The Chamber of Deputies approved the 2005 budget last night during a marathon session. Two readings of the budget were approved after an addendum sent over from the Executive Branch was attached to the bill. President Leonel Fernandez requested that the Deputies increase certain amounts for several institutions, such as the Autonomous University of Santo Domingo (state university), "Corazones Unidos," a charitable organization that treats heart patients, and the Dominican Rehabilitation Association, which tends to the needs victims of polio and other impediments. The President also asked that more money be given to the Central Electoral Board, the body that is charged with organizing the primaries for the various political parties.
As reported in all of the large-format newspapers, the budget session began just before 9pm and ended in the early hours of the morning. Although Alfredo Pacheco, the president of the Chamber of Deputies, had called the session into order at 2:30pm, it was not until 8:50pm that serious deliberations were begun. Apparently, according to the Listin Diario, a group of legislators had "halted the game" to coerce the government into paying the arrears on the money assigned to many of the NGOs, most of which belong to these very legislators. Their wish was granted and the session got underway. In view of the deputies' approval, the Budget of Income and the Law of Public Expenditures will go to the Senate for approval. Part of the presidential addendum in Article 3 says that when the National Congress approves new income, the Executive Branch will adjust the budget, determine the distribution of the budget disbursements and send the request for approval of the new disbursements to Congress.
Franco Uccelli, a research analyst for Bear Stearns, writes today in a Dominican Republic market commentary that, despite the partial reversal of the recent rally experienced by Dominican bonds and the continued uncertainties (final approval of next year's budget, restoration of an agreement with the IMF, the restructuring of the country's bonds, etc), he believes that "in the end reason will prevail, with each positive development giving the market a small reason to celebrate and to support the country's bonds."
Uccelli says that the reversal came "as a bit of surprise" and in his commentary he tries to explain the reasons for the retrenching of the Dominican bond prices. He analyses that not much has changed fundamentally over the past weeks and the DR economy continues to benefit from positive momentum garnered with the change of government. He comments that while fiscal challenges remain, the Fernandez administration's determination to implement harsh corrective measures give hope that the country's overall fiscal condition will significantly improve in 2005.
Uccelli tries to explain the reversal as such:
"One explanation could simply be that when the country's bonds hit target levels (in the mid-90s for the '06s and in the mid-80s for the '13s) profit-taking ensued. A second hypothesis suggests that seasonal factors may have contributed to the recent decline in prices. As we enter the holiday season, the market's attention appears to be focused on year-end matters rather than on potentially risky investments and is already thinking in terms of the New Year. This may have led investors to ease off the accelerator a bit and to shift to a 'smooth-sailing gear.'" He comments that the market may have opted to take a respite from what has been a rollercoaster ride for Dominican bonds this year.
"Perhaps the last thing that investors want during the relatively slow holiday season is to worry about whether Dominican Republic's Congress repealed the corn syrup duty, or if the budget was sanctioned as presented, or if a date has been set for the IMF to sign off on the country's new program. Accordingly, for some, a conservative stance may be warranted."
He continues to look favorably on investing in Dominican bonds. "For those who can tolerate the risk... this may present some interesting opportunities. Despite the recent noise surrounding the corn syrup duty, we believe that the government's view is likely to prevail, and that the prospects of Dominican Republic's inclusion in CAFTA will likely be preserved," he states.
He is optimistic also that the budget will be approved in time and explains that if this does not happen, the Fernandez administration will have "too much discretionary power to allocate fiscal resources in 2005, something that the opposition-controlled Congress would surely like to avoid."
As for the IMF program, he comments that the willingness of both the government and the Fund to make things work suggests to us that an agreement may be imminent. He explains that the agreement would then be followed by a presentation to the market of a bond restructuring proposal, one that the Dominican government insists will be market-friendly and will preserve the NPV of the country's outstanding bonds as much as possible.
The National Private Business Council (CONEP) asked the government not to relegate the sectors affected by the proposed Free Trade Agreement to second-level priority. In a note called "The Effects of the FTA," Elena Viyella de Paliza wrote that if the country has free industrial zones and tourism today, there is no reason to forget about those sectors that have been, for years, the economic backbone of the national economy." According to the report in Hoy, Viyella de Paliza said that the Dominican Republic would be a better country if it could count on the three sectors (agriculture, sugar and industry) along with the industrial free zones.
