Public Works Minister Freddy Perez says that the budget for the government's first 100 days of its administration has been redirected to the eastern region of the country that suffered damages from Hurricane Jeanne. Perez said that the eastern provinces lost 13 bridges that were knocked down by swollen rivers, while more than 20 other bridges suffered significant structural damage. The minister said that priority has been given to repairing the crossing over the Chavon River. He said that provisional bridges are being built to allow all types of vehicles to traverse the river while the main permanent structure is being restored. According to the Listin Diario, an area over the Chavon River was equipped yesterday for vehicles making the crossing, while the bridge over the dam area continues to be for pedestrian use only. Minister Perez said the bridge over the dam will be rebuilt as it was originally designed and expects the work to take three months. To alter the plans of the bridge, he said, would entail a construction time of eight months. Perez estimated the cost to repair damage done to the bridges at RD$600 million.
The powerful lobby group comprised of the Central Romana and Casa Vicini sugar producing companies has requested that President Leonel Fernandez ask the United States to revise the sugar-related provisions included in the free trade agreement that was signed with the United States, as reported in Hoy newspaper. Because the DR's agreement has been docked to the Central American Free Trade Agreement, however, making such changes is not so easy. Osmar Benitez, the chief agricultural representative for the Dominican government at the negotiations, has called the discussions of the agricultural aspects the most transparent, clean and honest ever conducted by the sector.
Eduardo Martinez Lima discarded the notion of the country seeking arbitration through the World Trade Organization in view of the fact that the FTA is not yet in effect. This proposal has the support of President Fernandez. Central Romana executives Martinez Lima and Ramon (Papo) Menendez and Casa Vicini representatives Felipe Vicini and Campos de Moya met with the President, who was accompanied by Secretary of the Presidency Danilo Medina. Martinez Lima says the objective of the Presidential encounter was to find a Solomonic solution to the impasse.
The sugar producers want the DR to ask that the US either exclude sweeteners from the treaty or increase the sugar import quotas for the Dominican Republic, thus compensating them for the expected losses the companies will suffer when local manufacturers opt for the cheaper imported corn syrup. They said that during the negotiations in the Washington DC, they were only able to secure an increase in the quota of 10,000 tons. While Diario Libre explains that a potential solution could be an increased preferential US sugar quota, Hoy newspaper says that the DR is not in any condition to benefit from the increase in the quota.
While initially the sugar producers had indicated that 200,000 local jobs were at stake, Hoy newspaper reports that they have changed their estimates, now saying that some 8,600 small sugar cane producers that supply sugar cane to Central Romana could be affected, as well as another 400 from Casa Vicini and 2,000-3,000 other employees left jobless.
The free zone manufacturing industry has said that if the US suspends the FTA on the grounds that the corn syrup surcharge included in the tax reform last week violates the text of the accord, some 250,000 jobs will be at risk. President Fernandez is scheduled to meet today with the representatives of the free zone industry in Santiago, as reported in Diario Libre.
University professor Federico Cuello denies that he feels the DR would be better off to discontinue the FTA proceedings with the US, as stated in DR1's summary of his commentary from El Caribe yesterday. "But whether it is justified or not, it is a done deal and all we can do now is to try and improve it before it is ratified by the US Congress," he writes to clarify. "Contrary to other commentators of this issue, I happen to believe that free trade with the US is irreversible. I hope, nevertheless, that between now and the time it is ratified the contents of the agreement with leave the DR in a less unfair situation," he states.
Cuello had criticized the fact that, in order to sign the DR-CAFTA, the country agreed to dock its accord to the ongoing CAFTA negotiations, in which the DR's representatives were only able to bargain pre-selected items. "They couldn't change one comma to the text of the agreement," he lamented. "And they did nothing to dismantle the real barriers that impede us from exporting. They left our farming sector defenseless in return for the US$18 billion in internal aid, subsidized credits and the guarantees granted by the US."
Cuello stressed that his commentary sought to demonstrate the contrast between the signing of the World Trade Organization Agreement in 1994 and the DR-CAFTA 10 years after. "Where one was an unavoidable commitment, the other was much sought-after in spite of the fact that a less onerous alternative, the FTAA, is still under construction," he wrote. To contact Cuello, write to fcuello@aster.com.do
In his inaugural speech on 16 August, President Leonel Fernandez promised to begin a period of austerity that would reduce political patronage in government jobs. "We must eliminate the deputy minister positions in government that have not been written into the laws of each ministry," he avowed.
