President Leonel Fernandez urged a reform of the educational system in the Dominican Republic in order to respond to the true needs of the new economic and social development models the nation needs to immediately adopt. He announced the creation of the National Commission for Excellence in Education, a forum that, as of January, would serve to discuss and promote national dialogue on the sorely needed educational reforms.
Furthermore, the President announced during a workshop on superior education held at the Fundacion Global, Democracia y Desarrollo yesterday that the nation's first community college will be installed at the ITLA facilities and will be a pilot program for future community colleges across the country. Daytona Beach Community College of Florida, the Fundacion Global, Democracia y Desarrollo and a group of businessmen of the eastern Province of Santo Domingo are backing the Community College of Las Americas. The college will reportedly offer short-term technical programs that would enable students to enter the labor force in a less than two years. ITLA is located one kilometer from the Las Americas International Airport, near Boca Chica.
September's tax collections were 7% less than those of August, says a report in El Caribe today. The newspaper indicates that the decline does not appear to be related to the regular cycles of the economy, given that in September 2003 the tax department reported an 11.7% increase (up RD$416 million) in tax revenues for September compared to August 2003. This year, taxes paid in September represented RD$362.6 million less than those paid in August. The newspaper does not, however, specify whether last August was an extraordinary month for collections, given the fact that it marked the end of a government administration, which could have an impact on the analysis when compared to 2003.
Secretary of the Presidency Danilo Medina said on Sunday that the Fernandez administration was handed a country with a budget that was already consumed for the next four months and with enormous debts. The Tax Department has indicated that several large companies had advanced the Mejia administration their tax payments that were promptly spent prior to the government turnover and thus affecting the present cash flow of the Fernandez administration.
According to the report in El Caribe, tax collections in September were up 21.66% compared to September 2003, but the increase is not sufficient to compensate for the 48% inflation accumulated over the past 12 months.
In the past nine months of the year, the government has collected RD$45.8 billion, or 84.5% of what it had projected for the entire year.
An IMF delegation arrived in the DR last night to continue talks on the letter of intent the Dominican government is to submit in order to resume the stand by agreement with the IMF. Stevens Phillips heads the 10-person mission that will be working with the Dominican economic team. As reported in the Listin Diario, the economists will seek to find new resources, in the understanding that the tax reform will not produce sufficient resources to cover the government's needs and debt obligations.
The Listin Diario reports that of the amounts determined in the original two-year standby arrangement signed in August 2003, the Dominican Republic would have received US$618 million. Of this amount, however, only US$200 million was disbursed to the Mejia administration due to violations on two occasions of the fiscal and monetary terms of the accord. Listin Diario reports that the resumption of the pact could mean that the DR will have access to US$1.2 billion from the IMF, the World Bank and the InterAmerican Development Bank.
Franco Uccelli of Bear Stearns reports on the IMF mission that arrived in Santo Domingo last night to negotiate the terms of a "new" agreement with the Dominican government. Uccelli says that, according to reports, the purpose of the visit is to reach a consensus on the contents of the Dominican Republic's new letter of intent, as well as on the complementary fiscal measures designed to compensate for the shortcomings of what he calls the somewhat diluted tax reforms recently approved by the DR's Congress. The original reform package was intended to generate 2.5% of the GDP in additional revenues for the government, while the version ratified will only produce 1.8% of the GDP in extra income.
Uccelli comments that the emphasis of the negotiations between the government and the IMF will be on fiscal matters, since that is where the most severe deviations from the old stand-by program occurred, and because the government's recent monetary measures have been accepted by the IMF and have produced positive results.
"At the moment, it is unclear whether a brand new agreement with the IMF will be drafted or if the suspended one will be revised," he writes. "What is clear, however, is that there appears to be good disposition from both sides of the negotiating table to finalize an agreement as soon as possible."
Uccelli explains that according to the most recent government timetable, an agreement with the IMF could be restored by the end of November or early December, thus paving the way for the multilateral disbursements to be renewed shortly thereafter.
Uccelli reports that, in addition to the IMF mission, also in town for a visit with President Leonel Fernandez are IDB president Enrique Iglesias and a handful of high-ranking World Bank officials. Representatives from the three multilateral entities are scheduled to analyze the challenges confronting the Dominican economy and current and future financial assistance programs with the President and his economic team.
