DR1 Daily News will not be updated again until next Monday, 3 January 2005. The DR1 Daily News staff is taking its New Year holiday as of tomorrow, 30 December. Top headlines occurring over the 29 December-2 January period will be compiled for the Monday, 3 January news digest. Important breaking news may appear on the DR1 Forums, however, so please check http://www.dr1.com/forums that is updated 24 hours a day, 7 days a week. Also check out the Calendar at http://www.dr1.com/calendar for suggested activities for these holidays. All the best in the New Year!
The Superintendent of Power has ordered a reduction in the electric bills of between 5.63% and 8.41% beginning next month. Clients will save an estimated RD$131 million. About 110,000 clients that consume between 200 kWh and 300 kWh will see an 8.41% decrease in their rates compared to the December invoicing. These are the consumers with the lowest incomes and in the neediest neighborhoods. Industrial and commercial clients will get a 5.63% break on their bills. According to the press release, the Superintendent of Power stated that the average consumer will see a 5% drop in the cost of electricity with regard to December's billing.
This is the first time that the Superintendence announces a decline in rates after consistent increases since the capitalization of power distributors.
The Monetary Board, during its 23 December meeting, approved the transfer of assets held by the Central Bank, as well as other government assets, into several closed investment funds to be administered by fund managers appointed by the Central Bank. The issue at hand is the payment of the quasi-fiscal deficit produced by the issuance of certificates of deposits that will generate interest payments of RD$22 billion over the next year. The board's new steps are part of a second phase of the proposed solution to the quasi-deficit problem. Assets now grouped under Proagra and Costa Norte, which formerly belonged to banks that were either rescued or closed in 2003, will be included with other government assets to be handled by the Central Bank. These actions are being taken under the aegis of Law 19-00, which created the Monetary and Financial Laws, as well as the Stock Market Law.
The rector of the Universidad Autonoma de Santo Domingo (UASD) stated yesterday that there is no current economic disequilibrium in the Dominican Republic to warrant the signing of such a severe accord as that which is being drawn up by the International Monetary Fund. "The external debt is being paid like never before," said Garcia Fernandez, according to Hoy newspaper, and he exhorted the authorities to act prudently before engaging in any definitive agreement, saying, "This situation is different from what happened in Argentina."
He maintained that the DR's economy will close the year with a rosier outlook than was expected, owing to a greater stability in the exchange market and reduced interest rates, which in turn would stimulate a drop in the cost of money. While he noted that the success of the DR's economy would rely heavily on external factors, he also underlined the fact that 2004 was a good year for exports and also generated a surplus in the balance of payments, which assisted the growth seen in tourism and international remittances.
While the rector recognized that economic and monetary stability is essential and that the crisis was not over, Garcia Fernandez warned that the government must be aware of the consequences the IMF accord will entail, such as overblown taxation. To disregard these consequences "would be to undermine the social peace."
The drop in the cost of the US dollar produced a reduction in the prices of automobiles, and this has caused a distortion in full coverage insurance premiums for car owners. According to Hector Linares of the Listin Diario, it is possible that a full coverage policy will pay just 50% or 60% of the assured value of the vehicle. Cars that were insured over four months ago are over-insured, since the insurance companies pay for damages at the market rates at the time of the accident. The greatest drop off has been among those vehicles that are two or more years old and whose market value has fallen by 50%, according to Linares. As an example, a 2002 SUV that cost RD$750,000 to RD$800,000 that year, saw its value double during the next 12 months. The original full coverage policy cost around RD$35,000 to RD$40,000. During the later part of 2003 and the early part of 2004, the same vehicle, used, had increased in value by 150%-200% due to the devaluation of the currency. Insurance policies doubled in cost to perhaps RD$90,000 for the same vehicle, and with the bolstering of the national currency, the same vehicle is now over-insured. As a result, insurance brokers are recommending that their clients reassess their cars, and if there is a high proportion of the last policy still in force, they should request either a credit towards the next policy or a return of funds.
The US dollar jumped RD$4 to RD$5 on the exchange markets over the past weekend. During Friday, Saturday, and Monday activity, dollars were being bought by the various exchange banks at prices of around RD$28.50. On Tuesday, the dollar jumped to as much as RD$34 per dollar. Even the Central Bank website showed a big move as the dollar went from RD$28.77 to RD$29.87 overnight. According to Hoy, the main cause of the new rise in the cost of the US currency is the fact that the Dominican Refinery has entered the marketplace in search of dollars to meet its oil payments. Hoy also says that many analysts feel the situation is circumstantial and that stability will return. One of the major concerns for local analysts is the fact that over the past four months prices of consumer items have not been able to keep pace with the dropping cost of dollars. While some items have fallen in price, others have not, and while there are many reasons for not being able to keep up with the fall in dollar costs, the analysts are worried that the sellers might cancel plans to reduce prices in the face of a fluctuating market.