Listin Diario political commentator Orlando Gil writes today that this pledge, however, has not been put into practice. He observes that the jobs are being filled regardless, not because they are needed by the administration, but to satisfy the appetites of fellow party members who want a taste of power. Gil also comments that the posts are not being appointed on the requests of the ministers, but rather are being imposed on the ministers, who are then forced to work with personnel they would not have otherwise hired. He states that this is only a small part of the problem, with the major downside being that it burdens the upper levels of government and reduces their efficiency. "As the days go by, the number of deputy ministers has shot up like wildfire. He said the ministers do not know where to place the new underlings that have fallen from the sky given that their job descriptions require an office, assistants are other things that come with the post." He laments that while no one protests the decision a situation is being created where the work of others is being hindered.
Gil writes that international organizations that are crucial for economic cooperation are taking note of the situation. They feel the government needs to downsize, by spending less on employees and more on vital areas of development. Therefore, when they heard the President's words the first day of his government, they thought their assistance would be more effective. They are now finding, however, that these were empty words. Gil says the international organizations are not willing to finance superfluous spending for the government again. The scandal-ridden Mejia administration was sufficient proof that foreign aid should be subject to rigorous auditing, he writes.
"And they do not lack any reason for dispensing with 'more of the same,' a doctrine that is now achieving citizenship status in the country, because government after government applies it shamelessly." Gil writes that the national authorities, now more than ever, have to be aware that the country needs aid, and that this aid requires certain codes of conduct demanded both by multilateral organizations and European governments. "If these funds are to play a role partisan politics, with an insatiable political militance, or to wreak economic folly, [these bodies] would rather freeze their assistance and wait for better opportunities," he explains. To contact the author, write to orlandogil@verizon.net.do
President Leonel Fernandez signed Law 288-04, otherwise known as the tax reform, that is intended to provide the government with a windfall of RD$22 billion in additional revenues. The law will take effect on Thursday, 30 September in Santo Domingo and on Saturday in the provinces, according to the Listin Diario. The provision increases the ITBIS (value-added tax) from 12% to 16%. Likewise, it increases taxation on advertising from 6% to 10% immediately, and from 10% to 16% in 2005.
There could be price rises for beer, rum, cigarettes and cigars, in view of the increased luxury tax on these items.
On a positive note, annual wages of up to RD$240,000 will be tax exempt. That is, monthly wages of up to RD$20,000 will not be assessed.
Fernando Garcia, of the Ferreteria Americana and the president of ONEC, which represents large department stores in the DR, told Hoy newspaper that the buying power of the population has been reduced by 40%. He said that despite the impact of the tax reform and the augmented ITBIS from 12% to 16% consumer item prices could remain at present levels. He explained that the appreciation of the Dominican peso, down from RD$47 to US$1 to US$35.50 yesterday, will make up for the new tax increases. He said that wage increases should be held off until next year, to give time for businesses and the government to attain a certain level of stability.
Engineer Radhames Segura, the administrator of the Corporacion Dominicana de Empresas Electricas Estatales (CDEEE), told Hoy newspaper that he has been instructed by President Leonel Fernandez to renegotiate the Madrid Accord, the agreement that fixed the prices for power purchased from generators. He said he will also be reviewing the buyback of Union Fenosa power distributors, Edenorte and Edesur. "We are going to revise, audit and renegotiate these terms," he said. According to Segura, the government will revise the contracts signed with Haina and Itabo, as well as those signed with Cogentrix and Smith and Enron (who combined have an installed capacity for 470 megawatts). He said they hope to achieve reductions in the prices of generation, so that the distributors may access cheaper power, and thus reduce the sector's financial deficit.
Segura told Hoy newspaper that if all the power that is demanded were being dispatched, in a fully operational system, some 800 gigawatts would be delivered, which would facilitate a cost reduction of two cents per dollar per kilowatt hour dispatched, entailing savings of US$16 million a month. He said that the system is operating with a current deficit of US$25 million. The proposed savings would reduce this shortfall to a lesser US$10 million, he estimated.
When the power system was capitalized in 1998, Segura said the original plan was for the government to sign concession and share participation agreements only, and that, once the generators and distributors had assumed their roles, they would negotiate the terms for the purchase of power amongst themselves under market conditions. Instead, contracts were signed that benefited the generators and enabled them to quickly obtain profits. He cited the case of Itabo, which was handed over by the CDE on 8 September 1999 and was already turning a profit by December of that year.
By contrast, he said that power distributors became decapitalized, and that Union Fenosa claimed that of the US$202 million in capital it had brought to the DR, it had used US$145 million to purchase power due to the increase in generation prices.
Segura said that one of the transgressions of the past government was that, while quick to point out the problems with the contracts, instead of letting them expire at the end of their five-year terms, the Mejia administration extended them for another 15 years by signing the Madrid Accord.
