Some 20 Spanish businessmen expressed their interest in investing in the Dominican Republic after acknowledging the return of confidence and good results of the Dominican economy, during a meeting with President Leonel Fernandez in Barcelona, Spain, yesterday. The meeting was hosted by Architect Ricardo Bofill, who is behind the proposal to build the controversial and much criticized construction of a private artificial island off the coast in Santo Domingo. A businessman of Turkish origin, Isak Andic, expressed his willingness to establish his textile emporium called "Mango" in the DR so it can serve as distribution center for its products to the rest of Latin America.
Hoy newspaper reports that also present were construction, tourism, real estate, energy and banking sector businessmen. The newspaper mentions Josep Oliu of Sabadell bank, Julio Lage of the banking sector; Jose Manuel Entrecanales Domecq of Acciona; Enrique Lacalle of Barcelona Meeting Point; Ramon Sanahuja Pons of Sacresa; Guillermo Vallet Gomez of Hoteles Catalonia; Jose Maria Cabrera of Masterpolis; Jaime Morato of Necso among others.
President Fernandez is due to return this afternoon to the DR. He had traveled to Spain on 12 October to attend the Iberoamerican Heads of Government and State Summit.
Yesterday, the Executive Directorate of the International Monetary Fund (IMF) unanimously approved the first and second reviews of the stand-by arrangement with the DR, making the country eligible to receive between US$320 and US$327 million that could contribute to reducing and stabilizing the foreign exchange rate. This is unofficially expected to consolidate international reserves as a result of the confidence that an organization like the IMF inspires. Positive consequences that will derive from the new agreement are greater trust of international investors and an improved country-risk classification. A government source informed Diario Libre that the IMF was influenced by the prudence, the fiscal and monetary policies of the government, and the express willingness of the authorities to comply with reforms established in the letter of intent.
Commenting on the matter, Franco Uccelli of Bear Stearns writes: "The Fund's actions, which were widely expected, validate the Dominican Republic's recent economic performance and current policy priorities. They also pave the way for the disbursement of US$327 million in multilateral credits between now and year-end, moneys that will be used to strengthen the country's international reserve position and should help ease pressure on the local currency."
The Central Bank reports that the Consumer Price Index (CPI) increased by 3.26% during September when compared to August, mainly due to the high prices of crude oil on the international market, which have been the highest in history. If the impact of increases in the prices of fuel were to be excluded from the monthly inflation figures, the CPI would have increased by only 1.19% during September - something that, according to the Central Bank, proves that the increase in internal prices does not have to do with monetary reasons or other internal factors. Accumulated inflation during the first nine months of this year is at 6.13%, and annual inflation for the past 12 months is 4.22%, significantly lower than the same period last year (47.89%). The transport sector had the highest increase with 9.21%. The education sector increased by 7.0% and food increased by 1.30%. The revised inflation projection for the end of 2005 has been set at around 9.44% assuming there is no other disproportionate increase in the price of oil. Bear Stearns research analyst Franco Uccelli does not rule out that the increase in rates last week may be followed by a tightening of the monetary base. These policies could help ease both devaluation and inflation, but they could also restrict the country's growth potential. Uccelli believes that restoring monetary stability, rather than fostering growth, should be the DR's top priority at the moment and favors the Central Bank's efforts toward that end.
Yesterday, the Dominican government announced it had successfully concluded the agreement for the restructuring of the external public debt in London, England. According to a report in El Caribe, Finance Minister Vicente Bengoa and Presidential Technical Secretary Temistocles Montas signed on behalf of the Dominican government. The debt was renegotiated with Bilbao Vizcaya, ABM Amron, Nova Scotia, Deutsche Bank and HSBC banks. The agreement establishes deferred payments to the international private banks corresponding to 2005 and 2006 for a total of US$180 million, and includes grace periods of two years plus three additional years for the payment of principal. The London Club agreement needs to be ratified in Congress.
The DR also committed to pay US$35 million in arrears owed to the commercial banks that accumulated through December 2004, within the next two weeks.