The Dominican Republic may have lost out on a US$30-million loan this week, as the Congress gave it the go-ahead loan on the last viable day. According to Hoy newspaper, the loan was destined to support a program of reform in the Public Health sector. The agreement that was signed on 27 June 2003 with the World Bank was granted to finance the first phase of the health reform program. Chamber of Deputies president, Alfredo Pacheco, said that the authorities should make a "great" effort in order to save the loan. According to Pacheco, it was for this reason that he called the deputies into session on the Monday after Christmas. The agreement was submitted by the Executive Branch last October and the Senate gave its approval on 7 December, from where the legislation reached the Chamber of Deputies on 14 December. According to a memorandum sent to President Fernandez by Senate leader Andres Bautista, the total cost of the program would be US$42 million, with the DR's counterpart funding totaling US$12 million.
President Leonel Fernandez reiterated his hard line on drug-related cases yesterday. As he presided over the proceedings at the inauguration of the new radar equipment at the Punta Cana airport, Fernandez reminded his audience that in his administration there would be no "sacred cows" in cases involving drugs. He pointed out that in his inaugural speech he had said, "The country will be shaken up and the rotten fruit will fall." Fernandez said that the recent case involving police and army officers and other enlisted personnel was just the first sign of his "zero tolerance" policy on drugs. He indicated that, for the first time, there is a local market for drugs that has emerged as the result of subtle changes in the distribution methods that use the Dominican Republic as a jumping off point.
Civic organization Participacion Ciudandana (PC) and the Foundation for Institutionalism and Justice (FINJUS) expressed their regret that lawyer Felix Olivares Grullon had chosen to abandon his role in the civic society movement to join the defense council of ex-Captain Quirino Ernesto Paulino Castillo, the alleged leader of a narco-trafficking ring. Paulino Castillo is under arrest for his suspected involvement with a 1,387-kilo shipment of cocaine valued at more than RD$900 million. Hoy newspaper reports that PC and FINJUS made separate statements to express that taking up the defense of a drug trafficker was "incompatible" with the role of civic society organizations, although the heads of both groups said they would respect Olivares Grullon's choice. Alfonso Abreu Collado, the spokesman for PC, stated that civic society groups must draw their combat lines against certain activities, and that drug smuggling was certainly one of them.
The man in question has been an outstanding civil society activist and, until last week, was an advisor to the chief of the National Police in matters of the new Penal Procedures Code, of which he was one of the authors. Olivares Grullon was a principal advocate of police reform and a member of a penal reform commission that was sponsored by USAID.
Hoy reports that the lawyer will allegedly receive a multibillion-peso offer to defend Paulino Castillo.
Feisty as ever, former President Hipolito Mejia told reporters that he was ready to face the "lies" that have been prepared to smear both him and his administration. Mejia said that by the conclusion of these Christmas holidays, he would have important statements to make regarding drug trafficking in the Dominican Republic. The former head of state also said he would reveal significant information that would "assist in clearing things up." In his usual confrontational tone, the former chief executive said he would not permit any insults made about him nor any type of "irresponsible accusations." During his call-in to the well-known radio show "El Gobierno de la Tarde," the politician said he was tying up loose ends so that he could talk frankly once the holidays were over. He seemed particularly upset by a photograph that was published shortly after Quirino Paulino Castillos was arrested as part of the 1,387 kilos cocaine bust. This photo showed Mejia's brother-in-law, Sergio Grullon, swearing Paulino Castillo in as the director of the re-election campaign in the province of Elias Pina. Coincidentally, this was one of the very few provinces in which the then-incumbent President won a majority.
The Licey, representing the city of Santo Domingo in the nine-game semifinals of the Dominican Winter Professional League that start on Sunday, 2 January at the Santo Domingo Quisqueya Ball Park, has assembled a dream team that would be the envy of any Major League team, as reported in Hoy newspaper. Team members include:
Vladimir Guerrero (Anaheim Angels), the MLB 2005 American League MVP, Jose Guillen (Washington Nationals) and Eric Byrnes (Oakland Athletics). Also playing are Ronnie Belliard (Cleveland Indians), Deivi Cruz (San Francisco Giants) and Cristian Guzman (Minnesota Twins). Other players are D'Angelo Jimenez (Cincinnati Reds), Carlos Pena (Detroit Tigers), Timoniel Perez (Chicago White Sox), Jose Offerman (Minnesota Twins) and Henry Rodriguez (Pittsburgh Pirates). Pitchers are Felix Rodriguez (New York Yankees) and Jose Jimenez (Cleveland Indians). Others on the pitching staff are Manny Aybar (New York Mets), Juan Cedeno (Boston Red Sox), Wilton Chavez (Washington Nationals), Juan Cruz (Oakland Athletics), Felix Diaz (Chicago White Sox), Pedro Liriano (Philadelphia Phillies), Vladimir Nunez (Colorado Rockies), Roberto Novoa (Detroit Tigers), Jorge Sosa (Tampa Bay Devilrays) and Yhency Brazoban (Los Angeles Dodgers), as reported in Hoy newspaper.
The Tigres del Licey qualified along with the Aguilas Cibaenas (Santiago), Gigantes (San Francisco de Macoris), Estrellas (San Pedro de Macoris) for the round robin that starts 2 January.
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