Jose Thompson, the director of the Center for Electoral Consulting and Promotion (CAPEL), warned the JCE that there are risks associated with organizing the primaries for the various political parties in the next election. Jose Arias, the chief JCE judge, told the press that Thompson and Ricardo Valverde, the Program Officer of the Inter-American Institute for Human Rights, had met with him to discuss the primary process. Arias said that no other nation except Uruguay has done what the Dominican Republic will attempt under the Primaries Law. They pointed out that in Uruguay the experience was not a positive one, in spite of possessing a well-educated citizenry. The foreign advisors are well aware of the fact that the primaries represent a risky undertaking for the JCE and have suggested that the electoral authorities contemplate the process for a while. Arias said that the consultants pointed out that in Uruguay there are not as many political parties as there are in the Dominican Republic, and yet the Uruguayan electoral board encountered many difficulties. Still, Arias told the reporters that in conversations with the parties that are scheduled to start in January, the politicians will have to decide whether or not to involve the JCE in their primaries.
Local press has focused on the fact that many civil registry offices suffer from major deficiencies and their solution is much more important than having the JCE fund the primaries for the political parties.
The first verdict rendered under the new Penal Code was handed down yesterday: guilty. This occurred just three months after the initial arrest, something unusually swift for the Dominican penal system. The judge of the Third Penal Chamber of the Court of the Province of Santo Domingo sentenced Juan Hierro to five years in prison and fined him RD$50,000 for his violation of Law 50-88 that deals with Drugs and Controlled Substances. Prosecutors Franklin Rodriguez and Julio Cesar de los Santos pled the case for the state. Hierro was apprehended as he tried to leave the country with 19 bags of heroine in his stomach. In contrast to the usual two or three years of processing under the former penal code, this case was concluded in just two and a half months. The provincial prosecutor, Perfecto Acosta, praised the new code for the ease with which trials may proceed through the courts.
Police Chief Manuel de Jesus Perez Sanchez said yesterday that the newly instituted Penal Code should be adjusted and that more severe sentencing guidelines should be imposed. "Recently, we have seen 112 cases where people with multiple-arrest and convictions records and extraordinary criminal dossiers have been brought before the tribunals and released," said the general. As an example, the police chief told of the cases presented to the tribunals in September, in which the same person was sent before judges on the second, tenth and twentieth of September, and set free each time. He also told of the person who in February of this year was arrested for auto theft, and last Tuesday was again arrested as he came from Haiti with two stolen vehicles. The DR's highest-ranking cop in the land said that auto theft is not being handled appropriately and because of this the Penal Code needed to be "adjusted." He argued for a quick approval of the reforms needed in order to "provide a stronger response" to crime. "It is not possible to consider auto theft as a misdemeanor crime," complained the general. Perhaps even more importantly, the general pointed out that police agents feel very frustrated when they apprehend a car thief, bring him to trial and, in the general's words, "the policeman goes out one door and the criminal goes out the other."
Civil Defense authorities in Santiago told reporters that 1,000 families had to be moved to safety as a result of the continuous rainfall over the past three days. According to weather reports, the rains are the product of a low-pressure ridge that came down from Florida and settled over the island of Hispaniola. Last year, a similar weather pattern caused hundreds of death in Haiti and the Dominican Republic as dry river beds became raging mudslides and torrents of water. This year, the rains have fallen mainly in the northernmost reaches of the country. In Santiago de los Caballeros, the Jacagua River, the Gurabo stream, and a creek that flows through the La Gallera section of town all overflowed their banks, causing the Civil Defense teams to react in a hurry. In La Gallera the creek destroyed houses, leaving several families homeless. Parts of the Jacagua section of the city were cut off from the town's center by the flood waters. The small bridge over the creek on Padre Las Casas Avenue was destroyed by the water and the pressure of accumulated materials in the watercourse. In Puerto Plata, hundreds of homes were flooded and the major roadways leading to Puerto Plata from the Cibao Valley were affected. Landslides along the Luperon Touristic Highway, as well as along the road to Navarrete, made transit difficult. The rains have also isolated sections of Nagua and San Francisco de Macoris. Reports from that region tell of severed links between Sanchez and Samana, and flooding along the Nagua River has cut communication with San Francisco de Macoris. Places like El Factor, El Pozo, El Papayo and Castillo were left without land communication due to the flooding of the Lechal River. In recent times, the flooding of the El Lechal River has cut Nagua off from the rest of the country three times, causing the local authorities to request that a bridge that can guarantee them access during flood stages of the river be constructed.
