| Daily News - Monday, 06 December 2004 |
According to a report in the Listin Diario, the payment of such things as the public debt, the government payroll, the subsidy to those who do not pay for electricity or consume less than 200 kWh per month, and the subsidy for the cost of propane gas will make up 74% of the 2005 National Budget that has been set at RD$207 billion. For the payment of the national debt, RD$64.4 billion has been allotted (20%), payroll is given RD$36 billion (22%) and the subsidies will consume RD$19 billion (12%).
Finance Minister Vicente Bengoa commented in Hoy newspaper that the government must follow the IMF's instructions as to where the money goes in 2005 and 2006. He attributed this to the doubling of the foreign debt that occurred during the Mejia administration. He said that the foreign debt ascended from US$3.6 billion at the start of the Mejia government to US$7 billion at its conclusion. Another US$3 billion has been contracted since, and hefty commissions will have to be paid, even if this debt is not disbursed. According to the Central Bank, the foreign debt accounts for around 53% of the Gross Domestic Product.
The president of the Dominican Petroleum Refinery, Aristides Fernandez Zucco, says that the appreciation of the peso currency means the country has economized its fuel purchases by approximately RD$2 billion, or US$60 million. He says that a new measure contributing to increased stability is that the refinery is now scheduling its hard currency purchases so as not to influence the exchange market. Speaking on Channel 11's D'Agenda TV program produced by Hector Herrera Cabral, Fernandez said that another success of the present administration has been the elimination of the long lineups at the propane gas stations. He says the government has also recovered its credit with fuel suppliers, and is no longer obliged to pay for imports in cash or by letter of credit. He also commented that consumers have benefited from the dropping price of fuel. Last week, the price of regular gasoline dropped by RD$4.
Despite this, however, Fernandez urged the population to conserve power and fuel.
The president of the Social Christian Reformist Party (PRSC), Federico Antun Batlle, alerted the population to what he called the "abusive high price" consumers must pay for electricity service, now distributed primarily by the government itself following the buyback of the Edesur and Edenorte power distribution companies. Antun said that the exchange rate the government is using in the price index is well above the real rate. Furthermore, he informed that the government is not factoring in the reduction in the international price of fuel. Antun says that the overblown price charged to consumers has meant a bonus of RD$500 million a month in government revenues.
Diario Libre newspaper points out that consumers suffered the effects of a 59% rate increase in the rate from January to September, despite the long hours of blackouts dished out. The newspaper indicates that while consumption declined during that period by 22%, billing increased by 25%. Data for the analysis comes from this year's third-quarter report published by the Central Bank.
The government has promised the International Monetary Fund to eliminate the subsidy on the rate that still benefits those consuming less than 200 kWh, plus more increases for other users of the service.
Power Superintendent Francisco Mendez said there will be no reduction in power rates. As reported in El Caribe, the government will compensate the major inefficiencies of the power distribution companies with increases for those who pay for the service. He argued that when the peso depreciated, the government did not increase the rate charged to consumers in the same proportion.
Senator Alejandro Santos, the president of the commission that is studying the elimination of the surcharge on corn syrup (HFCS) imports, which has created an impasse with the free trade agreement signed with the United States and docked to the CAFTA, said the Senate would take its time to study the treaty. As reported in El Caribe newspaper, he said that even if the Senate eliminates the surcharge, it will not accept the Dominican version of the CAFTA until an in-depth study is carried out. "If there is a sector that may be affected by the FTA, we will see how the negative effects can be reduced. But, in the same way, we want to detect the opportunities in order to help companies take the maximum advantage of it and gain access to new markets," said Santos.
In his opinion, the DR-CAFTA will be the instrument, second only to the Constitution, with the greatest impact on the juridical and institutional life of the country. He expects the study to be concluded in two months' time.