"Our interpretation of this meeting is that it represents a concerted effort from the multilaterals to make sure that they and the government are on the same page and that their future actions will be carefully coordinated," he writes. "Moreover, we believe that the meeting with Fernandez and his team will be used by the lending agencies to exert pressure on the government to intensify efforts to implement an economic recovery plan."'
The AES power plants supply 50% of the electric demand, while Art. 11 of Electricity Law 125-01 caps a limit on national demand that companies participating as distributors could generate and sell in the market at 15%, as reported in Diario Libre today. The AES Corporation operates 876 megawatts of production in the DR, which is about half of the national demand. AES is the owner of the Andres natural gas plant that produces 300 MW, and Los Minas V and VI, which were converted to use natural gas, with a joint production capacity of 260 MW. The Itabo plants are also under AES management and provide an additional 256 MW. Daily demand is estimated at 1,700 megawatts. The report also observes that AES has a lower production cost due to the fact that its plants are powered by natural gas. Nevertheless, the newspaper says that the company's generation division sells to the company's distribution affiliate at a higher price than that which is established by the market for this type of generation. It indicates that the Superintendence of Electricity never impeded this type of verticality within the system nor has the present government shown any indication of correcting this flouting of the law.
The Superintendence of Power reported yesterday that power service is stable in the DR thanks to the re-entry of the Cogentrix plant and its 285 megawatts of production. The plant went online when AES announced they would be taking their 240-megawatt AES Andres plant offline due to lack of funds for the purchase of fuel. Maximum availability yesterday was 1,200 megawatts, and maximum demand is estimated at around 1,700 megawatts during peak hours. Blackouts have diminished considerably and there are sectors of Santo Domingo that have electricity now on a permanent basis.
Ecologists requested that Tourism Minister Felix (Felucho) Jimenez explain the projects that he would like the government to develop in the Bahia de las Aguilas area. Mario Bonetti of the Academy of Sciences, ecologist Ivonne Arias, and Luis Carvajal of the environmental commission of the the state university (UASD) said that the handling of the Bahia de las Aguilas area, which is located in the Jaragua National Park corresponds to the Ministry of Environment, not to the Ministry of Tourism.
The three members of the Coalition for the Protection of Protected Areas expressed their concern for the type of hotel development the Ministry of Tourism is currently endorsing for the Bahia de las Aguials area.
Meanwhile, Minister Jimenez was interviewed in Washington, DC, where he said he would have a special team from the Ministry of Environment on hand to develop the area without compromising its fauna and flora.
The official traveled to the US to participate in a forum on politics and tourism. Before leaving, he told El Caribe that he would meet with the InterAmerican Development Bank to secure economic support for the development of a touristic project that encompasses Bahia de las Aguilas, Pedernales and the Haitian town of Anse-a-Pitre, although the lattermost area would be responsibility of Haiti's tourism officials.
Jimenez has said that seven hotel chains are interested in Bahia de las Aguilas. He said financing for the project would come from the IDB and the European Investment Bank and that it would have the technical support of the World Tourism Organization.
Bonetti of the Academy of Sciences said that the way in which local hotels have been developed to date has not helped the nation overcome poverty. He highlighted the fact that the Academy of Sciences has prepared a project for the touristic exploitation of Bahia de las Aguilas that protects the ecosystem but allows its development from the nearby area of Cabo Rojo in Pedernales.
As reported in El Caribe, Ivonne Arias of the Grupo Jaragua said that the Ministry of Tourism is not a competent entity to promote hotel development in the Bahia de las Aguilas area without the approval of the Environment Ministry. "Bahia de las Aguilas cannot withstand any kind of direct construction because of its fragility," she said.
Meanwhile, Tourism Minister Felix Jimenez ensured that "Bahia de las Aguilas is a privileged zone for ecotourism. He said it is fundamental that the economic plans designed to overcome poverty be taken into account.
El Caribe reports that in his first term as tourism minister from 1996-2000, Jimenez promoted the touristic development of Bahia de las Aguilas to potential French investors. The plans at that time included the construction of hotels in Cabo Rojo, cabanas, a golf course and an airport, as well as a coconut plantation some 300 meters from the beach. The project did not get off the ground.