The Weather Department director Jose Maria Duquela told El Caribe newspaper that the weather should improve as of tomorrow and weather should be good for the holidays.
To follow weather, see http://dr1.com/forums/forumdisplay.php?f=34
During the first 11 months of 2004, there have been 1,185 deaths attributed to traffic accidents. The Transit Department of the National Police reported a total of 3,031 deaths due to traffic-related incidents between 1990 and 1999. Unfortunately, from 2000 until 2004 there have been 5,329 people killed in accidents on the streets and highways of the Dominican Republic. According to the Listin Diario, police sources say that the major causes of traffic accidents were the Big Three: running red lights, excess velocity and drunk driving. The most dangerous type of incident is that which involves two or more vehicles. Multi-car collisions claimed nearly 600 lives in the first 11 months of this year.
"Aguinaldos," the beautiful Christmas tradition of singing carols in the early morning hours, is now becoming an instrument for crooks to gain access to homes. One of the favorite songs that is always performed by the carolers goes like this: "Open your door, open your door, I am in the street, and if you don't open it, it would be an insult. To the ruffles, to the ruffles, to the ruffles of my heart." As such, Carmen Perez, a resident of the Cienfuegos area of Santiago de los Caballeros, did just that, moved by the Christmas spirit of the song. She opened her door to the carolers at 3am, only to discover that the yuletide troubadours were crooks, there to steal her belongings. Traditionally, young people get together to serenade their neighbors during the Christmas season, often receiving invitations to come in out of the "cold" and have a drink or a cup of ginger tea. The criminal element has apparently adopted this scheme to gain access to more loot. Coincidentally, this is happening just as the local Governor's Office and the Second Brigade of the National Army are preparing to celebrate a series of "aguinaldos" or "mananitas" in several of the city's barrios.
Columbia University and the Multilateral Investment Fund of the InterAmerican Development Bank have just released two studies on remittances. Their research is based on 3,000 door-to-door interviews conducted in the Dominican Republic and 800 telephone interviews of Dominican households in the US. These consultations were made in October 2004 by Bendixen & Associates. Titled "Sending Money Home" and "Remittances in the DR," focus on remittance recipients in the DR and remittance senders from the US. The Dominican Republic, despite having a population of approximately 8 million, comprises the fourth largest remittance market in Latin America and the Caribbean, behind Mexico, Brazil and Colombia. It is also the third largest per-capita recipient, after Jamaica and El Salvador.
Of an estimated two million adults born in the DR who are currently living and working abroad, 70% send money to their relatives on a regular basis, typically US$135 to US$165 at a time. Typical family remittances range from US$1,500 to US$2,000 a year. It is estimated that 38% of all adults (or 1.9 million people) currently living in the DR receive remittances on a regular basis, typically 12 to 15 times a year.
During 2004, over US$2.7 billion in workers' remittances was expected to be received by families in the DR from relatives living abroad. This is broken down as such: US$1.6 billion (59%) from the United States, US$815 million (30%) from Europe, US$240 million (9%) from Puerto Rico, and the rest from Canada and other countries in Latin America.
The study reveals that approximately 70% of Dominican families who receive remittances have household incomes of less than US$3,500 a year, indicating that for more than a million families, remittances are an economic necessity. For these families, remittances constitute approximately half of their total income.
For the complete studies and findings, see:
http://www.dr1.com/news/2004/121704_sendingmoney.pdf
http://www.dr1.com/news/2004/121704_remittances.pdf
Yet another Dominican baseball player has landed an enviable contract, as Adrian Beltre, from the El Cafe sector of Santo Domingo, signed a US$64-million deal with the Seattle Mariners. The contract is a five-year deal and is only pending a physical examination of the Dominican slugger who led the National League in homeruns in the 2004 season.
Beltre was one of the most sought-after free agents in baseball, along with Puerto Rican star Carlos Beltran. Beltre, only 25, hit 48 homers, batted .334 and had 131 RBIs. He came in second in the voting for the Most Valuable Player of the Year award. Defensively, Beltre only committed 10 errors during the '04 season.
Within 48 hours, Dominican baseball players have signed contracts for a collective total of US$117 million, including Pedro Martinez, who signed with the New York Mets on Tuesday for US$53 million.
One newspaper jokester said that "with a few more signings like this, the Dominican Republic can pay off the national debt."
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