Facing the real possibility of a congressional stalemate on the tax reform proposals, the President will send two budget proposals to Congress. The 2006 budget proposals will include the tax reform plan on the one hand and a different budget if the tax plan is stalled or defeated as it stands. The President's Minister for Technical Affairs, Temistocles Montas told reporters that the idea of two budget proposals came up during a meeting with the IMF team that is currently visiting the country as part of the review process. Montas told the reporters that the two budgets are easily identified: one has the tax reform proposals and the other does not. In fact, the second proposal will maintain the exchange commission tax. In such case, there will be serious implications facing the Dominican entry into the DR-CAFTA agreement, which is scheduled to begin in January 2006. He emphasized the fact that the legislators, upon seeing the twin proposals, will note that the government's income would be the same in either case.
According to local IMF representative Ousmene Jacques Mandeng, the current team visiting the Dominican Republic is worried that the prospects for economic growth are a possibility only if the structural changes suggested in the tax reform proposals are adopted. The team praised the country's advances in controlling inflation, but at the same time has expressed interest in the fact that the Congress needs to pass the tax package and integrate the proposals into the 2006 budget legislation. According to Diario Libre, Mandeng said that the IMF team would be meeting congressional leaders this next week to encourage passing of the tax legislations as well as other proposals. For the IMF inspection group, the Dominican Republic has taken very positive steps in the areas of banking supervision and regulation, and Mandeng said that he felt that this was the sector that had made the most progress under the IMF Stand-By agreement.
A new wave of blackouts is hitting residents of the Dominican Republic's larger cities. Many parts of Santiago experienced 18-hour power cuts and Santo Domingo suffered two major blackouts over the weekend. This comes after a period of relatively stable energy supplies, at least for the areas where the bill payment rate is high. According to Hoy newspaper, the power outages were caused by problems in the CDEEE's transmission lines. Last Wednesday, a failure in the 169,000-volt transmission link to the Haina generation facility shut down five substations and left the areas around the Maximo Gomez and Luperon Avenues in the dark. Late on Friday most of Santo Domingo was blacked out lasting into the early hours of Saturday morning, as EdeSur reported failures in the 138,000-volt and 69,000-volt lines from Haina. These failures resulted in seven sub-stations going dark. Santiago's La Informacion newspaper reports that the entire city is experiencing blackouts lasting between 16 and 18 hours, but the local distributor EdeNorte has not given reporters any explanation. The recent 5.8% price hike is provoking even more disgust among the clients.
With headlines proclaiming an energy deal, the reader is quickly taken back to reality as the only deal that has been struck involves the creation of yet another commission to find a solution to the financial crisis that is affecting the Dominican energy sector. El Caribe says that the government, the power generators and the distributors met with the President and his economic and energy teams in Casa de Campo, La Romana, for over ten hours in an attempt to find some sort of resolution to the energy and financial problems plaguing the energy sector. New increases in the cost of energy were discarded off the bat. During the meeting, the main points of agreement were the need to reduce energy losses along the transmission lines, the need to boost the collection rate and the need to study the debt that the CDEEE and the Edes have with the power generators. Another outcome of the meeting was a plan to reduce the government's subsidies to the power distributors, but details were not forthcoming. The main points of the more heated debates were concerning the possibility of further electric rate increases, the deficit for the sector as programmed by the IMF for 2006 and the construction of the two coal-fired generation facilities. According to Hoy, the deal that came out of the meeting is basically one whereby the President calls upon the electricity distributors to reduce losses, both technical (transmission) and non-technical (due to high operating costs) and increase collection from their customers. The newly named commission will meet with representatives of the Madrid Accords as well as the Independent Power Producers (IPPs) to see about lowering the cost of a kilowatt/hour.
For economist Markus Rodlauer and Alfred Schipke, the authors of a study for the International Monetary Fund called "Central America: World Integrations and Regional Cooperation", the 2003 banking crisis in the Dominican Republic is a "textbook example" of the high cost a country pays when the banking system operates without an adequate regulatory framework. Rodlauer says that the financial cost of the 2003 crisis initiated by the government's intervention in several banks, beginning with Baninter, was equivalent to 20% of the nation's GDP. The economist explains how the nation's public debt soared and the government had to use resources that were destined for important infrastructural works and for helping the poor in order to stem the crisis. The crisis also lowered the country's bond ratings due to the increased debt load. When the two authors were asked by congressional deputy Pelegrin Castillo why traders were having so much trouble obtaining commercial credits, the reply was that in every country where a crisis of this magnitude has taken place, the readjustments within the banking community take years to sort out. After several years of adjustments by both the business sector and the banks, loans will once more become available. The authors also said that a look at the figures for the years before the Dominican banking crisis of 2003 reveals that there seems to have been an excess of credit, and this, too, would contribute to credit restrictions at the present time.
