Presidents Hugo Chavez and Leonel Fernandez signed the reinstatement of the suspended Accord of Caracas at the Presidential Palace on Saturday. In the 6 November agreement, Venezuela commits itself to supply 50,000 barrels of oil or equivalent forms of fuel per day to the Dominican Republic. In a joint press conference held after the signing of the agreement, complements the San Jose Oil Pact that already establishes credits based on 20% of oil sales, the statesmen announced that with world market prices at more than US$30 the barrel, 25% of the bill will be financed at 2% annual interest for 15-year periods, with a grace period of one year to pay the capital. Furthermore, the DR may pay the credits in goods and services. The one-year agreement is automatically renewable.
In addition, the Venezuelan government also committed to collaborate in the exploration for oil in the DR and train Dominican technicians.
President Leonel Fernandez described the agreement as "an expression of generosity and solidarity not very common in today's world, in which market conditions prevail."
The DR presently sources fuel from Venezuela at US$40, at a time world market prices are at around US$55 the barrel. The Listin Diario newspaper points out that at the present price level, the agreement could represent savings of US$200 million on the trade balance.
The DR consumes 140,000 barrels of oil a day, of which 110,000 are imported from Venezuela. These imports were suspended in September 2003 after a clash between former President Hipolito Mejia and President Chavez. The Venezuelan leader complained that former Venezuelan President Carlos Andres Perez was conspiring against him from Dominican territory.
Following the signing of the agreement, Chavez and Fernandez inaugurated the Plaza Simon Bolivar at Maximo Gomez and Bolivar avenues. As a donation from the government of Venezuela, the plaza was completed in 2002, but was not inaugurated given the conflict between then-President Mejia and President Chavez.
Speaking during the Presidential Palace press conference on occasion of the signing of the DR-Venezuela oil agreement, President Leonel Fernandez offered to mediate so that Venezuela could improve its relations with the United States. "If we can be useful, President Chavez, we are always willing to serve as mediator between Venezuela and the government of the United States so that there may be the best relations possible between those two countries, as well as with the rest of Latin American countries," said President Fernandez during the press conference.
President Fernandez also used the occasion to, in the name of the Dominican people and his government, congratulate US President Bush on his reelection. As reported in Hoy newspaper, he said that while he is aware that the fight against terrorism will continue to be the top priority of the Bush administration, he urged that Latin America also be given priority. "Latin America should play a higher up role, guided towards the strengthe3ning of democracy and facilitating resources to consolidate our economies, creating prosperity and social order," he said.
President Leonel Fernandez announced the country would be borrowing US$160 million from Brazil to build the northwestern aqueduct that has been on the government agenda for the past decade. Most of the money would fund the pipeline system for the aqueduct. The aqueduct construction will take three years from the scheduled start date in mid-2005. The water for the aqueduct will be channeled from the Moncion Dam and distributed over an area of 2,500 kilometers.
The DR will also borrow an additional US$131 million from Brazil to build the Pinalitos Hydroelectric Dam in the area of Constanza. The dam should be completed in 42 months. Construction was begun in September.
Eighty percent of the funding for both projects would come from the Brazilian Development Bank (BNDES), which supports the export of goods and services from Brazil. The entity is a federal public company associated to the Ministry of Development, Industry and Foreign Trade and the Brazilian contractor company, Constructora Norberto Odebrecht, a Brazilian leader in construction and engineering. CNO will undertake both the dam and aqueduct projects.
An additional US$80 million will reportedly be borrowed to build an aqueduct in Nagua in the country's Northeast, according to Ernesto Baiardi of Odebrecht, which company will also be involved.
President Fernandez made these announcements during his trip to Brazil last week.
President Leonel Fernandez brought the Haitian political, economic and social crisis to the Group of Rio Summit, where he was backed by the event's host President Luiz Inacio "Lula" da Silva. In the final declaration of the 18th Summit of the Group of Rio, the need for increased international community support to the difficult situation that has developed in Haiti was pressed. Brazil has sent a force of 1,200 soldiers to participate in the 4,000-strong United Nations peace-keeping force in Haiti.
In Rio de Janeiro, the heads of state and diplomats agreed to take an integrated approach to the crisis by launching an offensive that would force a broad dialogue between all the political forces at work and commit then to the cause of reconstruction in Haiti.
Roberto Rodriguez Marchena, the spokesperson for the Fernandez administration, announced on Friday that the government would strive to reduce the information forthcoming from government in order not to cause undue concern to Dominican families. Rodriguez Marchena said that a study showed that Dominicans are fed up with the presence of government officers in their homes, and even the president, speaking of scandals and problems in the media. The remedy to the situation, he said, was their plan to release such information in doses. The statement caused alarm in the local press.
