| Daily News - Tuesday, 04 October 2005 |
President Leonel Fernandez has announced a program for the construction and completion of 153 infrastructure projects in different parts of the country, including roads, schools, water supply systems and housing projects, to be executed from October to next February with a total investment of RD$12.716 billion. According to a report in Listin Diario, the President explained that the works had been offered in 24 provinces where Provincial Development Councils have been sworn in and public hearings held. The projects include the reconstruction of the multiple water system for El Mamey which will supply tap water to Los Hidalgos, Nava, Vista Alegre and Marmolejos; the rehabilitation of the aqueduct in Monte Llano, the construction of a residual water treatment system in Sosua and the sewage system in Palma Sola, Puerto Plata. Also, the National Housing Institute (INVI) will build 1,060 houses at a cost of RD$700 million; the Ministry of Education will provide 51 new school buildings with 474 classrooms at a cost of RD$269.5 million; the National Tap Water Institute (INAPA) will put 31 aqueduct systems in operation at a cost of RD$4.647 billion; the Santo Domingo Aqueduct and Sewage Corporation (CAASD) will complete works with an investment of RD$791 million, and the Santiago Aqueduct and Sewage Corporation (CORAASAN) will invest RD$367 million. Coraaplata and the Technical Secretariat of the Presidency will build aqueducts with a total investment of RD$500 million whereas the Hydraulic Resources Institute (INDRHI) will build small hydroelectric projects, will improve irrigation systems and agricultural management centers, among other works, with an investment of RD$273.5 million. The Ministry of Public Works will execute 22 important projects with an investment of RD$2.442 billion in different provinces. These include the new bridge over the Higuamo River in San Pedro de Macoris, the reconstruction and refurbishment of the Duarte Bridge, the completion of the Puerto Plata-Gaspar Hernandez road, among others.
The government's economic team has revealed details of the revisions made to the stand-by agreement with the International Monetary Fund (IMF) which would allow the country to receive external income of approximately US$327 million during the remainder of this year, according to Diario Libre. The announcement was made in the presence of the local IMF representative. Central Bank governor Hector Valdez Albizu said that thanks to the results of the agreement revision and the renegotiation of the foreign debt, the government will be released from paying out US$342.9 million this year and US$614.2 million in 2006. The Technical Secretary of the Presidency, Temistocles Montas, stated that public spending was sacrificed to comply with the goals in the agreement. The IMF Directory will debate the second letter of intent on 17 October 2005.
The Minister of Industry and Commerce, Francisco Javier Garcia and ambassador Miguel Mejia traveled to Venezuela yesterday to expedite procedures to begin importing fuel and crude oil within the framework of the Petro-Caribbean agreement. The officials have the mission of agreeing on the conditions for the application of the agreement with Venezuelan authorities. This agreement will allow the government to import up to 50,000 barrels of oil daily from Venezuela, of which 40% would be financed at a 25-year term, with a two-year grace period and an interest rate of 1% annually. The only condition is that Venezuela must provide the transportation. The agreement is still not being fully taken advantage of because there have been difficulties with shipments. The mission hopes to resolve this issue.
During an address to the British Chamber of Commerce in Santo Domingo, Caribbean Council Director David Jessops focused on issues pertaining to the relations of the region's states in the light of the negotiations underway for an Economic Partnership Agreement (EPA) between Europe and the ACP member states in the Caribbean region. Jessops understands the complex issues include (1) economic challenges and the relative advantage of the DR when compared to the English-speaking countries in the region, (2) the longer term role the DR is seeking within the region and Latin America, (3) the nature of Europe's long-term relationship with the Caribbean, and (4) the variable levels of development within the region and the need for greater mutual understanding. Anglophone Caribbean nations express their fear of being marginalized in favor of more advanced developing economies, a process that could take away the advantages they had enjoyed previously in preferential arrangements with Europe. Jessops argued that no one would be able to create a homogeneous single regional market rapidly enough to withstand the stresses of globalization. He added that Caricom nations want to deepen the integration process through the creation of a Caribbean Single Market and Economy (CSME) but have not been successful. On the contrary, it is in danger of dividing into very different economic units. At one end there is Trinidad and Tobago, a nation rich in oil and gas, which has emerged as a significant trading partner of the Dominican Republic on a reciprocal basis. At the other end of the scale are the small islands of the Eastern Caribbean which have begun to wonder what benefits the CSME might bring them and the extent to which an EPA with Europe would have any value. They believe they should be given special and differential treatment based on the growing trade imbalances between larger and smaller Caribbean states, their high level of indebtedness, and the difficulty of achieving competitiveness. Barbados Prime Minister Owen Arthur is suggesting the creation of a fund similar to that successfully established by the European Union to reduce disparities between its member nations. The EU has invested Euro324 since the mid 1980s to enable the poorer member states to catch up with their neighbors. Other difficulties are the lack of agreement on the manner in which the CSME will operate and whether Caricom should be afforded some sort of executive authority over it. Jessops informed that Europe is pressing for the completion of negotiations on a Caribbean Economic Partnership agreement by 2007. It believes that the completion of a CSME embracing all regional ACP partners with a wide range of supporting measures is a pre-requisite for the full integration of the Caribbean into the global trading system. Regarding the DR, being significantly larger than any other nation in the region - save Haiti and Cuba - presents unique problems for its economic integration with a region beset with difficulties relating to the incorporation of the smaller but culturally homogeneous states of the Eastern Caribbean. The DR, with its enormous potential, is seen as a competitor and an economic threat. Despite this, the DR has sound economic, development and trade reasons to want to be within Caricom. Dominican Foreign