The tax reform proposal continues to dominate the news, with the IMF, the United States Department of Commerce, the PRD and the government all expressing opinions and demands. Jose Fajgenbaum, the IMF representative in the DR, has asked Congress not to change the legislation that the government has submitted for the tax reforms program. He said that any changes would reduce the Executive Branch's ability to carry out "programs and force the government to cut spending on programs that are needed at this time". In response, Alfredo Pacheco, the president of the Chamber of Deputies, said that the chamber is always willing to listen to new proposals and work towards reconciling differences of opinion. Fajgenbaum told reporters that the "reform will not create new taxes, it will simply substitute one tax for another." Fajgenbaum and Temistocles Montas were speaking to reporters after a long meeting with the government's economic team. Montas, the chief of the economic team, told reporters that the IMF team is looking at the third Letter of Intent and had reviewed all aspects of the Dominican economy, according to El Caribe. Over at the Congress, Pacheco was faced with statements by the government and the IMF that said that the RD$7.0 billion in tax cuts made by the Chamber of Deputies would create fiscal instability and serious problems for the government next year. Marino Collante, who heads the Chamber's Finance Committee told Hoy reporters that all the figures that have been published in the newspapers are "speculations", but Pacheco reaffirmed the RD$7.0 billion number. The Chamber of Deputies leader had told the press that only RD$25.3 billion of the proposed RD$32 billion would be approved during tomorrow's session. The substantial reduction was due to the removal of several basic commodities from the VAT list. (See DR1 news for Friday, 18 November 2005). In his statements, Marino Collante said that he was confident that the tax reform bill would be passed in time for the Dominican Republic to enter the DR-CAFTA agreement. Pacheco emphasized that even the RD$25.3 billion tax deal meant a lot of sacrifices for many sectors of the population.
Making things more "interesting" was the report from the PRD economic team, which differed greatly from what government sources were reporting. As reported in Hoy newspaper, the PRD's calculations show that the government says, for example, that the removal of the exchange commission tax - a 13% tax on the dollars used to purchase imports - will cost the treasury RD$21.0 billion in income. The PRD figures say that the real loss is closer to RD$18.9 billion, and so on down the line of projected government tax losses with the DR-CAFTA program. The government figure of RD$32.0 billion is, according to the PRD economic team, much closer to RD$22.3 billion. The PRD economic team of Jaime Aristy Escuder, Andres Dauhajre, Rafael Espinal, Arturo Martinez Moya, Francisco Guerrero Prats and Jose Lois Malkum told Hoy reporters that the government was inflating the estimated tax losses, and concentrating its efforts on income instead of looking at spending cuts. Finally, today's Listin Diario reports that the United States Department of Commerce has voiced objections to the proposed 2% pre-import tax. This tax is part of the tax reform proposals. The Department of Commerce says that the tax is a violation of articles II and III of that General Agreement on Taxes and Tariffs (GATT), as well in violation of articles 3 and 3.10 of the DR-CAFTA agreement. According to "sources", the Department of Commerce will cite law 109-53, which sets out the requirements for the implementation of the DR-CAFTA agreement, and recommend to President George W. Bush that the Dominican Republic is failing to fulfill its part if such a tax is implemented.
The Papal Nuncio for the Dominican Republic, Bishop Timothy Broglio, says that the international community has washed its hands of the Haitian situation as if it were Pontius Pilate. He said that the disintegration of the Haitian state should not fall on the shoulders of the Dominican Republic, and that the country could "not support the illegal entry" of so many Haitians fleeing "in desperation from the neighboring country." The Vatican ambassador said that the Dominican economy is being critically affected by the entry of so many Haitians. At the same time, the Papal delegate told Hoy reporters that while there is a difference between those Haitians that come of their own volition and those that are invited to work here, the results are the same for the country. He pointed out that the Holy See has asked wealthy nations to come to the aid of Haiti, but the requests have not had much success. Because the Dominican Republic cannot solve the problems of Haiti by itself, the Catholic Church feels that an international effort is needed, since their main concern is the welfare of the poor.
A story in yesterday's New York Times points out some of the difficulties faced by Haitian immigrant workers. The story recounts the violence that has plagued some areas in the northwest of the Dominican Republic ever since a robbery in Hatillo Palma left a woman dead and her husband wounded. The reporter, Ginger Thompson, also tells of the problems that Father Pedro Ruquoy had been facing prior to his departure from the DR last week. For full details of the story see: http://www.nytimes.com/2005/11/20/international/americas/20dominican.html.