The Dominican Republic has managed to obtain a major concession within the framework of the DR-CAFTA agreements. According to Arturo Peguero, the head of the Dominican Association of Free Zones (ADOZONA), the deal involves allowing Dominican manufacturers to locate labor intensive manufacturing procedures in Haiti, thereby cutting costs and allowing Dominican companies to remain competitive in the marketplace. Both countries would benefit and Peguero told reporters from Hoy that joint manufacturing would allow both nations to flourish. The ability to outsource using Haitian facilities will allow Dominican manufacturers to access the US market under the DR-CAFTA framework in more favorable pricing conditions. The initial proposal was made at the behest of ADOZONA, but the benefits are not just limited to free zone companies, but to any Dominican manufacturing company that wishes to outsource labor intensive processes. The added benefit is that all products would enter the US under DR-CAFTA, according to Peguero.
Another benefit of the outsourcing permit is that it should reduce the pressure on Haitians to migrate to the Dominican Republic in search of jobs.
Over 175 deputies, 32 senators and 151 mayors will be elected in May 2006, and there will be 960 municipal council members elected, as well. Nelson Gomez, the magistrate who heads the Central Electoral Board' Administrative Court, told reporters from Hoy that voters should check to see that they are duly registered in their respective districts and that new voters should get their voter registration cards ("cedulas") by 16 December. Gomez emphasized that the new electronic and physical controls will impede any attempts at fraudulent voting. The JCE is spending RD$38 million on new materials for printing and preparing the needed "cedulas". The Administrative Court of the JCE has also spent US$300,000 on new computers and CDs to strengthen the Civil Registry's efforts. Also as part of the work being carried out by his division of the JCE, Gomez said that a total of 42 local election boards were restructured and 17 new ones established. In an effort to avoid false birth certificates, the magistrate revealed that his teams are now establishing a new system that will require an infant's footprint and the fingerprints for any child 14 or older, as in the United States.
As part of the scope of the forthcoming elections, El Caribe reports that over 1000 people are vying for seats on the Santo Domingo municipal council and other municipalities in the National District. To make things difficult for those wishing to enter the fray, the newspaper reports that 90% of those currently holding office are going to try for re-election. There are only 121 council seats available in the National District. In what the paper calls the "frenzy" for a seat in Congress, the PLD has over 4,000 aspiring candidates and the PRD has 2,800 potential public servants.
The former magistrate for the Civil Registry office in Estabania, Azua, was found guilty and sentenced to five years incarceration and payment of a RD$200,000 fine to the Central Electoral Board for the crime of falsifying public documents. The accused had forged birth certificates, marriage certificates, divorces, death certificates and late birth notifications. The village of Estabania is one of the sites where bogus city council members could get the necessary documents to obtain official passports with visas to travel to Europe. These were issued to "supposed" husbands, wives or children of "supposed" members of the city council. The Central Electoral Board (JCE) was the plaintiff in the case against former registry officer Robert Bienvenido Sanchez. Inspectors working for the JCE had investigated and established that the official had committed a whole series of "irregularities" in this case. Judge Rafael Wilson Abreu of the First Penal Chamber of the Court of the First Instance in the district of Azua found the evidence sufficient to impose sentence, and order an arrest and imprisonment order for the accused.
Former colonel Lidio Nin Terrero and his cousin, Tirso Cuevas Nin were taken from their cells at Najayo Prison and transferred to holding cells at the National Drug Control (DNCD) headquarters to await their extradition to the United States of America. Both men were moved under tight security and equipped with helmets and bulletproof jackets. The men are wanted in the Court for the Southern District of New York in connection with the case against Quirino Paulino Castillo. This case involves the 1,387 kilograms of cocaine that were on board the truck driven by Cuevas Nin and escorted by Nin Terrero when it was seized by DNCD agents in Santo Domingo. While Nin Terrero seemed resigned to his fate, the Listin Diario says that Cuevas Nin protested his innocence by saying that he was just a "poor driver," as they were taken away from Najayo Prison. At the DNCD headquarters the two men will await the Presidential decree that will allow their handover to DEA agents waiting to take them to New York.
As part of the continuing efforts to improve life for people in rural areas, the "Centro de Educacion para la Salud Integral" (ILAC) brought in 25 doctors from Italy and the United States to assist hundreds of rural residents with major health problems. During the latest effort, the doctors operated on over 100 people with hernias. During the medical sessions that took place in Mao and the mountainous regions of the Cordillera Central, over 2,400 people were seen by the doctors. During the first stage, 1300 people came to be examined, and during the second stage 1,500 more were seen. For two months, teams of urologists, ophthalmologists, cardiologists and pediatricians have offered their services to treat patients in the poorest areas. As emphasized by Radhames Pena, one of the conditions for receiving an operation is that the person does not have economic resources. Besides assisting the patients themselves, the foreign medical teams also advised local medical staff on the latest techniques. The University Regional Hospital Cabral y Baez and the Estrella Urena Social Security Hospital are two of the centers that are most involved in the program.
The Association of Dominican Beer Manufacturers (Adoface) announced that the sector had contributed the astronomical sum of RD$4.571 billion pesos in taxes during the first nine months of the year. These taxes are part of the Selective Consumer Tax (ISC) levied on all alcoholic drinks. The amount represents a 68% increase over the amount paid to the government during the first nine months of 2004, and it is 75% of all the money collected through the ISC tax on alcoholic beverages, and fully 25% of all ISC taxes collected. As beer has just 5% alcoholic content, it represents 40% of all the alcohol consumed in the Dominican Republic.
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