Producers), such as Cogentrix, Smith-Enron or Monte Rio. Also to go under the microscope will be the infamous "Madrid Agreement" that fixed the rates per kilowatt to all-time highs. The CDEEE will ask the General Accounting Office for an audit of the operations conducted in the previous administration, with a parallel audit to be performed by an international company contracted especially for this purpose. Finally, an inventory of the two distributors' assets will be carried out. Radhames Segura, the CDEEE administrator, told reporters from Diario Libre that the electric officials do not have the moral authority to demand the citizenry to pay more for electricity without having revised the contracts that have caused so much trouble. Ede-Norte and Ede-Sur are 98% owned by the government.
President Leonel Fernandez appointed Doctor Nelly Perez as the new director of the Dominican Institute of Social Security (IDSS), and Bienvenido Martinez will as deputy director. Perez was the governor of the San Cristobal province during the past government of President Fernandez.
Diario Libre reports that the team at the Foreign Relations Ministry is comprised of: Carlos Morales, Minister of Foreign Relations; Alejandra Liriano, foreign policy; Juan Guilliani Cury, economic affairs and commercial negotiations; Rosario Graciano, consular affairs; Jose Manuel Trullols, administrative affairs; Mercedes (Conchita) Cabral, cultural affairs.
India's Foreign Affairs Minister Rao Inderjit Singh will arrive in the DR this Sunday for an official three-day stay. The Fernandez administration has plans to begin formal relations with India, opening a first-time embassy in India. The focus would be to strengthen a hi-tech business relationship.
News sources indicate that the Fernandez administration is also contemplating new embassies in China and South Africa in the near future.
The United States Embassy is reportedly pressuring the Dominican Senate to modify the tax reform proposals currently under review there. Reports say the US wants to amend Paragraph 9 of Article 11, which calls for an additional sales tax of 25% on locally made soft drinks manufactured with sweeteners with high fructose content. Sources in Congress told the Diario Libre that this measure would affect syrups imported from the United States. The DR Senate's vice-president, Augusto Matias, warned that the inclusion of the tax on syrups could have serious implications on the DR-CAFTA agreement.
After much debate, the fiscal reform legislation was sanctioned by the Chamber of Deputies, from where it was forwarded to a special Senate commission. These senators are currently meeting with technicians from the Permanent Auditing Office to study the bill. If the US succeeds in making the change, however, the legislation would have to be returned to the Chamber of Deputies and the process would begin anew.
During the first weeks of the new PLD administration, there has been no shortage of accusations flying back and forth in the press. Currently, the publicity surrounding former Attorney General Victor Cespedes Martinez, who issued a prison release for his first cousin for purported "humanitarian" reason, has produced a new arrest warrant for the cousin, Roberto Cespedes Martinez. Incumbent Attorney General Francisco Dominguez Brito revoked the release order of his predecessor, issuing a new order for the arrest of the freed convicted murderer.
Over at the National District's Fourth Court of Instruction, Judge Alfredo Rios Fabian ordered that father Domingo Espinal be transferred to Najayo Prison, based on charges that he sodomized a young boy.
The defense team of former banker Ramon Baez Figueroa has announced it is preparing a series of accusations against former President Mejia, former Central Bank Governor Jose Lois Malkum, and the recently retired Colonel Pedro Julio "Pepe" Goico, in connection to alleged fraudulent acts perpetrated in various state ministries. Lawyer Vinicio Castillo Seman, the spokesman for the legal team, told Diario Libre that they are studying new evidence concerning the mismanagement of funds. At the same time, the lawyer said he was sorry to see that the new agriculture minister had kept several of the former officers on board, because, as allies of the PPH leader and former Minister Eligio Jaquez, they had access to the archives that contain evidence of frauds committed.
Judge Victor Martinez of the National District's Second Court of Instruction sent former Immigration Director Miguel Vasquez and Lieutenant Colonel Francisco Bloise Olmeda to a criminal court because he had found "serious, grave, precise proof" that seriously implicate the two men in fraud, falsification of public documents, racketeering and an abuse of trust that prejudiced two businessmen from Singapore and Malaysia. According to the case file, the police officer received US$44,422 from Ng Choon Seng. The former immigration official claims the money was used to deport illegal Chinese.