Relations Minister Carlos Morales Troncoso has suggested the nation's interest "to negotiate with the European Union as a truly unified bloc solidly grounded in common rules". However, the DR is in a better position than most other regional nations to make use of the opportunities that an EPA with Europe will offer, but to take the fullest advantage of new trade arrangements it needs a deeper relationship with Caricom. Europe considers that DR membership of Caricom will have political, economic and functional advantages. The European Commission and the EU member states think that the DR's economic and political weight, its culture, its security and stability, as well as that of the region, would be enhanced by a closer relationship with Caricom and would add value to the region's relationship with Europe. Yet to be determined is whether there is any political will in Caricom to integrate the DR. A disadvantage is that the DR has not yet done enough to assure its smaller Caribbean neighbors that it truly understands their problems, fragility and natural concern about a vastly larger neighbor with a different culture, political system, and at times, alternative business norms. Jessops believes that most of the Caricom member nations are not ready for a closer relationship with the DR and suggested that the DR should take a longer term view, recognizing that the region is not ready for a widening of the integration process and seek to chart an independent way forward that will make it necessary over time for Caricom to dock with the DR. He stated that despite Caricom's fragmented nature, there are significant opportunities for cross investment, joint ventures and partnerships with some of the region's larger companies. A vital step would be for the DR to make a statement at the highest level setting out in detail the nation's vision of how a closer relationship might bring value to the English-speaking part of the region, as well as to the DR. Jessops concluded by saying that the challenge for the DR - as a relatively successful market economy significantly larger than those of the English-speaking nations - is for it to identify practical ways to engage in a manner that enables relationships within the region and with Europe to grow and for all to prosper.
The assistant attorney general Frank Soto, who is directing investigations into the passport fraud case, informed there were representatives of the alleged "mafia" in all regions of the country. According to Diario Libre, he also said no one at the Ministry of Foreign Relations is considered a suspect in the case whereas at the Dominican Municipal League (LMD), evidence was found against former Technical Undersecretary Amaury Guzman, who was fired for his connection to the case. According to Soto, in the southwestern region of the country the ringleader was the Mayor of Las Yayas, Eliezer Ramirez, who is detained at Najayo Prison. In the Cibao region, operations were directed by the former president of the City Council of Fantino, Cotui, Uladislao Abreu Duran, whereas the contact at the LMD was Guzman, who is also being detained at Najayo. Soto does not discard the possibility of hundreds of people being involved in this scandal. The Migration Department authorized the exit of 67 fake wives of municipal council members using official passports. The department is claiming not to be involved in the case, though several memoranda signed by lieutenant colonel Francisco Romero Lopez, director of the institution's investigation department, were found to authorize the exit of dozens of people. Meanwhile, the Ministry of Foreign Relations is claiming no responsibility in the case of passports it issued "upon receiving the pertinent documents and instructions from the LMD, and in accordance with official procedures". The ministry is participating in the investigation and is offering all its collaboration to the Attorney General's department.
Dominican Republic analyst for Bear Stearns Franco Uccelli believes October will be a challenging month for the country. In addition to being the month when the government scheduled to take its case to the IMG, travel back to France to finalize negotiations with the Paris Club for bilateral debt relief for this year and hopefully 2006, and complete negotiations with commercial banks to restructure US$200 million worth of credits coming due in 2005-2006, the country's central bank will face some US$1.1 billion in CD maturities. Based on past experience and the large domestic demand for the instruments, monetary authorities are confident there will be no problems to roll over the maturing paper - 80% of which is held by individual investors, whose instruments are likely to roll over automatically, rather than by institutional investors, whose investment decisions are more strategic in nature and therefore more unpredictable. Also, both the central government and the country's commercial banks would lend a hand should the need arise. Official sources say the central government has close to US$400 million on deposit at state-owned Banco de Reservas and the privately-owned banks have expressed their desire to continue investing in Central Bank paper, an option that has been very profitable for them in the recent past and that has allowed them to put about 25% of their assets to productive use. Uccelli believes that the CD maturities will represent a test for the Central Bank's credibility and for the financial integrity of the country as a whole. Should the authorities be able to handle the situation as smoothly as they expect, it would greatly contribute to increase market confidence in the management of the economy.
German ambassador Karl Kohler said that bilateral relations between the DR and Germany have intensified during the last year and he highlighted the different cooperation and technical assistance programs that the German mission is performing in the country, particularly in the fields of the environment and natural resources, according to Listin Diario. Several programs and agreements have been signed to strengthen bilateral business and diplomatic relations, said the diplomat during a meeting with the press in his residence. The meeting was called to celebrate the 15th anniversary of German unification which took place 3 October 1990, after 40 years of forced division.
A large number of counterfeit RD$500 and RD$2,000 notes are circulating in Santiago, according to the Central Cibao Police Department. Santiago Police spokesman colonel Jesus Cordero Paredes made the announcement and warned the public to look out for the bills. In relation to the forgery, Feliz Jimenez Calderon and Simeon Camilo Duarte were arrested and indicted, accused of swindling several people with the fake currency. They were caught in possession of 27 RD$2,000 notes and 69 RD$500 notes, which were sent to the Central Bank. Police are also searching for other people accused of swindling businesses with fake money.
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