US Trade Representative Robert Zoellick would reportedly recommend to the US Congress that the DR be excluded from the free trade agreement if it does not eliminate the surcharge on corn syrup imports that was included in the recently implemented tax reform package, as per a story reported in several local newspapers. The DR-CAFTA agreement has yet to be debated in the US Congress.
The letter written by Zoellick to President Leonel Fernandez reportedly indicates that the tax is not consistent with the obligations signed by the Dominican Republic under the terms of the free trade agreement. The Dominican government signed an FTA that was docked to the Central American Free Trade Agreement on 5 August 2004.
According to reports, in the letter dated 1 October, Zoellick stated he would not recommend the DR's inclusion in the legislation if the corn syrup tax is upheld. Furthermore, the letter also contains a description of changes to local laws that he considers necessary to comply with the FTA.
The United States Embassy in the DR sent a copy of the letter to the president of the Industry and Commerce Commission, Alejandro Santos, who heads a special commission that is studying the elimination of the surcharge. Santos feels it is important to preserve the FTA and he urged the nation's various sectors to defend it. "For the moment our position is to harmonize the interests between the sugar industry and the free zone sector," he told Diario Libre.
Santos said he is striving to reach a compromise on behalf of the US and find a solution so that the sugar industry is not affected by the FTA.
The 2004-2005 Global Competitiveness Report of the World Economic Forum shows the DR has suffered a setback in its competitiveness ranking. The DR is ranked 72nd among the 104 nations listed in the Growth Competitiveness Index, down from 62nd place in 2003. In Latin America, only Argentina (74), Guatemala (80), Venezuela (85), Ecuador (90), Nicaragua (95), Honduras (97), Bolivia (98) and Paraguay (100) rank beneath the DR in terms of competitiveness. Chile (22) is by far regarded as the most competitive Latin American country, followed by Mexico (48), Costa Rica (50), Trinidad and Tobago (51), El Salvador (53), Uruguay (54), Brazil (57) and Colombia (64). The growth competitiveness index is composed of three component indexes: the technology index, the public institutions index and the macroeconomic environment index.
See http://www.weforum.org/site/homepublic.nsf/Content/...
Listin Diario reports that Plaza Lama has reached an agreement with Customs on unpaid pending taxes. Customs Director Miguel Cocco accused the company of having evading RD$250 million in taxes on imported merchandise. On Friday, Cocco told the press that if the company did not pay RD$252 million by Monday, their operations would be closed down. Customs was demanding double the taxes that the company would have paid if it had imported the goods in a legal manner.
Plaza Lama is represented by Abel Rodriguez del Orbe, who has held the post of attorney general in the previous Fernandez administration.
The customs department, through its own lawyer Jose Antonio Columna, issued a statement on 15 October that referred to irrefutable proof that Plaza Lama had engaged in a massive customs fraud by bringing in hundreds of appliances accompanied by phony documents or in ways legally considered as contraband or counterfeit.
The Lama case brought about an interesting confrontation between District Attorney Jose Manuel Hernandez and the Customs Director, when Hernandez accused Cocco of violating the legal procedures code by taking steps to intervene in the store's operations.
Despite the economic crisis, the Central Electoral Board (JCE), the body that oversees political elections in the DR and the civil registry, has requested a RD$2.46-billion allotment in the 2005 budget. Listin Diario reports that this is RD$575 million more than what was spent to organize the Presidential election in May 2004. Of the total amount requested, RD$2.17 billion would purportedly go to expenses and RD$290 million, or about 11%, to equipment. The JCE has designated RD$487 million to the organization of the political parties' primaries, a new responsibility it has taken on as per a law that was passed this year. Another RD$263 million is allotted to pre-electoral expenditures and a further RD$47 million to continue the drive to facilitate voting from abroad. An estimated 67% of the entire budget, or RD$1.66 billion, has been earmarked for operational expenditures, of which 40% goes to pay wages. Another RD$197.8 million is allotted to the automation of the civil and electoral registries.
The Listin Diario's political commentator Orlando Gil writes today that, while the law obliges the JCE to organize the political parties' primaries this year, it will "not help their institutionalism in any way, and will only serve to change the scenario of their internal fights." He continues: "If they do not respect the decisions of their party members now, what will ensure their acceptance of the verdict of the electoral college?" Gil says experience has shown that they will not.