Wanted: 68 OMSA buses somewhere in Santo Domingo and Santiago. The Pandora's Box that is the Metropolitan Office for Bus Service (OMSA) is beginning to open up. In addition to searching for 68 buses that have disappeared, the new officials are also planning to reduce personnel and are investigating a possible fraud that involves drivers and onboard cashiers. Both OMSA and the General Accounting Office are performing an audit of the organization's inventory, both in Santo Domingo and in Santiago, in order to find out who has the 68 missing vehicles. According to OMSA, there are 54 units missing in Santo Domingo and 14 missing in Santiago. Word has it that they were "loaned" to institutions and persons of some influence. Ignacio Ditren, the head of OMSA once more, told reporters from El Caribe that once the units are identified as "missing" he "will proceed as the law requires." Just as the chief of police did yesterday, Ditren gave a 72-hour grace period for those with buses or other OMSA property to return them. Ditren told reporters that of the 926 buses belonging to the institution, only 198 were functioning when he took over a little over a week ago. He said that today there are 256 units operating on the streets. El Caribe had revealed the disappearance of the buses based on a study by done by Hamlet Herman, and while the case of the 14 missing buses in Santiago was also revealed, the former authorities had done nothing to solve the issue. Ditren said that he and his people began monitoring the use of fuel and counting the number of passengers that use each bus. Ditren denounced what he called a "fraudulent association between drivers and cashiers that permits money to escape." He said that between "40% and 50% of the money collected by the buses was ending up in the pockets of individuals." Ditren also announced the arrival of technicians from the Mercedes Benz factory in Brazil, who will work in conjunction with Dominican technicians and report on the conditions of the rest of the fleet. He said that representatives from Hyundai are also in the country to help resolve the issues for those units.
Diario Libre publishes a Page 2 commentary that urges the government to forego the tradition of awarding government jobs to those who were active in the political campaign. Homero Figueroa says we should learn from the founder of the Japanese Tokugawa Iyeyasu dynasty, who refused to wear a borrowed hat in battle, only to don it after winning the battle. "It is after the victory that one must protect oneself," he told his men. Figueroa recommends that the government apply this wise advice to the local situation. "Government is a war against malice," he says. He explains that in times when power is but a promise, the man of the moment is surrounded by disinterested citizens, but when he reaches power, he begins to feel the stares of those who expect recompense. He alerts that a cabinet made up of such individuals will not be coherent. "Fit the helmet on tight and may the governor reward ideas, not favors," he recommends. "For those who helped in the campaign, a sincere pat on the back should suffice."
AMET officers have issued 167 summonses for littering to an equal number of drivers. Even people walking the streets can and will be issued a summons for throwing garbage on the street. While public opinion is divided on this, most of it is nit picking since AMET agents are not supposed to be charged with enforcing environmental issues. Others think it's a great idea and will help to reduce the 789 tons of garbage that is picked up each day from the gutters of Santo Domingo. Fines ranging from RD$500 to RD$1,000 are being levied at the street litterers, so the measure is expected to have some effect. Of the 167 summons issued already, however, 23 have been declared without merit.
Olympic gold medalist in the 400-meter hurdle race and local hero, Felix Sanchez, runs again today in the Memorial Van Damme, TDK Golden League meet in Brussels, Belgium. The race is scheduled to take place at 21h20m, or 3:20pm local time, with the competition to be aired on Channel 15 from 1pm to 4pm.
Sanchez is still in the running for the US$1-million TDK Golden League jackpot, or at least a share of the prize that is paid to those individuals who win their individual league events. Others competing for the jackpot are Swede Christian Olsson (triple jump), Bahamian Tonique Williams-Darling (400m) and South African Hestrie Cloete (high jump). The jackpot will be split following a final meet scheduled for 12 September in Berlin. To claim their prize money, the athletes must also take part in the World Athletics Final in Monaco on 18/19 September.
http://www.sport.be/memorialvandamme/live/2004/
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