Franco Uccelli of Bear Stearns comments positively on the advances in debt restructuring. He points out in a 18 October report that next on the government's agenda is to finalize a debt relief program with the Paris Club for this year and possibly next. "Armed with the endorsement of the IMF and having successfully restructured most of its external private debt and, as a result, having complied with the Paris Club's comparability of treatment demand, we assign a high probability of success to the Dominican Republic's efforts to re-profile its bilateral debt coming due this year (a request for relief for 2006 may have to be reformulated at a later date)," he writes. "We welcome the Dominican Republic's progress toward the restoration of healthy relations with the international financial community, something that enhances its credit standing and should allow the authorities to shift their attention more firmly toward the consolidation of the country's economic recovery," writes Uccelli.
Executive Branch legal consultant, Cesar Pina Toribio, and the former president of the National Private Business Council, Celso Marranzini, agreed yesterday that the DR has a judicial situation that favors foreign investment, although they admitted that there was room for improvement. Pina Toribio referred to comments made by Spanish ambassador Almudena Mazarrasa Alvear, stating that they referred to situations in the recent past. The official stated that the protection of all rights has been strengthened during the current administration. Marranzini was surprised by the ambassador's comments and pointed out that Spain has been one of the countries making the most lucrative investments in this country over the years. However, the businessman considered that laws and application of justice must be improved because there are many deficiencies.
El Caribe indicates that Mazarrasa had stated the country did not have judicial security and that this made it impossible to attract foreign investors.
National District Joint DA, Carlos Guerra Mirabal, was arrested yesterday and is due to be indicted today after allegedly accepting a bribe of RD$900,000 from two men accused of robbery. According to Listin Diario, the men, who had stolen US$200,000 and RD$700,000 from Arcadio Pichardo's house, also gave Guerra Mirabal a vehicle valued at RD$225,000 and RD$150,000 in cash as a "gratuity" for having "resolved" the case in such a "diligent" manner. District Attorney Jose Manuel Hernandez Peguero suspended Guerra Mirabal, who is detained in the cells at the Palace of Justice in Ciudad Nueva.
Executive Branch legal consultant and member of the Directing Council of the Ethics Commission, Cesar Pina Toribio, has admitted that the authorities have no information to present regarding the alleged abnormalities in the tender called by the Presidential Office on Information Technology and Communications for a Dominican Government website. This comes one month and ten days after the investigation began. The team that is investigating the allegedly over-valued tender is led by Octavio Lister, Director of the Corruption Prevention Department. Other members of the team are Celso Marranzini, Omar Caamano, and Ramon Tejada Holguin. Diario Libre learned that they were due to have presented their results last week.
The Miami Herald carries a feature today on the opening of the racketeering trial at the US District Court in Miami on Monday pitching the Dominican state against Dominican mega-millionaire financier Luis Alvarez Renta. The newspaper says that the Miami trial - which is being closely watched in the Dominican Republic where the economy went into a tailspin in 2003 after the $2.2 billion collapse of Banco Intercontinental, known as Baninter - "will serve as a test case for whether a foreign government can successfully use the US courts to bring to justice and recover money from powerful individuals who are involved in foreign banking failures." In his opening address, Alvarez Renta's lawyer Richard Smith of Shook, Hardy & Bacon explained that his client had moved the money from Baninter to a company he controlled, Bankinvest, to pay himself and another Florida company he controlled, Wadeville Investment. The Miami Herald reported that Alvarez Renta admitted in the trial that money was transferred to Wadeville, a company that only existed to pay his personal and company bills in the United States.
"There is no testimony that Luis Alvarez Renta or Wadeville stole any money; there is only evidence that Bankinvest did not pay back its corporate loans," Smith told the jury of four men and four women in defense of his client. The outcome of the case in Miami, is likely to have an effect on the slow-moving ongoing Baninter case in Santo Domingo.
The Miami Herald story mentions that in Santo Domingo a Dominican court ruled last Monday that former Baninter Bank president, Ramon Baez Figueroa, two other former Baninter executives and Alvarez Renta must stand trial for laundering bank assets.
