Starting last Monday, the Dominican Republic has a new area code, 829. This code will join the famous 809 area code for all phones in the DR. The head of INDOTEL, the governing body for telecommunications, Jose Rafael Vargas, told reporters that the phone companies will assign the new areas code to new customers of both land lines and celular equipment. The two area codes are expected to last for twenty years worth of service.
The Chamber of Deputies Finance Committee has not been able to fulfill its commitment to report on the tax reform proposals because of differences of opinion between the deputies and government officials concerning the new taxes and the broadening of the existing tax bases. Meanwhile, Hoy reports that government officials have returned to the Presidential Palace to meet with the president of the Chamber of Deputies, Alfredo Pacheco to see if the differences could be ironed out. Sources said that there were some new proposals on the table but refused to enter into details. A new meeting will be held on Thursday.
The key issue seems to be the VAT tax and the proposal to extend its application to the most basic food items, such as sugar, coffee and cooking oils. Pacheco told reporters that he felt that the deputies would be able to come to some sort of agreement with the government officials since they are meeting informally on a daily basis, and exploring alternatives.
The Central American participants in the DR-CAFTA trade agreement have negotiated a deal that will provide them with compensation for the use of regional textiles instead of Asian textiles in the manufacture of clothes for the United States market. This is the result of a concession that was granted to the textile manufacturers of the state of North Carolina in order to lessen that state's resistance to the DR-CAFTA treaty. In the case of the Dominican Republic, this negotiation is still pending, according to some sources, but other sources close to the free zone sector are saying that the DR is currently engaged in its own negotiations on this issue.
As reported by Hoy, the Central American republics agreed to change the rule of origin for the textiles used in the production of coats and pants, and this means that they will not use cloth from Asia to make pockets for these garments. This, in turn, means an increase in cost, and this is the compensation that the Central American countries are looking for. The United States Trade Representative, Robert Portman, obtained the concession last April, when the White House was struggling to get the legislation approved by the US Congress. Elizabeth Dole, the Republican senator from North Carolina was the author of the proposal. Textile interests in North Carolina were against the use of Asian textiles in articles from the DR-CAFTA area. According to what was negotiated by the other members of the DR-CAFTA agreement, any garment that is produced using textiles, yarn or cotton from the region will enter the US at a 0% tariff rate from the start of 2006.
Another agreement that was reached will allow the importation of fibers or raw material that can be processed and later included as cloth in clothes destined for the US market. The deal also contemplates the use of cloth made in the US from raw materials obtained on the world market. In this case the tariffs will only be applied to the value added by the manufacturing nation.
Customs director Miguel Cocco has announced that his office was "tired of getting the intermediaries", and that they were now going after the "big fish", who finance contraband activities. The head of Customs said that he was unhappy with the Justice Department and described it as a "brake" on the efforts of his department to counter customs tax evasion. As examples, Cocco mentioned 39 cases that were duly backed up with evidence and confessions that produced a sentence of just two months of prison "for the most unfortunate of the lot." Cocco told reporters from El Caribe that, so far, the process of re-assessment of customs tariffs has generated RD$2.8 billion for the treasury. Cocco also said that he had worked out deals with Panama and the United States that facilitate the detection of contraband and lead to the apprehension of the people that finance the tax evasion schemes. The United States will facilitate a cross check of information and a similar agreement is in the works with Panama. Cocco pointed out that these are the two countries that send the largest contraband shipments, but this does not mean that local officials are involved in the operations, but probably a lack of controls, as in the DR. However, the cross-referencing of data will allow the Dominican authorities to reconstruct their business files and find out who paid for the merchandise in the first place.
Carlos Manuel Alvarez, the head of the Santiago Free Zone Association, told reporters that despite the crisis that is affecting the sector, there is a feeling that 2006, with the DR-CAFTA treaty in place, will see a recovery. The industrialist said that 2005 has been a hard year for the Dominican Republic's industrial free zones, and mainly for Santiago and the Cibao, where the principal industrial parks are located. The closure of businesses and the loss of jobs have been particularly hard for the free zones. Alvarez pointed out that the high cost of energy and high salaries for industrial workers are two issues that are affecting the growth of the free zones. With the DR-CAFTA agreement, Alvarez says that the 14,000 jobs that have been lost in Santiago may well be recovered, at least in part. This is good news for all who have small businesses near the industrial parks, since this has been a very difficult year with sales falling 50% to 60%.
