President Leonel Fernandez, in the presence of Miami Governor Jeb Bush at the Biltmore Hotel in Miami, announced that the Dominican Republic would vote for Miami to be made the permanent secretariat of the Free Trade Area of the Americas. Fernandez's predecessor Hipolito Mejia had committed the Dominican vote to Panama City. "The DR and President Fernandez have consistently been one of Florida's strongest supporters in the region," said the governor. "This commitment to Florida by President Fernandez will have tremendous impact on our ongoing campaign to bring the FTAA secretariat to Miami." Bilateral trade between the DR and Florida represented $4.9 billion in 2003.
Miami, which is vying with Panama City, Port of Spain (Trinidad) and Atlanta to host the FTAA, has also received the support of Costa Rica, El Salvador, Honduras, Nicaragua and Uruguay. The Trinidadian capital has the most support, however, given the promise of the collective support of the 14 Caricom independent states and Venezuela as well, as reported by Caribbean Business journalist John Collins.
Collins says that a number of other countries have indicated they would support Miami if the selection process goes to a second round. On the other hand, he says, there are indications of some resistance to Miami's candidacy in both Latin America and the Caribbean and support for Panama, as a result, appears to be growing.
Central Bank Governor Hector Valdez Albizu said yesterday that the International Monetary Fund Standby Agreement should be resumed in November, meaning that the country would receive US$1 billion in fresh resources. Valdez Albizu, who spoke to the press after a meeting between the business sector and the Central Bank, said that the country is currently meeting the requirements of the financial body. Valdez Albizu explained the national situation to the assembled businesspeople and described how they are dealing with the quasi-fiscal deficit. The Central Bank governor also encouraged them to purchase Central Bank certificates of investment, which he touted as offering excellent yields.
Geoffrey Gottlieb of Goldman Sachs comments on the Dominican Republic's current state of play in the economy, negotiations with official sector creditors and its pressing financing needs. To begin, Gottlieb predicts that the DR will resume its agreement with the IMF. He highlights how bond prices have rallied impressively since July, reflecting a general improvement in the perception of emerging markets bonds, as well as a lower risk in the case of DR bonds specifically.
He also comments that another part of the story are the fairly positive economic indicators that have emerged in recent months and suggest the Dominican crisis will be relatively mild by emerging market standards. Gottlieb says the DR's economy should continue to recover.
Regarding the indicators, Gottlieb points out that real GDP growth actually increased by 0.8% during the first half of the year. He writes that, barring any unforeseen events on the debt front, a growth of at least 3% is likely by as early as 2005. Furthermore, he says the external accounts have gone from a deficit of 3.7% of the GDP in 2002 to an expected surplus of 7.4% in 2004. Nevertheless, he points out that while there has been significant import compression, there has been a rather modest export response that reflects the fact that 80% of exports (from free zones) operate entirely in dollars and are thus more immune to changes in the real exchange rate.
Another positive point is that capital flight has subsided, a fact that has allowed a substantial strengthening in the exchange rate. The peso's appreciation is of benefit to the government, as it requires fewer pesos to pay its foreign debt and dollar-denominated obligations, such as fuel imports and debts to the electricity sector.
Gottlieb also points out that inflation has now fallen to near single digits on an annualized basis, and that the quasi-fiscal deficit resulting from the issuance of 12% of GDP in Central Bank certificates appears to be lessening.
"In general, the crisis has not been as deep as witnessed in other emerging markets and economic indicators are almost uniformly pointed in the right direction," he writes.
In terms of challenges ahead, he describes two areas where matters are most pressing: the banking and electricity sectors. He writes that the banking sector is severely undercapitalized and has relied on its surplus liquidity so far. He describes the electricity sector as an implicit liability of the government that will need substantial regulatory improvements and a significant cash injection in order to operate effectively.
For the complete report, see http://www.dr1.com/news/2004/101204_gs.pdf
After two weeks of a gradual reduction in blackout hours, residents in Santo Domingo received grim news today, as reported in Hoy newspaper. AES is threatening to shut down its Andres liquefied propane gas-powered plant, citing continued government arrears.
The Ministry of Public Works has requested that Aerodom and its affiliates disclose information on their operations to ascertain whether or not they have met their obligations as per their 1999 airport concession contract. Listin Diario reports that Minister Manuel de Jesus (Freddy) Perez Gomez has requested key information to determine the status of their commitments by way of an audit. The newspaper says that Aerodom was contractually bound to an investment of US$203 million in its first three years of operation, specifically US$96 million to Las Americas International (Santo Domingo); US$47 million to Gregorio Luperon International (Puerto Plata), US$55 million to Arroyo Barril (Samana) and US$5 million to Maria Montez (Barahona). The Listin Diario says that now, five years later, the company has only put up US$119 million, despite the dollarized charges for airport services provided.
The newspaper says that the audit will also investigate affiliate companies, such as the construction company Civilcad, now known as Sinercon, as well as the companies Impreglio and Initec, the overseer of the works entrusted to Aerodom. Despite Initec's duty to independently supervise Aerodom, Listin Diario's sources indicate that they are receiving remuneration from Aerodom, which, as the newspaper points out, places Initec in a situation of economic dependence.
The report also says that Sinercon, which is owned entirely by the Hazoury family (also the majority shareholder of Aerodom) together with Spaniard Jesus Barderas form a majority in the decision-making process of Aerodom's board. The newspaper points out that the companies contracted for the supervision of public infrastructure works normally answer to a government body, such as the airport commission (Comision Aeroportuaria), and not to the concessionaire (Aerodom), and are in turn paid by the government to avoid conflicts of interests that could affect the integrity of an independent supervision.