Interestingly, the Miami Herald reports that the judge in charge of the case, US District Judge Jose Martinez, was born in the DR and came to the United States when he was eight years old.
http://www.miami.com/mld/miamiherald/12927910.htm
Judge Esther Agelan Casasnovas has sentenced 10 of the people accused of fraud and prevarication against the Dominican state in the Plan Renove case to different convictions and fines. According to Diario Libre, among those found guilty is Pedro Franco Badia, former president of Plan Renove, who was sentenced to three years house arrest and a RD$15 million fine. Also convicted were Fabio Ruiz, another former president of Plan Renove, to four years in Najayo Prison and a RD$10 million fine; Paulino Antonio Reynoso was sentenced to two months in prison; Antonio Marte, three years in Najayo Prison and an RD$8 million fine; Milciades Amaro Guzman to three years in prison and a RD$5 million fine; Gervasio de la Rosa to two years in prison and a RD$3 million fine; Blas Peralta to six months imprisonment in Najayo and a RD$2 million fine; Freddy Williams Mendez and Alfredo P. Linares (Cambita) were each sentenced to six months house arrest and RD$1 million fines. Ramon Emilio Jimenez, Johnny Morales, Diogenes Castillo and Siquio Ng were acquitted for lack of sufficient proofs.
Listin Diario reports that the accused were found guilty of defrauding the Dominican state of more than RD$1.9 billion. They were found guilty of violating nine articles of the criminal code and one article of the Constitution, citing embezzlement, criminal association, swindling, falsehoods in public and private writing, and prevarication. The convicted felons said they would appeal against the sentence, whereas the Justice Department described it as "positive".
The Plan Renove was promoted as the Hipolito Mejia administration (2000-2004) solution to the deficiencies in public transportation in the Dominican Republic. Thousands of vehicles, mainly buses and minibuses, but also station wagons and an assortment of fork lifts and heavy trucks were imported with the government taking on a multi-million dollar loan with commercial banks at non-preferential rates. These vehicles were passed on primarily to members of major transport unions in the DR, and participants received beneficial terms, with the exchange rate risk and overvaluation in the purchases passed on to be paid by Dominican taxpayers.
The case revolves around a US$159-million loan taken on by the Mejia government to finance the acquisition of 5,648 vehicles, purportedly to improve public transportation in the DR. The program was criticized for irregularities from day one, however. In January 2003, even the Mejia administration's controller general, Federico Lalane, released findings of an audit that found a long list of irregularities, including the allocation of vehicles to family members and friends of Plan Renove's board of directors of the program and affiliates, the import of trucks and forklifts that had nothing to do with public transportation and irregularities in the method of purchase. The Lalane audit served as base for the case against former Mejia administration officers.
According to a list supplied by the Dominican Municipal League (LMD), 39 false council members were able to obtain official passports in favor of themselves, wives, and children, which they used to travel to Spain, the United States, and Italy. Diario Libre reports that the list was provided to Assistant Attorney General Frank Soto, who is in charge of investigating the case. The AG's department is also checking police records to see whether these impostors have criminal backgrounds, as it has been suggested that some are US ex-convicts. LMD Secretary General, Amable Aristy Castro, has stated his willingness to cooperate with the AG department in the investigation.
