| Daily News - Thursday, 18 November 2004 |
President Leonel Fernandez ordered a halt to the return of heavy equipment that had been decreed by the Ministry of the Interior and the Police. The Presidential Press Office said that representatives of the Executive Branch would await the results of a dialogue being held between a governmental commission and the mayors of the various municipalities involved. These municipalities were given the use of heavy equipment by the former PRD administration shortly before the change of government. Presidential Minister Danilo Medina and PLD Secretary General Reinaldo Pared Perez are being assisted by Monsignor Agripino Nunez Collado, who agreed to mediate this conflict. The issue began when Interior and Police Minister Franklin Almeyda ordered the transfer of heavy equipment and other machinery from the mainly PRD-run municipal governments back to the PLD authorities.
Women's Affairs Minister Gladys Gutierrez told reporters that her office will strive to fight child prostitution, especially in those areas dedicated to serving tourism. The minister said that child prostitution was a most serious problem that must be met head-on using every possible means. Gutierrez met with the personnel of the Corripio Communications Group during one of their weekly lunches. Accompanied by several of her officials, Gutierrez pointed out that poverty and parentless children are merely part of the price the country is forced to pay as a result of this illegal activity. The minister also included family violence as part of the set of problems, since children who are left without parents become easy targets for sex trade recruiters. The minister pointed out that Boca Chica, a prime tourist area in the province of Santo Domingo, has exhibited the highest incidence of child prostitution. She feels the eradication of this activity will strengthen the future of the tourist industry and lead it well into the future. Joint programs with the ministries of Education and Public Health will be the focus of the prevention and eradication program.
As reported in El Caribe today, AES Dominicana says that it notified the authorities on the sale of the AES Ede-Este distribution company to Dominican Energy Holdings. A letter dated 3 September was sent to Superintendent of Power Francisco Mendez and another dated 10 September was sent to the administrator of the CDEEE, Radhames Segura, in which the president of AES Dominicana, Julian Nebreda, indicated that the company contemplated transferring the totality of its shares in AES Distribution East LLC and AES Distribution East LTD to the possession of Dominican Energy Holdings. The letter explained that the leading shareholder of the company is TCW Energy Advisor LLC, a subsidiary of TCW Asset Management Company.
On the other hand, Segura says that while he received the notification of the company's interest in transacting the sale, the company failed to offer them first to its partner, the CDEEE, as the contract signed with AES requires. The CDEE administrator told El Caribe that they are currently studying the sales transaction from a legal standpoint.
While AES Ede-Este sold their shares in the distribution operation, it will continue to manage company for another 10 years, as per the contract signed with TCW.
Meanwhile, Diario Libre reveals today that TCW Energy is not the only US company that holds Dominican sovereign bonds and has bought into Dominican power industry. The newspaper says that Goldman Sachs purchased shares of the Cogentrix power generation company at the end of 2003. The Cogentrix contract, signed during the first Fernandez administration, has been disputed for several years on grounds that it includes clauses that are very detrimental to Dominican consumers.
The Dominican government is projecting an income of RD$180 billion during fiscal 2005, but the budgets submitted by its various departments still manage to surpass such a lofty figure. This was what Presidential Minister for Technical Affairs Temistocles Montas told the press yesterday. He said that a high-level commission departed for Washington yesterday, where they will hold talks with the IMF to see if the next few days can produce a letter of intent to resume the stand by agreement. He also added that another group of technical staff members would work to refine some of the wording, and that by next week there should be some news on a new IMF Accord for the Dominican Republic. Once this has been accomplished, the Executive Branch will be able to forward the 2005 Budget to the Congress for approval. Montas also remarked on the effectiveness of the tax reform legislation that is projected to reduce the deficit from RD$50 billion to what he called a much more manageable figure.
The IMF does not like the way the DR handles tax exemptions for imports, particularly on industrial machinery. According to the Listin Diario, the IMF feels that these exemptions should not exist when there is a fiscal deficit in public finances. This latest observation came as the Dominican government was negotiating with the IMF and the Customs Office announced a 50% reduction on import duties for capital goods entering the country. The IMF wishes to eliminate all exemptions except those given to the diplomatic corps. Sources close to the scene told the Listin Diario that, while there was some pressure being exerted to repeal the latest tax reform, nothing would be done until after the municipal and congressional elections of 2006.
Both houses of Congress have approved the legislation that will allow an association of funds, which in turn will allow the Executive Branch to transfer RD$3.86 billion from the tax reform income. This strategy only came about, according to El Caribe, after the Budget Office approved an additional RD$45 million for Congress. The legislation specifies that the funds are surpluses that were generated by the application of the tax reform package that was put into effect in September.
In other news from Congress, the president of the Chamber of Deputies, Alfredo Pacheco, told reporters that local IMF representative Ousmene Mandeng held a private meeting with him and Senate leader Andres Bautista. The central issues included a request for a major modification to the newly-imposed fiscal reform legislation. Both congressional leaders told Mandeng, however, that this would not be possible. Instead, the legislative bosses said they had arrived at an agreement that would allow Congress to use just 55% of the money that by law is part of their budget. The law states that Congress is entitled to 7% of the National Budget, but in light of the need to reduce spending and continue the talks with the IMF, the legislators agreed to 55% of what they would normally obtain.