Various sectors in the DR continue to be plagued with blackouts that often last up to 20 hours a day. While blackouts are not unusual in the DR, their prolonged durations since former President Hipolito Mejia lost the election on 16 May are causing major losses and inconveniences to daily living.
The president of the Supreme Court of Justice, Jorge Subero Isa, said that citizens must study the new penal procedures code to understand it. He said that as per the new law, the police can no longer arrest citizens in raid-like operations, nor can anyone be detained without a relative present. Subero also told Diario Libre that it will be up to the courts to apply penalties to those who violate the new Law of Freedom of Information Access. He expressed his agreement with those who are requesting that the names of the police officers who unlawfully used stolen vehicles be made public.
Nevertheless, a report in Hoy newspaper highlights the precariousness and contradictions between what is legal according to the new procedures and what is reality, citing the lack of office space, office supplies, vehicles, paralelgal staff, even telecommunications services for the assistant prosecutors to carry out their work. The new penal procedures code went into effect on Monday, 27 September. See http://www.hoy.com.do/app/article.aspx?id=24955
Hoy newspaper's online edition was updated this afternoon to reveal the names of those National Police generals and colonels who illicitly obtained luxury vehicles that were stolen, recovered, and never returned to their legitimate owners. The most prominent name on the list of offenders is that of retired General Jaime Marte Martinez, the former chief of the Police, who had 15 such vehicles assigned to him. Other names mentioned are retired Colonel Fausto Tiburso Batista, with 20 vehicles, and retired Brigadier General Pedro Hernandez Reynoso, who had 10.
According to the report, District Attorney Jose Manuel Hernandez said that others on the list include brigadier generals Yuri Ruiz Villalona (4 vehicles), Osvaldo Hernandez de la Cruz (7 vehicles) and Ernesto Ovalles Concepcion (2 vehicles).
On the list released to the press there is a section in which another 18 vehicles are mentioned, but not matched to the names of those who had been using them.
The chief prosecutor for Santo Domingo told the press: "By revealing these names, I am not assigning responsibility to these officers. We are investigating and that investigation is what will determine the responsibility they may have had."
Servio Tulio Castanos Guzman was appointed the new director of the Fundacion Institucionalidad y Justicia (FINJUS), after predecessor Jose Alfredo Rizek left to become the president of INDOTEL. A report in Diario Libre today says that Castanos is a summa cum laude graduate of law from the state university UASD, a well-known professor of law, and a former ambassador and legal consultant to the Senate and the Ministry of Foreign Relations.
President Hipolito Mejia decreed that the company Cheng Chua y Chow be authorized to use 60 meters of state territory to build part of their Cabanas Hey Okey, where rooms are rented out for hours. As reported in Diario Libre, Decree 747-04 was issued on 5 August 2004 – 11 days before Mejia left government – to authorize the construction on the sea-fronting land. The decree says that the Ministry of Environment had issued a no-objection from the Subsecretaria de Gestion Ambiental, as did the Ministry of Tourism. The decree is now being studied by the city government to determine whether, despite the existence of the Presidential order, they may implement a resolution of city councilors that would permit the municipal government to shut down this and other four motels. The city council determined that the motels are contaminating the Caribbean Sea with sewage waters, in addition to irregularly occupying the 60-meter sea border. The Presidential decree spoke of the government's role to promote touristic activities that contribute to the social and economic development of the country.
At least five people were poisoned, of which three have died, after eating a fatal lunch in Cotui. The group was comprised of laborers working at a Cotui farm in El Hato. The deceased were identified as Tomas Rojas, 34, Crucito Baez Nolasco, 56, and Jose Eduvirgen de la Cruz, 58. Two of the men died after reaching the Jose Maria Cabral y Baez Hospital in Santiago, while the two survivors were in delicate physical condition. Victoriano Hernandez, an intern at the Cabral y Baez facility, told El Caribe that the farmers had used a container that had previously contained a toxic chemical in which to prepare their meal.
Film producer Jose Enrique "Pinky" Pintor fulfilled his promise to premiere his film "La carcel La Victoria, el cuarto hombre" in the Dominican Republic at the La Victoria jail where it was filmed. The Listin Diario reports today that some 5,000 inmates gathered in the ball field of the prison to view the film on a giant screen. Hundreds of them had worked as extras, and some were given small speaking parts in the 18-day filming of within the prison itself. The film's international premiere took place the San Sebastian Film Festival in Spain and is next scheduled to participate in the Miami Film Festival. The film depicts scenes of violence, homosexuality and the drugs that are part of life in the DR's grossly-overcrowded foremost jail. On 4 October, the film will be shown in the Puerto Plata prison facility.
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