Vice-president of the Interamerican Press Association, Rafael Molina Morilla was quick to describe the plan as a "monstrosity."
The "Que se dice" column of Hoy newspaper commented on Saturday that this statement was an attempt to justify manipulation of the information the government offers those it governs and asked, "Where are we headed?"
The Fernandez government has already restricted the press from covering the departures and arrivals of the President and other restrictions.
Over the weekend, Rodriguez offered an explanation, saying with the statement that while the government would manage the flow of information and wants to be the media's ally. He affirmed that the idea is for government officers to avoid sending out contradictory signs to the economic players, given the fragility of an economic situation that could be affected by an unnecessary statement. He denied there was any official study showing people did not want bad news and explained that these views were formed from feedback he had received from citizens exasperated by the statements of officials of the previous government. The speaker said that the Dominican press is free to access and publish all new it considers to be of interest.
The Central Bank reports that, for the first time in the past 22 months, there is no need to print money without sufficient reserves. According to El Caribe newspaper, the printing machine of the so-called "inorganicos" has been shut down. On 1 November, the number of certificates of deposits represented RD$2.72 billion more than the Central Bank's excess funding. The tendency to print money has been a leading source of inflation and is blamed for the peso's depreciation during 2003 and 2004. The money was printed to make payments to depositors following the collapse of three commercial banks and as a result of government overspending.
According to the Central Bank, internal financing made up by advances and bank discounts, as well as liquidity facilities granted to the financial system, stood at RD$105.8 billion as of 30 October, representing RD$6.85 billion less than in September 2004. Reporter Edwin Ruiz explains that the difference between internal financing and money in circulation becomes the amount of pesos seeking dollars. This, he explains, has considerably declined from the RD$48.4 billion spread in January 2004. At that time the peso depreciated to a record rate of RD$55 to US$1. With the gap closed, however, the peso has rebounded to RD$30 to US$1.
The implementation of Tax Reform Law 288-04, which upped the ITBIS sales tax from 12% to 16% and imposed increased luxury taxes (Impuesto Selectivo al Consumo), left its mark on the inflation rate in October. The Central Bank reported that inflation rose 1.35% for the month, with accumulated inflation for the first 10 months of the year hovering at 32.88%. The tax reform is being attributed with 4.15% of the inflation experienced, but given the decline in the exchange rate, this impact was conceivably a lesser rate of 2.8%.
The Central Bank predicts a record-high year-end inflation of 36%. Such elevated inflation was last felt in the DR in 1990 when it peaked at 50%.
Business leader Celso Marranzini told Hoy newspaper that he is opposed to mandatory wage increases for businesses. He said that the National Salaries Commission (CNS) should stick to legislating the minimum wage, not wages in general. As reported, he said that it is now up to the Ministry of Labor to judge the merits of the resolution issued by the CNS that prescribed the pay hikes for workers making up to RD$20,000. A former president of the National Council of Business (CONEP), Marranzini said that in a free-market economy, businesses should not be obliged to elevate wages above the mandated minimum level. Wage increases over the minimum wage should be left to market forces. He said that making the wage increase mandatory goes against sensible personnel practices, as both the good and the bad employees are rewarded equally.
The Ministry of Industry & Commerce announced a decline of RD$4.40 in the price of premium and regular gasoline and RD$7.10 for a gallon of diesel. Resolution 111 establishes that a gallon of premium gasoline would cost RD$99.40 as of Saturday, 6 November, and regular gasoline RD$90.10 and diesel RD$69.60. Prices will remain in effect until Friday, 12 November. Propane (LPG) currently costs RD$26.17 per gallon, with 100-lb tank selling for RD$562.50.
The Dominican Republic's currency dipped below the 8 September rate of RD$30.64 and a US dollar was being bought for less than RD$30 for the first time over the weekend. According to Freddy Ortiz, the president of the Association of Remittance Companies, the flow of foreign currency has surpassed the economy's capacity to purchase dollars given the economic recession and scarcity of pesos in circulation.
Ortiz expects the peso to continue to appreciate in relation to the US dollar. Ortiz said that the announced arrangement that will allow Venezuelan oil purchases to be financed, in addition to the fact that merchandise for the Christmas sales have already entered the country, will prompt a lesser demand for dollars.
Arturo Peguero, president of the Association of Free Zones, said that the lower exchange rate could create unemployment, but that he expects this to be a temporary situation only. He said that for free zones to compete they need a rate of RD$35-RD$40 to the US dollar. When the exchange drops below 35, only certain companies are competitive. The rate had climbed to RD$55 earlier this year, but collapsed upon the government handover in August.