"We must start getting the idea across that this country cannot only work for politics and the parties. Among those seen as enemies to the stability and progress of this nation, we must include this plague of reformers who are always with their projects under their arm looking for unwary people. No country can move ahead in the hands of those fools, and that is what the advocates of changes like this are," he writes, stressing that this change provides no solution.
Gil criticizes the fact that while the nation had to foot the bill to finance the political parties, now it has to fund the primaries as well, and thus converting politics into a great business comprised of absolute gains and zero investment. The commentator says that it would be in the best interest of the country if the political reformers took a recess because their initiatives are less and less practical every day.
The National Police (NP) has identified 10 brigadier generals and 31 military officers who were assigned vehicles that had been stolen and recovered by the police but not returned to their legal owners, as reported in the Listin Diario. The investigation of the case has now put forward the names of Generals Alejandro Deno Brioso, Ramon Francisco Rodriguez Sanchez, Alberto Bienvenido, Guarionex Aguero Encarnacion, Rafael Rodriguez Florimon, Miguel Duran Delgado, Radhames Terrero Castillo, Cesar German, Francisco Pichardo and Rafael Almonte Morrobel, according to the report. These names are in addition to the former NP chief Jaime Marte Martinez, Brigadier Generals Yuri Ruiz Villalona, Osvaldo Hernandez de la Cruz, Pedro Hernandez Reynoso and Ernesto Ovalles Conception, and Colonels Fausto Tiburcio Batista and Felipe Manuel Terrero Garcia, names that are found in the first dossier on the case that was submitted to the District Attorney's office.
A list that identified 10 more generals, 11 colonels, 7 lieutenant colonels, 4 majors, 6 captains, 2 first lieutenants, 1 second lieutenant, 3 sergeants and 1 civilian was released to Nuria Piera, the Color Vision investigative TV journalist.
The other officers who benefited are listed as Ramoncito Giron Alcantara, Edwardo Sarraf Herrera, Jose Mercado Herrera, Juan Guzman Toribio, Angel Sanchez Martinez, Ricardo Campos Batista, Osvaldo Morillo Rodriguez, Marcos Roa Castillo, Juan Brown Perez, Juan Antonio Mejia Ruiz and Ramon Vilorio Calderon; Lieutenant Colonels Rafael Herrera Pena, Eris Rosario Margarin, Jose Martin Burgos, Jose Antonio Ceballos, Felix Medrano, Saturnino Lora Urena and Jose Guzman Beato; Majors Dennys Amauris Diaz, Wilton de Jesus Cepeda, Lirio Rojas Acosta; Captains Reyes Reyes, Jose de Oleo, Oscar Tejeda Baez, Luis Felix Castillo, Oscar Tejeda and Cuevas Castillo; First Lieutenants Luis Marte Martinez and Jackson Maldonado Zabala; Second Lieutenant Eduard Tiburcio Belliard; Sergeants Luis Alberto Javier, Perez Reynoso and Alfredo Santana; and civilian Rafael Terrero.
Last night, General Ramon Francisco Rodriguez told Listin Diario that the vehicle that appears as having been assigned to him was actually being used by the NP's public relations department.
District Attorney Jose Manuel Hernandez told the newspaper that NP officers have returned five other vehicles that were used illicitly after having been seized as criminal evidence.
Most of the vehicles, however, are cited in the claims from the national insurance companies that had already paid damages for their losses to their rightful owners and were aware that the vehicles were in the hands of the police.
The District Attorney's office has received extensive documentation on the illegal distribution of the stolen vehicles to officers, as well as who authorized their allocation, details that were registered in a notebook that is reportedly now in the hands of the state prosecutors.
Dominican slugger David Ortiz has done it again, keeping the Boston Red Sox full of hope in baseball's American League playoffs. The Sox came back from a 3-0 start in the best-of-seven series to win the next two games. Ortiz's hit in the 14th inning of yesterday's game against the New York Yankees turned him into what everyone was calling the NY Yankees "daddy" or "savior". Boston Globe highlights that the hit ended the game with a 5-4 Boston victory. The day before, Ortiz himself had cracked a home run to win game 4 at 1:22 yesterday morning. The Boston Globe reports that "no baseball team has survived a 3-0 series deficit." The Boston Red Sox sends ace pitcher Curt Schilling to the box.
See http://www.boston.com/sports/baseball/redsox/articles/...
and http://www.boston.com/news/local/articles/...
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