Listin Diario reports that only three of the 39 impostors have been located as the rest have presumably already left the DR with false wives and children to Spain, Italy and other European nations. Among the three that have been located is Felix Julian Estrella Mejia, who returned from Genoa, Italy, after he could not take his plans to completion. The police are said to have confirmed that some of the impostors on the list had completed prison terms in the US and were later deported to the DR. The list includes Yeiris Manuel Morales Santos, Marisol Mendoza Melo, Mateo Farias Gomez, Jose Dolores Jerez Soto, Camilo Garcia Hilario, Jose Enrique Bautista Sanchez, Francisca del Carmen T. Gonzalez, Wilson Antonio Disla, Beatriz Castillo Valdez, Mirelis Josefina Guerrero, Magloides Amires Ledesma, Roselin Vargas Ramirez, Raquel Gomez Guerrero, Francisco Javier Revi Ortega, Jose Manuel Santos Florencio, Auris Ricardo Florentino Garcia, Freddy Hidalgo Cruz, Kelmi Perez Reyes, Luciano Almonte Cordero, Zenon Abreu Duran, Isidro Diaz Vasquez, Rufo Francisco Perdomo Segura, Vianny Fernando Feliz Ferreiras, Daysi Maria Mejia Fernandez, Ramon Alberto Cabral de la Cruz, Ramona Belen Bautista, Confesor Bautista Sanchez, Luz Maria Nunez Rosario, Romulo Santos, Yaniris Lopez Disla, Antonio Gomez, Jose Elenis Garcia Perez, Juan Epifanio Hernandez Restituyo, Maria Minerva de la Cruz Mosquea, Orlando Heriberto Santos Matias, Feliz Julian Estrella Mejia, Juan Carlos Bautista Torres, Rosa Elba Torres Florencio and Rolando Sarmiento Sanchez.
Seventeen out of 70 people who left illegally on a boat from Sosua, trying to reach Puerto Rico, disembarked at Cabeza de Toro, and returned home, whereas the remaining 53 travelers who allegedly tried to return via Nagua are lost at sea. Diario Libre reports that the Governor of Maria Trinidad Sanchez province, Jose Cosme, said that one of the travelers, Jose de la Cruz, had spoken to him by telephone indicating that bad weather was forcing the boat's crew to stop in Cabeza de Toro, where some of the passengers decided to stay.
According to Listin Diario, the total of missing persons is 56 and they left for Puerto Rico nine days ago in the midst of bad weather in the Atlantic Ocean. Authorities are searching by air, land and sea until they find the boat and the travelers. The group left on Sunday, 9 October 2005 from Playa La Ermita in Gaspar Hernandez and later went to Nagua to collect fuel. On Wednesday last week they landed in Cabeza de Toro, La Altagracia, when one of the passengers, who is three-months pregnant, started bleeding and her husband convinced the crew to make the stop. The boat was carrying people from La Vega, San Francisco de Macoris, Constanza, Moca, Boba, Puerto Rico a Pie, and Baoba del Pinal.
The police have arrested 115 out of a group of at least 175 people who were trying to leave the DR illegally from Miches to Puerto Rico. According to a report in Listin Diario, the group was caught in Cotui when they were traveling to Miches on board two buses. A third bus is still being sought by the Police. This arrest took place after intense intelligence work carried out by military and security departments. There are more than 20 women in the group, one of whom is pregnant. Although none of the detainees said how much they had paid for the aborted journey, it was said unofficially that they had paid between RD$25,000 and RD$35,000 each.
The Argentine Embassy has called on all Argentine citizens residing in the DR to vote in the congressional elections that will be held in their country on 23 October 2005, as reported in El Caribe. All residents, tourists or passengers in transit from Argentina will be able to vote at the Embassy located at 10 Maximo Gomez Avenue in Gazcue, from 8:00 am to 6:00 pm. A press release issued by the Embassy adds that Argentines residing in the country who have not officially changed address, or are in transit, must justify their absence from the voting process.
The Dominican Republic Education And Mentoring (DREAM) Project signed an accord with the Ministry of Education on 7 October 2005 that brings the internationally acclaimed teacher training program, International Step By Step, a George Soros initiative, to the Dominican Republic. Tricia Suriel, of the Dream Project says the agreement opens the doors for an unprecedented collaboration between the SEE, the Open Society Institute and DREAM. Since 1999, the DREAM Project has sought to improve educational opportunities for children living in rural areas and small communities of the north coast and north slope of the Central Mountain Range.
The DREAM Project will start construction on the two-storey facility next month in Cabarete, Puerto Plata on the north coast. The Teacher Training Center/School will serve as a model for basic education and the plan is to duplicate this model throughout the country. DREAM also had the honor of inducting Rose Rodriguez, senior advisor to New York Senator Hillary Clinton, to its executive board last Friday in New York City.
See http://www.dominicandream.org
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