| Daily News - Monday, 13 September 2004 |
Presidential Technical Secretary Temistocles Montas sent a letter on Friday to Senate leader Andres Bautista, requesting that the legislature eliminate the clause added to the fiscal reform bill that levies a 25% tax on corn syrup sweetener imports. The Fernandez government had asked the Senate not to make any changes to the bill sent by the Chamber of Deputies, so as to hasten its passage. If the Senate makes any modification, the bill would return to the lower house for its approval anew. The surcharge is being challenged by the US Trade Representative Office that say it would be contrary to the bilateral free trade agreement (DR-CAFTA) signed in August. Lobbyists from the DR's two dominant sugar companies say the cheaper priced sweetener would reduce their ability to compete locally. The USTR Office says the inclusion of the 25% charge would suspend the DR-CAFTA indefinitely. On the other hand, the American Chamber of Commerce in Santo Domingo and the Free Zone Association are against any action that would imperil the DR-CAFTA.
The Executive Branch, in the same letter to Bautista, urged that Congress swiftly pass the fiscal reform package in order to close the existing fiscal gap.
The Central Bank says that inflation this year will be 10% more than originally estimated. The nation's economic authorities are now forecasting year-end inflation of 45-50% instead of the 35% originally predicted. The Central Bank upheld its previous forecast of a 1% economic decline this year, despite second-quarter growth of 2.2% that pushed the first half of the year's GDP to 0.8%. The Central Bank report only encompasses data until June 2004, and thus does not reflect any measures taken by the new administration.
For more on the report, see http://www.bancentral.gov.do/
Franco Uccelli of Bear & Stearns comments today on the Central Bank's recently released first-quarter figures that indicate the need for reductions in government spending.
According to the Central Bank report published over the weekend, the nation has recorded a non-financial public-sector (NFPS) deficit of RD$12.5 billion (3.5% of Gross Domestic Product), a quasi-fiscal (Central Bank) deficit of RD$14.1 billion (4.0% of GDP), and a consolidated public-sector deficit of RD$26.6 billion (7.5% of GDP) during the first half of the year.
Uccelli writes that "after the former Mejia administration missed its key IMF fiscal targets for mid-year, the new Fernandez administration is now determined to generate an annualized fiscal adjustment equivalent to some 4% of GDP, the result of 2.5% of GDP in additional revenues, which are contingent on the approval of the fiscal reform currently under congressional consideration, and 1.5% of GDP in reduced expenditures."
He comments on the positive signs of stronger-than-expected growth (the economy expanded by 0.8% in the first quarter of 2004 in the wake of 2.2% growth in the second quarter), the recent appreciation of the peso and a tighter fiscal stance, which factors should collectively ease the pressure on the country's fiscal accounts during the second half of the year. Nevertheless, he concludes that "delays in the implementation of the government's fiscal reform plan and the country's inherent fiscal rigidities will likely make recording a consolidated public sector deficit for 2004 of less than 5.7% of GDP very unlikely."
Dominicans nationwide continue to suffer the effects of the propane gas shortage that has gripped the country since the Mejia administration lost the election in May 2004. The shortage of propane primarily affects taxi drivers and households that seek to purchase the fuel sold at the LPG stations at the subsidized price of $25 per gallon. The subsidy is only applied to propane sold in 100-lb tanks or smaller. The scarcity stems from the distributors' inability to place their orders in a timely manner because of the government arrears owed to them for the subsidy portion given to the public. The Fernandez administration recently eliminated the subsidy for those purchasing tanks of less than 100 lbs.
Listin Diario columnist Orlando Gil says that despite their efforts, journalists have not been able access the list of police officers who benefited from the use of recovered stolen vehicles that were not returned to their owners. Gil says that while the reason for the reluctance to publicize this list of names is not known, it suggests the presence of a cover-up and renders the institution guilty as a whole. "The National Police, as an institution, should not be responsible for the personal actions of unscrupulous officers," he writes. "But until the names are given, public opinion will continue to hold the entire force accountable," he writes.
His commentary includes the account of a young TV host whose Mercedes Benz was confiscated from her possession. The woman believed the car to be rightfully hers as it was a gift from a friend. This friend, however, turns out to be a former high- former Armed Forces official and the ownership of the car has been thrown into question. Gil says this is surely not the only case of third-party beneficiaries of the illicit vehicles.
The priest of the Iglesia Santa Ana in Navarette declared that drugs are readily available in the town, as reported in Hoy newspaper. This statement comes on the heels of the assassination of seven men, whose bodies were found in a house under construction last week. Priest Felipe Enerio Valerio commented that the bodies bore more than 10 bullet wounds each and he gave credence to the police report that determined the crime had been planned. Investigators believe that seven people, of whom one remains at large, were involved in the mass homicide. Of the seven, four have been apprehended and charged with drug trafficking.
"This tragedy had been in the planning because the conflicts between the groups were escalating. Even in the park, they would occasionally clash because drugs were being sold as if it were rice in the shops," he told the newspaper. He said that the situation had so degenerated because the authorities have turned a blind eye to the activity. According to Valerio, there are 20 points of sale in the city and "everyone knows where they are." The parish priest furthermore said that police officers are involved in the trafficking of drugs.
The newspaper includes the opinion of a city lawyer who said that silence is the best accomplice, given the fear that the drug traffickers generate in the population.
Attorney General Francisco Dominguez Brito said that violence is on the rise in general in the province of Santiago. As reported in El Caribe's headline story this morning, he said that "in the past days" at least 15 people had been assassinated. He said the authorities are attributing these deaths to the "settling of narco-trafficking accounts." In addition, he said at least 10 taxi drivers have been murdered and 20 women have been reported raped. The newspaper states that none of these crimes have been solved.
Police Chief General Tomas Holguin de la Paz said that the police are stepping up their patrols in the center of the DR's second city. "What is important for the authorities is to put a stop to this situation," he told El Caribe.
Court of Appeals prosecutor Vielka Calderon said that the recent violence could be traced to the massive amount of pardons granted to prison inmates during the previous government. According to the report, 2,932 individuals were released from prisons across the country, many of whom were accused of drug trafficking.
Page 2 of Hoy newspaper comments today on the lack of synchronization of Attorney General Francisco Dominguez Brito and District Attorney Jose Manuel Hernandez regarding the legal case against business magnate Luis Alvarez Renta. Last week, Dominguez revoked the order that released Alvarez Renta from prison for reasons of poor health on the grounds that it was improperly issued. Twenty-four hours later, District Attorney Hernandez said the order's rescindment was impractical because Alvarez Renta would not be sent back to jail in light of his case being granted an "auto de no ha lugar," a legal term that dismisses charges against a person for lack of evidence. Alvarez Renta was arrested in June 2003 as part of the ongoing investigation into the Baninter scandal that involved some RD$55 billion.
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