Former Central Bank governor Luis Toral has told reporters from Listin Diario that the government will have an additional RD$51 billion in the next fiscal year as a result of a combination of factors, such as savings on payments of the foreign debt and the increase in cash flow due to the tax reform legislation. Toral said that he felt that the tax proposals, as they now stand, are not compatible with the Dominican reality since such a tax reform would seriously harm the people's economic situation. Toral is proposing a 10% flat tax on incomes of individuals and corporations as well as a 15-year tax moratorium for exporters. In his opinion such a tax package would assure an increase in businesses and jobs and increase workers' purchasing power at the same time. The former Central Bank official spoke at a meeting of the Dominican-Canadian Chamber of Commerce. In his arguments, Toral said that the government is saving RD$31 billion in payments on capital and interest on the foreign debt next year, and has another RD$20 billion coming in from taxes and therefore, "these hard figures show that the government has the capacity to handle expenses next year without creating the 13% Ad-Valorum tax nor broadening the tax base for the VAT tax."
In today's "Que se dice" (What's being said) column, the writer brings up an interesting point following yesterday's news that the Dominican Electoral Board (JCE) will be printing the voter registration rolls for next month's elections in Haiti. The writer says that some suspicions have arisen regarding the request made by the Haitian government to use the JCE technicians and equipment to print the voter registration rolls. Those who question the request point out that the magistrates of the Electoral Board must tread very carefully in order to avoid what, at first glance, seems to be an innocent and altruistic collaboration, becoming a "dangerous contamination" with unforeseeable consequences, with the blessing and collaboration, in this case particularly suspicious, of the UN and the OAS. The writer says that chief electoral magistrate, Luis Arias, has taken the request to be a show of the confidence, the credibility and the maturity that the JCE has demonstrated, but, at the same time, in keeping with his reputation as a "slippery character" he has taken the precaution of warning that before undertaking the request there are certain questions that must be cleared up. Among these is the question as to just which conditions will be imposed upon the printing of the lists. Who can guarantee that these lists will not "contaminate" the Dominican electoral process that is to be held next year? The writer concludes by wishing for the answers to the points raised by magistrate Arias, because these questions and all the others that might arise, have to be well answered before saying "yes" to the request made by our neighbors to the west.
The Dominican Conference of Bishops released its much-awaited Pastoral Letter dealing with the issues surrounding the Haitian presence in the Dominican Republic. Most of today's newspapers comment on the letter. Santiago Archbishop Ramon Benito de la Rosa y Carpio, the president of the council released the contents of the letter to reporters. In essence, the letter asks the Dominican authorities to apply the full extent of the law on those that smuggle and hire illegal Haitian immigrants. The immigration itself is labeled "a serious and growing problem." The initial reaction to the letter was positive, according to the El Caribe. Sonia Pierre, who heads the Dominican-Haitian Women's Movement, gave her approval, saying that the bishops spoke a lot of truths in the letter. The bishops describe the immigration from Haiti as having diverse causes, among which they mentioned the deteriorating political and economic situation in Haiti itself. The bishops also criticized the international pressure on the Dominican Republic to solve the Haitian issues on it own. A serious problem with such immigration is that the cultural differences between the two people could "generate continuing conflicts because of our complicities, inadmissible and corrupt, and because of the economic distortions created by the employment of illegal immigrants outside of the Labor Codes."
The bishops suggested the creation of a development program for regions on both sides of the frontier that includes education, health, sports and culture.
Diario Libre's Adriano Miguel Tejada comments in his editorial that the document will be known more for what it did not say, than for what it said. He mentions that the document failed to address that many excesses are committed in the name of defending the rights of Haitian citizens. "That chapter, that should not have been forgotten, is also part of the Haitian problem and could be creating new reasons for confrontation and division among Dominicans, because it confronts church pastors, that may have the best good will in the world, but that use the wrong methods, with their Dominican constituency, that who are also poor and Christians, and feel discriminated against.
