The Fernandez government kicked off its welfare program, "Comer es Primero" (Eating Comes First) with the distribution of debit cards with a balance of RD$550 available for use by 6,000 poor families in the Los Guandules slum. This is a pilot program. The debit cards can be used to purchase food in grocery stores that are participating in the program. Fernandez guaranteed the program will not be affected by corruption since there is no handling of cash. The plan is to extend this pilot program to 25,000 families before the end of the year. Eventually, some 250,000 families will benefit from the program that runs under the new Unique Benefit System (Siuben), that is identifying low-income potential beneficiaries nationwide.
In addition to purchasing groceries at participating neighborhood grocery shops, the debit cards can also be used to buy propane gas at subsidized prices, get funds available to assist parents with children in public schools, for social security programs, among others to be included in coming months.
The president of the Basque Country, Juan Jose Ibarretxe and the mayor of Biarritz, France Didier Borotra are in the Dominican Republic for the meeting of the Biarritz Forum. The forum is discussing "The State and Governance in Latin America." Topics to be covered during the two-day encounter of past presidents and heads of government are the legislature and governance and the media and governance.
The mayor of Biarritz, Borotra has championed the seeking of unity among Latin American nations. On several occasions, he has spoken up at international forums to express that regional unity will contribute to strengthening the economies of these countries and to positive changes in social aspects. Furthermore, he feels a united Latin America is in a better position when discussing issues with Europe and the United States.
The welcoming event opens tonight with a dinner at Altos de Chavon hosted by President Leonel Fernandez and First Lady Margarita Cedeno. The event continues on Thursday at the Global Foundation Democracy and Development, the research and think tank center of President Leonel Fernandez.
Former Presidents Jaime Paz Zamora of Bolivia; Ernesto Samper, Colombia; Rodrigo Borjas, Ecuador; and Valentin Paniagua from Peru arrived for the meeting.
The World Trade Organization has ruled that the exchange surcharge imposed in the Dominican Republic on imports is a discriminatory tax against freedom of trade, Juan Guiliani Cury, deputy minister of Foreign Relations for economic affairs told El Caribe newspaper.
The surcharge was disputed by Honduras in the specific case that the tax affects imports of cigarettes from Honduras. On 9 December 2003 Honduras took the DR to the WTO court on grounds of applying discriminatory procedures to calculate the value of imported cigarettes, including the selective tax on consumption, and for requiring a discriminatory stamp to be placed on imported cigarettes, as well as requiring that a bond be deposited by the importers to be able to sell in the Dominican market, as well as the 10% exchange surcharge and the 2% temporary surcharge on imports. The Honduras position is in support of the British American Tobacco multinational, the leading vendor of cigarettes in Central America, which seeks to increase its market share in the DR and complains about discriminatory trade barriers. BAT seeks to compete with the strong local business group, E Leon Jimenes that manufactures Marlboro cigarettes. In 2003, some 173.5 million boxes of cigarettes were manufactured in the DR.
The WTO determined that the 2% temporary surcharge is inconsistent with trade rules, but because it expires in December, will not press this issue.
Guiliani said that if the DR and Honduras do not reach a friendly agreement before the 20 October deadline, the trade body will issue a resolution addressing the matter.
El Caribe points out that a definite WTO ruling could mark the end of the Dominican government being able to secure significant revenues through the exchange surcharge. El Caribe newspaper estimates that it has represented RD$9.24 billion for the government from January to July 2004.
The hours of blackouts have considerably declined since the weekend, at least in several neighborhoods of Santo Domingo. Blackouts that stood at 20 hours a day have declined this week to around 12 hours a day. El Caribe newspaper reports that power on line has increased after the negotiations between the government and the companies have advanced under Finance Minister Vicente Bengoa and CDEEE administrator Radhames Segura. By Friday, the companies and the government should have conciliated debts, and negotiated how the billing to government institutions and subsidies to low-income clients will be paid.
Customs director Miguel Cocco Guerrero says that his department will give industries a 50% discount on the base declared value of machinery on which taxes are applied. He told Listin Diario that the discount is offered as part of a plan to help local industries renew their equipment and technology. He said that now that the country is on the verge of being practically an open market it is essential that industries better equip themselves to compete. To request the discount, he said businesses should address a letter to his department with the customs clearance documentation and the copy of the purchase bill of the equipment. The discount, he clarified, does not apply to the 10% surcharge nor to the 2% temporary surcharge on imports that is in effect until December 2004.
Bear Stearns Central America and Caribbean Month Report issued 6 October reveals that the DR has missed another coupon payment (on its 2006 bond) and is again making use of the 30-day grace period.
The practice of postponing payment to the ultimate deadline was begun in the final days of the Mejia administration and Franco Uccelli, reporting on the DR for Bear Stearns, comments that it has become the usual, and "the market seems to have hardly noticed."
On the positive side he mentions the enactment of the fiscal reform. Furthermore, he writes that the Central Bank is looking to capitalize on increased local confidence to stem the burden of servicing the country's quasi-fiscal debt by extending the maturities and indexing the interest it pays on its US$3 billion in outstanding CDs.
In his analysis of happenings in the month of September, Uccelli also mentions that after meeting with IMF officials in Washington, a Dominican government delegation was scheduled to travel to France to conduct another round of negotiations with the Paris Club. "We believe that the outcome of such talks could have a strong bearing on the potential restructuring of the country's commercial debt."
Meanwhile, he points out that the DR bonds have rallied significantly during the past two months and yields have tightened, validating the outperform recommendation Bear Stearns has had on the credit. "However, our model suggests that prices are now at levels that represent full value under a market-friendly restructuring scenario," he writes. Bear Stearns has revised its recommendation on the DR to "marketperform."
