| Daily News - Tuesday, 16 November 2004 |
Technical Secretary of the Presidency Temistocles Montas announced yesterday that the government does not plan to propose new taxes until after the May 2006 election. He said the government would cut its own spending to reduce the fiscal deficit. Furthermore, he said that the government would not execute loans that have been contracted for RD$2 billion. He explained that the government has reached the limit of its debt-taking capacity. He said that the government will still have to honor the guarantees on the loans, regardless of whether these are disbursed or not and will pay the commissions that are due. As of May 2004, the country had contracted US$10.28 billion in loans. "Many times it is preferable to pay the commissions, and not execute the loans because the economy cannot bear more debt," said Montas.
"We have come across a situation that discloses the chaos in which the past government handled its public finances. Everyone was borrowing money here," he said as reported in El Caribe.
Technical Secretary of the Presidency Temistocles Montas announced yesterday during the Gobierno de la Manana radio broadcast from the Presidential Palace that the government needs to reduce the power sector's US$650-million fiscal gap to a maximum of US$250 million in order to resume the stand by agreement with the IMF. The government has announced it will secure the necessary funds by issuing a 30% increase to those paying customers who consume more than 200kWh a month. He said the sector's deficit is in addition to the US$504-million debt contracted by the Mejia administration when it bought back the bankrupt power distribution companies from the Spanish company Union Fenosa in September 2003.
Ruben Montas, the president of the National Power Commission said that the government has made plans to cut this number to US$300 million in 2005 by way of a collaborative strategy with the World Bank and the Agency for International Development of the US. Montas said the government expects to renegotiate the power purchase contracts with the generation companies so that lower cost power may be provided to the power distributors. The plan also envisions the power distribution companies increasing their collection levels, which are currently at all-time lows.
Meanwhile, during the same broadcast, Superintendent of Power Francisco Mendez said that the poor who reside in low-income barrios, where only rarely are there any businesses or individuals who pay for service received, should not complain, but rather be grateful that they are getting hours of free service.
The 30% increase is not unusual news. All throughout 2004, the power distribution companies have been increasing the tariffs charged for the service, placing the burden to meet the deficit caused by the sectors that traditionally have not paid – the government and the poor — on the productive sectors.
The Ministry of Agriculture and the Japan International Cooperation Agency (JICA) signed an agreement to stimulate Dominican commercial organic farming. The agreement calls for an investment of RD$180 million in five years, as reported in Hoy newspaper. Agriculture Minister Amilcar Romero and JICA director in the DR, Shozo Fukuda signed. The project seeks to make organic farming more efficient in the province of La Vega with the use of advanced technologies that are compatible with the protection of the environment and biodiversity. Romero said that Dominican organic exports generated US$25 million last year. Some 43,000 hectares are planted with organic produce. Romero said that the export of organic products is one of the most promising and feasible market niches for small producers in the DR.
Not willing to give in to major difficulties in resolving the garbage collection service in the city of Santo Domingo, the capital city's mayor wants a second chance. To this end, he is importing 30 garbage compacting trucks from Miami that are expected to arrive at the end of the month. The city government says that US technicians will be on hand to train local personnel to use the trucks.
AES Corporation has announced the sale of 50% of its shares in the AES EdeEste power distribution company to an entity called Dominican Energy Holdings, LP. AES says that the main shareholder of this company is TCW Energy Advisors, LLC, which is based in California. As reported in Diario Libre, under the terms of the sale TCW then contracted AES to handle EdeEste's daily operations.
Julian Nebreda, the president of AES Dominicana, said that despite having sold their shares in AES EdeEste, they would continue operating the company and the power generation business. AES is the owner of AES Los Mina, with its capacity to generate 210 megawatts, and AES Andres, which operates with natural gas and has the capacity to produce 304 megawatts. AES also maintains its participation in its subsidiary AES Gener, with a participation of 25% in Itabo that produces 433 megawatts, as per a company press release.
The AES position as owner of distribution and power generation companies had been criticized as being in violation of the General Electricity Law.
James J Heckman, who was honored with the 2000 Nobel Laureate in Economics for his development of theory and methods for analyzing selective samples, is currently in the Dominican Republic to attend the 20th General Assembly of the Inter-American Conference on Social Security. Speaking during the event that is taking place in Casa de Campo, La Romana, he warned that corruption is the enemy of social security systems and recommended that business sectors and governments make an earnest effort to combat its spread.
Speaking to representatives from 38 countries who gathered to discuss the main problems affecting social security regimes in Latin America, Heckman urged that the governments encourage the generation of wealth, seek investment in education and guarantee benefits for workers. He spoke of the common aspects of successful labor reforms. As a professor at the University of Chicago, he said that Latin America must implement drastic reforms to reduce inequity and exclusion. He insisted on the need for creating confidence and climates that welcome investment and the creation of wealth. In speaking of the need for governments to collect taxes, he observed that people refuse to pay when they do not see anything in return for their taxes.
Heckman, as reported in the Listin Diario, suggested that, before it deals with social security programs, the DR must promote economic development, investment and the creation of enterprise to generate wealth. He said that the taxes to support social security programs need to come from the productivity of the private sector.
It has been abnormally cold for this time of the year in the Dominican Republic, with the lowest temperatures mostly being felt in the Central mountain range, with unusual lows reported for Alto Bandera, which lies at 2,669 meters above sea level near the city of Constanza. Diario Libre reports this area saw temperatures drop on Saturday to –4 C (24.8F). The newspaper says that the military at the Alto Bandera post are spending most of their time inside their cabanas due to the intense cold.
Temperatures in coastal cities have also descended to daytime lows of 25C (77F), which is unusual for this time of the year.
Dominican David Ortiz of the Boston Red Sox is leading in the Major League Baseball online poll on who should win the American League's most valuable player. David Ortiz's stats are: .301, 41 HR, 139 RBIs. And of his 175 hits, 91 have been for extra bases. In an online commentary, MLB site indicates that "Ortiz has turned his act with Ramirez into the best 3-4 combo in the Majors, and one of the best of all time."
Fellow Dominican Vladimir Guerrero of the Anaheim Angels is the runner up for the prestigious award. His 2004 stats: .337, 39 HR, 126 RBIs, 124 runs. Furthermore, the MLB site indicates that he was successful on 15 of 18 steal attempts and ridiculed offseason concerns about his durability by playing in 156 games and having 612 at-bats. He is the reason why, despite the angels having been down to three starters, the team was in the first place.
Interestingly, the third leading candidate for the Most Valuable Player of the American League is yet another Dominican, David Ortiz's teammate, Manny Ramirez, of the Boston Red Sox. His 2004 stats: .308, 43 HR and 130 RBIs, with 44 doubles and 108 runs. He hit .300-plus for the ninth time in 10 seasons. The exception was in 1998, when he hit "only" .294 but compensated with his career-high 45 homers, according to the MLB.com site. As for Ramirez, he is a candidate because "as a top-10 MVP finisher six straight seasons but never really a serious threat, Ramirez deserves to break through this year."
Other contenders for the award are Gary Sheffield(Yankees) and Michael Young (Rangers).
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