While the first phase of the controversial mass transit system goes up for bidding within a month, those most affected by the project, the drivers, assistants and owners of vehicles that operate along Maximo Gomez Avenue are complaining. Among the complaints is that they have not received any specific information about the project itself. The unions are warning that if their needs are not considered they will begin a series of work stoppages next week at both the local and regional level, and this will affect 98% of the passengers from northern Santo Domingo. The FENATRANO union is asking minister Diandino Pena, the head of the metro project, to enter into an agreement which will allow the union to be integrated into the project once it begins to function. Reading between the lines, this means that the union seeks to run the metro operation with its personnel. The document sent to the media says that they will begin a "plan of action" if they are not listened to. Yesterday, Diandino Pena said that the first phase of the project would cost US$195 million and last for four years. Bids are to be tendered within a month.
The chief of the Justice Department, Francisco Dominguez Brito, has told the press that the people that want to eliminate former army Colonel Lidio Nin Terrero belong to the drug cartels responsible for distributing drugs in and out of the Dominican Republic. Dominguez Brito said that one of the alleged would-be murderers was Freddy Gaston Ramos, a hired killer used by the cartel to collect outstanding debts. Gaston Ramos is to be extradited to the United States in the next few hours on an indictment for homicide. According to the Attorney General, the life of accused drug trafficker Quirino Paulino Castillo was also in danger before he was extradited. Because of the threats to people like Nin Terrero, prisoner security has been beefed up at Najayo prison in San Cristobal. Two of the new measures are different visiting days and the secret transfer of prisoners without informing the prison director. Dominguez Brito was quite clear when he said that "powerful people want to kill Nin Terrero." He said that because both Quirino and Nin Terrero are key players in the case, their lives are at risk.
A significant delay in the construction of several important areas might well cause a further delay in the celebration of the National Sports Games that were scheduled to begin on 9 December. Sources close to the scene have told Hoy that the huge delays by the Public Works ministry are the main reason for this concern. While there may well be a political motivation behind the information, it is clear that several months ago there were several work groups set up, all of which are progressing very well, again, with the exception of the construction that is needed. The newspaper says that Minister of Public Works, Freddy Perez, is the least likely to fulfill his part. The Sports Ministry (SEDEFIR) has carried out the needed eliminations around the country, the National Housing Institute (INVI) is well advanced on the Sports Village that will house the athletes, the Potable Water Institute (INAPA) is nearly ready with the necessary water supplies, and the ceremonial aspects are now at rehearsal stage. However, the streets in Sabana Grande de Boya and Bayaguana, which are due to host part of the games, have not yet begun to be repaired. The bridge that connects the sports stadiums and the city of Monte Plata has not progressed much lately. Highways and other projects are just going too slowly, according to sources. Part of the problem seems to be money. The builders were expecting to receive RD$183 million last week and they got a check for just RD$70 million. There are two very serious opinions as to the games. One of them is that President Leonel Fernandez wants the games to be held in December. Nonetheless, sources in Monte Plata are claiming that a local, high-ranking official told a high-ranking government official that this date was not achievable. And this latter official did not want to take the message to the President and asked the SEDEFIR minister, Jay Payano to tell the President. However, Payano will not do this unless he has solid evidence that the 9 December date cannot be met. Reporter Kennedy Vargas says that this has produced a sort of stalemate, all because the facilities are not yet completed. In straight parlance, Vargas says that a postponement is imminent unless a hurry-up job with poor quality is the option taken.
The National Sports Games in the Dominican Republic have not served to develop sport. With few exceptions, in the past the multimillion investments to build sports installations have benefited only the contractors, moving on to become red elephants at a high cost to Dominican taxpayers. The Dominican Republic has an excess of sports installations where the games could be held, including many of the red elephant installations built for the 2003 Pan American Games in Santo Domingo that are grossly underutilized.
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