Listin Diario reports that the Ministry of Public Works is interested in correcting any irregularity that could affect the quality, scope and operation of the works and equipment of the airport concessions.
Listin Diario says that the ministry is aware that Impreglio is no longer part of Aerodom, as it was subsequently removed by the board. The newspaper also mentions that despite being one of the companies that won the bid for the airport concession, the departure of Impreglio from the consortium or its capacity as an Aerodom shareholder was never expressly authorized by the Airport Commission, nor by the government.
The Ministry of Public Works has requested that Civilcad/Sinercon provide information on the status of the works and equipping in order to compare it to information provided by Aerodom, Impreglio and Initec. The Listin Diario source points out that the fact that the leading shareholder of Civilcad/Sinercon is also the leading shareholder of Aerodom is being viewed by the ministry as a conflict of interest, given that engineer Abraham Hazoury is the common denominator in both parties, as he is both judge and jury in the decision-making process of Civilcad/Sinercon.
In addition, the Listin Diario reports that the Public Works Ministry has also requested YVR Airport Service LTD, the operator of the airports, for its guarantee that the works are being implemented and equipped as promised, in order to achieve the utmost level of efficiency and safety. Furthermore, architect Fred Goico has also been notified, as his designs were those approved for implementation by the contractor.
Aerodom, the company that oversees all airline operations in the DR, told the Listin Diario that while the contract they signed on 7 July 1999 called for an investment of US$203 million in a first phase, it also established that if international long-term financing could not be obtained, as is the present case, the investment needed would be in the amount of US$33 million plus a sum equal to the specialized airport fees, for a investment commitment as of July 2004 of US$105 million. Aerodom maintains they have fulfilled their contractual obligations, alleging an investment of US$145 million directly to the airports, a sum that is some US$40 million more than required by their contract.
The National Police announced that some 15,562 agents have been assigned to patrol city streets, of which 5,562 have been designated to the National District and Province of Santo Domingo. This number is up from the 4,000 agents who were previously assigned to street service under the former police chief. Metropolitan Transport Authority (AMET) traffic agents have been given additional duties and will now be responsible for preventing and fighting crime.
The Listin Diario reported that most of the 27,800 members of the National Police force had been performing administrative duties, or had been delegated to services outside of the police. Since his appointment, incumbent Police Chief Major General Manuel de Jesus Perez Sanchez has said that the police must be on the streets to combat crime.
Santiago prosecutor Raul Martinez says that several of the minors being questioned by the youth court judge for involving themselves with a pornographic website will assist them in identifying the people responsible. Martinez said that while no one has been arrested yet, they are working on various leads to solve the case. Judge Antia Beato said that approximately 50 youths from the Santiago slum neighborhoods of Baracoa, La Joya, La Cambronal and La Otra Banda, many between the ages of 13 to 15, posed for photographers who told them the photos would be used to find them spouses abroad. Despite the ongoing investigation, the photos are still online.
US law obliges such models to sign a release and show legal form of ID to certify that they are of legal age. US laws apply in this situation because the website is hosted from the United States. If the website owner cannot produce these documents to prove the models are all adults and have signed releases, then a legal case can be filed against them and their operations shut down. In the case of those models who signed releases and are of legal age, there is no course of action to be taken. For more on the topic, see http://dr1.com/forums/showthread.php?t=35266&page=2&pp=15
Air Force swat teams combed an Iberia flight that was bound for Madrid, after an anonymous call indicated there was a bomb was on board. Accompanied by trained dogs, the investigators revised the plane but did not find anything unusual. It was later discovered that the anonymous call was placed by a businessman who did not want his partner to leave the country. Police arrested the man who made the call, his partner and his secretary.
Harold Priego, the political cartoonist who imbues his characters with what everyone thinks but dares not say, announced that his popular Boquechivo cartoon character will be made into a movie titled "Boquechivo, Presidente." The film will be released in time for the 2006 congressional and municipal elections, he told Diario Libre, the newspaper in which his daily cartoons appear. Angel Munoz, of "Perico Ripiao" and "Nueba Yol" fame, will direct the production. Munoz explained that the Boquechivo film will not be about Dominican political parties, but will represent a prototype of any Latin American government. The plot will deal with how they take the protagonist, a totally anodyne candidate for the presidency, to success on the wings of "the investors," who are the villains of the movie. Boquechivo was created by Harold Priego and Rafael Molina Morillo when the latter was the director of the Listin Diario. When the Central Bank intervened in the Listin Diario last year, the newspaper chose to discontinue the daily cartoons, which were often subtly – and sometimes blatantly – critical of the government. The cartoon then was hosted by the free newspaper, Diario Libre that has a circulation larger than the Listin Diario
Eyes in the DR are on Manny Ramirez and David Ortiz, third and fourth bat and pitcher Pedro Martinez of the Boston Red Sox, and Alex Rodriguez of the New York Yankees as they fight to represent the American League in the Major League baseball playoffs. Channel 37 is transmitting the first game of the American League championship tonight at 8pm. Pedro Martinez will be the opening pitcher on Wednesday, 13 October. For comments from Boston and NY fans with a Dominican perspective, see http://dr1.com/forums/showthread.php?t=35294&page=2&pp=15
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