Leaders of the retail and wholesale business community promised the Industry and Commerce minister that prices would drop by as much as 20% in the short term. Minister Francisco Javier Garcia and the head of the Office of Price Controls, Francisco Mancebo, headed the meeting that resulted in the pledge to move prices down by 15%-20% within the next two weeks. Fermin Tromcoso, the head of the Federation of Retailers of Provisions (basic foodstuffs), and Johnny Leyba, the head of the retailers association, spoke out in favor of lower prices. Ivan Garcia, the head of the Dominican Federation of Merchants, said that the process of lowering prices would continue, as it has stimulated commerce and strengthened the buying power of the peso.
Op-ed contributor Marisol Vicens writes in El Caribe that the first 100 days of President Leonel Fernandez' second term indicate a positive balance sheet with regards to the restoration of confidence at both the national and international levels. Nevertheless, and despite the fact that the issue of electricity is one of the most pressing, the country has not been able to show any steps that have been made towards solving these problems. The IMF, according to Vicens, is well versed on the necessity of fixing electrical situation in order to reduce that sector's estimated deficit of US$650 million, and now appears to be conquering the inertia displayed by the electric sector administrators. The IMF is demanding that they execute some of the measures that were discussed with the former Mejia administration, particularly the elimination of subsidized electricity for consumers of more than 200 KWH per month. The lawyer and former head of the ANJE business association says that before this measure is put into place, however, it is imperative that the contracts of the electric generators be renegotiated. Also needed is more transparency within the sector and a greater confidence in the electric billing system, as is required by Resolution 74-04 from the Superintendent of Electricity's office.
Unfortunately, the prevarication in the process of renegotiating the contracts only deepens the crisis and makes solutions more difficult to reach. Vicens reviews the government's activity, or lack thereof, in the recent sale of shares by AES and finds several questions that need to be answered. In the end, Vicens says that the one grade pending on the report card for the first 100 days is that regarding the electricity crisis. She expresses the hope that the pressure being exerted by the IMF will force the government to devise a solution in the sector and remove this Achilles Heel from our national economy.
Victor Cespedes Martinez, the former attorney general of the Dominican Republic under the Mejia Administration, has had his visa to enter the United States cancelled. The permanent revocation of his travel permit was based on Section 212 of the Nationalization and Immigration Law, which declares anyone presumed to be or having been an illegal trafficker of controlled substances ineligible for entry. The law also punishes anyone who "may be or has been a know collaborator or accomplice" in these type of activities. The consular section of the United States embassy notified Cespedes Martines last Tuesday, according to an embassy press release. Citing Section 212(a) 2(c) of the Naturalization and Immigrations Law, the revocation also applies to members of his family, including his wife and children. The visa cancellation came just five days after incumbent Attorney General Francisco Dominguez Brito revoked a release order for jailed drug trafficker Lourdes Machuca, who was then freed from prison under the aegis of an order from Cespedes and was granted for purported health issues. Machuca was under indictment for money laundering and assets of over RD$100 million were confiscated at the time of her arrest. In August, Dominguez Brito also revoked a release order for Mariza Aquino who was under indictment for trafficking heroine, as well as Ormis Freddy Pena Mendez, the former vice-consul in Port a Prince, Haiti, who had been sentenced to 10 years for trafficking 42.9 kilos of cocaine. All these people had been released by Cespedes Martines, as well as 80 others whose cases are currently under investigation by the Justice Department.
Victor Cespedes was appointed to the job in January 2003 after the resignation of Virgilio Bello Rosa from the post. Bello Rosa resigned after denouncing that there was no will within the government to combat corruption.
Although Cespedes is the first former Mejia administration official to have his visa revoked, the US had previously announced the cancellation of visas for three Mejia government officers while still in office. Those individuals were the head of presidential security, Colonel Pedro Julio (Pepe) Goico Guerrero; the head of the Migration Department, Miguel Vasquez and legal advisor Guido Gomez Mazara.
Divers are charging as much as RD$7,000 to recover a body from the very high surf off the North Coast, west of Luperon, where a stolen sailboat reportedly capsized and took the lives of most of its around 40 passengers. According to El Caribe and the Listin Diario, these local rescue teams operate with little equipment but full of incredible courage, and were credited with the rescue of four more bodies from the sea. A deputy in the Dominican Congress offered RD$3,000 for three cadavers, one family reneged on their offer and another gave a diver RD$7,000 for the body of their perished loved one. These and other scenes of suffering were common on the cliffs near the place where the small craft capsized with about 40 people on board. Members of the Dominican Navy, Civil Defense and Red Cross were in the area trying to offer some help to the victims' families. Small boats were seen at sea and others were riding the large waves as families struggled to find enough money to keep searching for their family members. Local divers from Luperon, equipped with just face masks, beaten-up swim-fins and a lot of local knowledge, pulled three bodies from the sea. Many of these divers have participated in rescue efforts before and, as Deputy Fiordeliza Estevez told reporters, "If you deal with the local divers, they will find your body."
Meanwhile in Puerto Plata, the local prosecutor's office has detained one person, as yet unidentified, in connection with the ill-fated trip. According to the prosecutor, the organizer of the trip went to the US with RD$1.4 million in his pockets, the result of the sale of the illegal passage for sums of RD$40,000 to RD$60,000.
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