El Caribe says that among the factors that have contributed to the peso's upward climb is the return of capitals from abroad and increased confidence in the local economy, which has enabled the Central Bank to increase its international reserves that as of 1 November represented US$460 million.
The Central Bankl has maintained a policy of monetary restriction, and has issued a decline of 60% to 31% in its interest rates.
Italy's minister of environment, Altero Metteoli, visited the Dominican Republic last week to offer his nation's assistance in local environmental matters. During his stay, he met with the Dominican ministers of culture, tourism and environment.
Thirteen-year-od Javier Rodriguez Liriano was rescued in a joint effort by Dominican authorities and the United Nations military forces in Haiti after being kidnapped in a case of mistaken identity. The military delivered the boy to the Dominican consulate in Ouanaminthe, where Dominican Consul Andres Bocio Fortuna and Dajabon's Governor Sonia Mateo received him. Following the abduction last week, the border at Dajabon and its market was closed. News reports indicate that the UN military conducted a door-to-door search in the town of Ouanaminthe, Haiti in their efforts to locate the boy, who says he was taken at gunpoint on Tuesday, after which he was constantly moved from one place to another in a SUV. He said he was fed rice and water during the six days of his captivity. His kidnappers were seeking RD$600,000 in ransom plus the liberation of Haitians from the Dominican jail in Mao. The boy was kidnapped over a missing 1 kilo of cocaine that they had reportedly delivered to a motoconcho driver in Dajabon identified as Tony Rodriguez, who was detained by authorities and later released. As reported in the Listin Diario, the child was first rescued from the drug traffickers by Haitian rebels loyal to former President Aristide and the Haitian police, who wanted to exchange him for Haitians detained in Mao. Once the boy was about to be returned to the DR, a Haitian judge requested that the child be returned to Haiti, which led Consul Bocio Fortuna, General Pedro Antonio Caceres, Dajabon's National Investigation Department chief Carlos Boique and other Dominican military members to cross the border, despite the Haitian resistance, in order to bring the child home.
Dajabon Governor Sonia Mateo accused the Haitian police of Haiti of colluding with criminals in that country and asked that Dominicans living on the border be especially careful in their day-to-day activity. She said that in Haiti there are no reliable authorities with which to discuss any matter.
The father of the child, Americo Rodriguez, thanked the group for their efforts and said that all he has is the grace of God as it would have been impossible to raise the money the kidnappers were asking for.
El Caribe reports that from 1-5 November in the Province of Santo Domingo and the National District 46 vehicles were stolen. This is a record before the 279 reported stolen in the first eight months of the year. The figures include cars, 4-wheel SUVs and pick-up trucks. In the week of 23-29 October alone, 23 cars were stolen. According to CADOAR, the Dominican Chamber of Insurance Companies, of the 279 vehicles stolen only 36 were recovered, or 13%. In 2003, CADOAR recorded the theft of 503 vehicles.
Hoy newspaper mentions that police sources indicate that as of 20 October of this year, there had been 3,852 vehicles stolen. Police say that from 1999 to 2004, some 22,627 vehicles were stolen of which 13,197 were recovered and 9,430 are still missing. The police say they have recovered 60%.
Fundacion del Real Madrid, one of the most famous football teams in Europe, signed a cooperation agreement with the Ministry of Sports. Minister of Sports Felipe (Jay) Payano signed for the DR and Miguel Angel Arroyo Gomez, director of the Real Madrid, for the foundation. Spanish Ambassador Maria de Jesus Figa Lopez and former soccer star Emilio Butragueno were present for the signing.
As per the agreement, the foundation will provide technical assistance to the ministry to prepare Dominicans in soccer and basketball. A sports school under the modality of Escuela Deportiva de Integracion Social that works in other Latin American countries would be built to serve as a model for others in the future. The location of the school has yet to be determined.
Arroyo said the primary objective is to train Dominican football players.
Negocios son negocios, the film that tells the tale of mistaken identity and a major banking fraud, is the latest Dominican production to hit movie theaters. The comedy, set for a 18 November general opening and a 11 November premier, stars Cuquin Victoria, Luis Jose German, Karina Larraury, Irvin Alberti and Nurin Sanlley. To make the film, the producers used the locales of Imposdom as the commercial bank, as reported in Hoy newspaper. The film depicts the modern city of Santo Domingo and shows the Abraham Lincoln, Winston Churchill and Duarte avenues, as well as El Conde, Colonial City, Honduras neighborhood in Santo Domingo. Scenes are also shot at the Altos de Chavon amphitheater and at Bayahibe beach in the East.
Also appearing in movies theaters this 14 November is Pasaje de ida, the drama of illegal boat crossings and stowaways on the Monal Passage that has won 14 international awards, including the Huelva Iberoamericano Film Festival award.
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