Sales went great for vendors of new cars over the weekend. The Listin Diario reports that as of noon yesterday, an estimated 400,000 people had visited the Auto Feria Popular sponsored by the Banco Popular. For sales made at the event, the bank provides financing and the vendors offer sale prices on their vehicles. The bank was offering a 26.95%-28% interest rate on 60-month financing, with 0% for full insurance. The institution was also accepting used vehicles as part of the down-payment. They had reportedly approved 600 loans for new vehicles as of noon yesterday. The dealers sold all the new cars they had in stock, as well as those they expect to receive in December, January and February. The vendors attributed the boom in sales to the dropping price of the vehicles, some down as much as 50% due to the appreciation of the peso.
According to a report in El Caribe today, the telecommunications market has expanded its contribution to the Gross Domestic Product from 5% in September 2000 to 10.3% by the end of the third quarter of 2004. From 1987, the telecommunications market has experienced double-digit growth, with an average of 17.7%. Reporter Edwin Ruiz quotes Jose Alfredo Rizek, the new director of the Dominican Institute of Telecommunications, who said that the sector's augmentation first boomed when Tricom was able to reach an interconnection agreement in 1994 with Verizon (then Codetel), which had previously enjoyed a monopoly of the local market since 1931. He said the second boom occurred with the arrival on market of Orange and Centennial.
Rizek told El Caribe that the fastest growing segment of the market is for users of pre-paid telephone cards.
Statistics now show that as of 30 September, there were 2.5 million cell phones in use, meaning that 28 of every 100 Dominicans have a cell phone, up from 1.1% in 1996. Internet accounts have increased during the same period, from 5,819 to 104,239 accounts, and an estimated eight people using each connection, according to Indotel. Some 21,286 Dominican households had access to broadband DSL service.
Manuel E Bonilla of Verizon estimates that by 2007, companies will be seeing revenues of RD$1.9 billion – four times more than in 1993. Of the total, RD$400 million will stem from mobile phone calls. Bonilla says that Verizon controls 44% of the market, followed by Orange and its 26% market share, Tricom with 22% and Centennial with 8%. He said the companies have invested US$1.5 billion in the sector from 2001 to 2004, but while they employed 3,295 people in 2000, employment is now down to 1,860.
Rizek says that telephone rates should go down in December by 10%-20%, in order to reflect the appreciation of the DR peso.
PLD Senator Jose Tomas Perez feels the Law of Primaries could revolutionize politics in the DR. He explained on Orlando Jorge Mera's talk show "Lideres" on Channel 9 that the law of primaries breaks the traditional closed frameworks of the parties and obliges everyone to use the same voting list of the JCE.
The PLD senator says that those who oppose the law are the same who control the parties' voters' lists and computer centers of the parties – the management and political bureaucracies. He said that the law may require some changes in format only and suggested that the law should be postponed for the deputy and municipal elections until an electronic voting system has been put into place.
He supports the bill because he says it obliges those who want to be candidates to work in their communities, and forces transparency in the organization of the primaries. He said the use of a single voting list and the selection of all candidates on the same day eliminates the possibility of the same voter casting a ballot for more than one candidates, that is, of anyone having duplicate political membership cards and voting for several parties, a practice that is common.
Perez is the only member of his party to have been vocally in support of the law of primaries. Meanwhile, the secretary general of the PLD, Reynaldo Pared Perez, told Hoy newspaper reporters that the law is inapplicable due to the excessive number of candidates' names that the ballots would have to list.
The JCE has called for the law's implementation, which will require the institution to organize the presidential, congressional and municipal elections, for which they have requested RD$750 million to begin the congressional and municipal elections of 2006. Judge Salvador Ramos said, however, that the new system could be implemented with RD$70 million.
Hoy's "Que se Dice" column today suggests the next time Moli Alfredo Perez plans to steal public transport vehicles that he think big. The chauffer, who took possession of just one OMSA bus, was sentenced to jail by the judge hearing his case. "Of course many people are thinking that Perez would have fared better with the justice system if, instead taking one unit, he had been held accountable for giving away 100 or 500 vehicles - or an entire fleet - to individuals that had nothing to do with government programs." The writer is ostensibly referring here to the Plan Renove fraud case, which bilked the government of billions of pesos and involved approximately 5,000 vehicles, and for which no one has yet been sent to jail.
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