Geoffrey Gottlieb of Goldman Sachs brokerage firm in the 5 October Emerging Markets Daily Comment focuses on the DR and mentions that bondholders have formed a steering committee to assist in any eventual debt restructuring. He believes this could happen in December or January, before the January coupon payment date. Gottlieb says that it is still unclear what portion of 2004 arrears will be pushed into 2005. "If the authorities can avoid capitalizing interest on bond payments, we assume they would because this step makes any deal less attractive, all else being held equal. However, we think the financing looks sufficiently difficult that this is unlikely."
He comments on the return of the Dominican delegation that traveled to Washington for meetings with the IMF. He comments that the issue holding up the resuming of the IMF program is financing in 2005 where a gap of several hundred million dollars persists.
Gottlieb says that Goldman Sachs sees some form of restructuring as an inevitable portion of the gap-filling strategy but it remains unclear whether this would be adequate. "The US$100 million in bond interest payments alone would be insufficient and in any case, we do not see the government capitalizing 100% of the interest payments. Non-bond private sector debt service is considerable at US$160 million and this offers some possibilities," he explains. He concludes: "But the authorities may also go back to the Paris Club where there is roughly US$150 million in claims that could be restructured (pre-cutoff date debt service)".
Cardinal Nicolas de Jesus Lopez Rodriguez urged a purge of the Police to confront the wage of crimes that is affecting the country. "I believe the chief of the Police is a serious man, of good will, but he needs to purge the Police because if he doesn't, we are tieing up dogs with sausages," he said yesterday. He said that persons that were lying low in the past government now seem to want to destabilize the present administration with the wave of delinquency. He says he has no proofs, but many people are thinking this way. He said that there is too much coincidences that a month into the new Fernandez government, there has been a significant increase in violent crimes, assaults, rapes and theft. "The phenomenon needs to be studied, to ascertain whether it is simply coincidence or there is an attempt at creating chaos," he told journalists when visiting the offices of the governmental low cost medicines program, Promese.
The District Attorney Manuel Hernandez Peguero has requested a ban on former Police Chief Jaime Marte Martinez leaving the country. The now retired general is under investigation for his involvement in the case of the stolen vehicles that were recovered by the police and thereafter used by police officers and persons with connections in government. Hernandez Peguero says that they have proof of the involvement of several police officers, including those that have been named already.
So far some 118 vehicles have been returned that were irregularly used by police officers and civilians connected to persons with political influence. Diario Libre carries today the story of Diego Pena, owner of a Mitsubishi Montero 2003 that was stolen. In his attempt to sue Mirquella Aguasvivas after finding her name on an insurance policy in name of the vehicle, found out that yet another person had been using the vehicle. As reported in Diario Libre, Luis Alcantara de la Rosa, spouse of Aguasvivas, purchased the vehicle from a dealer a year ago. When he sought to change the registration, he was not able to do so. The Department of Recovery of Vehicles of the Police informed the couple they had purchased a stolen vehicle.
The Police kept the vehicle but never returned it to the rightful owner. The couple had already taken out the insurance in the name of Mirquella Aguasvivas, and that was how the name of Aguasvivas was identified by its real owner, Diego Pena. The chassis number of the stolen vehicle was changed. A new certificate of ownership in the meantime had been issued to a Oscar Rudy Barrientos Moreno under the altered chassis number. This is dated 10 August 2003.
The Police refused to release to Pena the name of the officer that had used his vehicle.
The Police announced the arrest of Bartolo Ramon Rosario Peralta (alias El Viejo) believed to be behind the robbery of RD$25 million as reported by three employees of the Leonor & Asociados exchange house in the Colonial City on Monday. Spokesman for the Department of Criminal Investigations of the Police, Jose Rafael Castro said that they had been on the trail of the man since Marchen, when RD$15 million was stolen from the same company in San Francisco de Macoris. Rosario was arrested in the Invivienda sector in Santo Domingo Este.
Meanwhile, Listin Diario reports today that the Police and the District Attorney suspect that the employees that denounced the robbery of the RD$25 million could be involved in the theft. Judge Rosalba Garip ordered that the employees be kept in jail. She based the decision on statements by the president of the exchange house who declared that one of the men received a call and went to the bathroom. Owner Gustavo Leonor Martinez is also suspicious that his employees offered no resistance nor suffered any injuries.
A millionaire contraband of nine kilos and 900 grams of cocaine was confiscated at the Punta Cana International Airport yesterday. The National Drug Control Department (DNCD) reported that three employees of the ground cargo handling company were arrested for investigations. Bueno Torres, spokesman for Vice Admiral Ivan Pena Castillo of the DNCD said that the drugs were discovered by trained dogs in a suitcase with a double lining that would have been transported to Madrid on an Iberworld flight.
Dominican fashion designer, Leonel Lirio has been recognized internationally once again, as reported in El Caribe today. Cynthia Olavarria, representative of the Puerto Rico town of Salinas, last Saturday won three awards in the first competition to choose the Puerto Rican candidate to the Miss Universe contest. Olavarria won the best dress, fantasy and best designer awards wearing outfits made for her by the Dominican designer.
Leonel Lirio first won international acclaim as a designer when Amelia Vega's national dress won first prize during the Miss Universe 2003 contest. Likewise, Lirio also was responsible for the dress Vega won when she was crowned Miss Universe 2003.
Lirio had earlier won the second place for typical attire in the 2002 Miss Universe pageant, when he desired the costume used by Ruth Ocumarez, a runner up in that pageant.
The winning dress for the Miss Puerto Rico candidate is a white outfit with elaborate head piece and details that suggest the salt mines of the area that Olavarria represents. Lirio received a US$1,500 cash prize, a trophy and the right to design the typical dress that the Miss Puerto Rico will use during the Miss Universe pageant.
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