Government intervention in private conversations over the telephone in the name of "national security" is on the increase, and equipment for listening in on phone conversations is becoming a lucrative business. According to El Caribe, it was Minu Torres, while serving as Administrative Minister for the Presidency, who complained that her telephone was being tapped. She made famous the phrase "it's taken care of," in reference to the solution of the problem by state security organizations. Former President Hipolito Mejia said in 1999 that his phones were being tapped, while he was campaigning for the presidency. He said that it was "sectors from the opposition (to his candidacy)" which were tapping his phones. During Mejia's own administration journalist Manuel Jimenez accused Guido Gomez Mazara, the controversial former Presidential legal advisor, of tapping his phones and showed reporters a tape that was made of a conversation he and journalist Orlando Gil had had on his telephone. In November 2002 television commentator Cesar Medina told his viewers that former colonel Pedro Julio "Pepe" Goico had purchased millions of dollars worth of communications gear capable of listening to cell phone conversations. According to the article, the business of intercepting phone conversations is highly profitable and has been growing over the past decades. The paper says that it is generating millions of pesos for the purveyors of such services. While high-profile personalities are frequently targeted for spying, another market is industrial espionage as well as the ever-present marital infidelity. Telephone intercepts by state security organizations were first allowed under Resolution 091-02, which allows the DNI and the DNCD to carry out surveillance on private phone conversations in the interest of "national security." In the face of a huge public outcry, the resolution was dropped in November of '02. Just what protection does the consumer have? Law 153-98 is the Telecommunications Law and it says in Article II that "anyone who incurs the serious infraction of illegally intercepting telephone communications will receive an administrative punishment by the Telecommunications Institute (INFOTEL)." This is the same as a slap on the wrist. Resolution 36-00 allows a judge to authorize telephone intercepts, and this includes the state security units. The Supreme Court told the magistrates of the Courts of Instruction just what the authorizations should cover. Article 1.2 of the Resolution calls for the different companies to have a recording that warns of the possibility that the conversation will be heard by third parties. There are several other Resolutions, like the 31-01 and the 29-01 that deal with intercepts and the importation of the equipment needed to intercept phone conversations. Finally there is Law 24-97 which punishes those that violate the privacy of others.
According to figures from the Central Bank, the Dominican peso can now purchase 38.1% more now, compared to a year ago. This is the result of a much lower inflation rate, which has fallen from 32.88% a year ago to just 7.31% for 2005. In other words, a person with a salary of RD$20,000 per month in 2004 was losing RD$6,576 to inflation. In 2005 the same salary lost just RD$1,462, a saving of RD$5,114. While many products are, indeed, less expensive, there seems to be a perception on the streets that prices remain at their previous highs. This may be attributed in part to less cash flowing in the general economy.
The black market, the illegal sale of goods and services at prices that the market will bear, is doing fine in the Dominican Republic. According to the latest report in Listin Diario, total sales by black marketeers are close to RD$50 million a year. Their business is carried out far from the law, without scruples and always on the lookout for a quick kill. The black market works every day. Concert promoters, baseball officials and other entrepreneurs try and put a stop to the market, but to little avail, and, in fact, the black market is often supplied with tickets from the promoters themselves. There is a lot of action and few faces. The market works for movie houses, baseball games, sporting events or music festivals. The finely tuned "nose" of the business always looks for a fresh event to work. Dollars, short-term usury loans, check cashing, food coupon exchange are all part of the market and interest rates or "fees" are murderously high.
According to the World Bank, as much as 13.2% of the Dominican Republic's Gross Domestic Product comes from remittances from overseas. In the case of Haiti, the figure is 24% of GDP. In the Dominican case, 96% of the remittance money is channeled through official mechanisms, such as registered exchange houses or commercial banks.
The Central Bank of the Dominican Republic and the office of the Superintendent of Banks have refused a request made by Listin Diario under the Freedom of Information Law requesting information on the progress of the audit being carried out at Banco de Progreso following the dismissal of its former president, Pedro A. Castillo. The official institutions classified the requested information as "information that could affect the functioning of the financial or banking system." The Central Bank denied that it was within the scope of the Freedom of Information Law as covered by the Financial and Monetary Law. Listin Diario had asked the heads of both institutions whether they were participating in the banking audits.
Using a credit card is still very expensive in spite of the fact that bank interest rates have fallen to their lowest levels in decades. The average APR is nearly 75%, with the monthly rate on unpaid balances at 6.20%, nearly the same rate as two years ago when the rate hit 6.40% per month. However, two years ago, bank interest was at 30% APR for personal loans and as much as 26% for mortgages. As of 11 November this year, personal loans are at 23.47% and mortgage loans are at 19.1%, and preferential loans for class A clients are 16.11%. According to Central Bank figures there are nearly three quarters of a million credit card holders in the Dominican Republic, down almost half a million from the 2003 figure. In spite of the decrease in the number of plastic users, the overall amount of money involved in credit card transactions has increased, as reported by the Cardnet credit agency.
The Dominican Navy has rescued 14 people from the waters of the Caribbean Sea. These people were attempting an illegal voyage to Puerto Rico when their vessel was disabled between the islands of Catalina and La Saona, off the southeast coast of the Dominican Republic. The Dominican Navy was assisted by units of the United States Coast Guard, according to colonel Benny Batista of the DR Navy. The eleven men and three women were taken to the hospital in La Romana where they were treated for dehydration. Two of the travelers were hospitalized and the remaining 12 were sent to Santo Domingo for interrogation by Naval Intelligence.
The Chief of Police, Bernardo Santana Paez, announced that he would seek the addition of 2,000 more men and women for the National Police in his 2006 budget. Santana Paez told reporters that these agents would help in the battle against crime. As he came out of his meeting with budget officials at the Presidential Palace, the police chief said that his team had recovered 1,040 police officers who had been working for private entities, and that these would now be used for foot patrols. He added that there would be no problem getting 25,000 police out onto the streets for the Safe Christmas program. According to El Caribe there were 25,000 police agents working the streets as part of that program this past week. However, Hoy newspaper reported that there were 16,000 agents on patrol, and that many of the cops who will be patrolling in December are administrative staff who will be assigned to the streets.
What is sold as "whole wheat" bread may not have any whole wheat. At least this is what Hoy is reporting in Sunday's edition. The National Director of Systems and Rules (the Dominican weights and measures control office) DIGENOR, revealed that there is a fake whole wheat bread on the market and that very few bakeries bake real whole wheat bread. According to their report, DIGENOR says that the agency is working on a set of rules that will govern the bakeries that say they are making whole wheat bread. According to DIGENOR head Julio Santana de Leon, what the bakeries are doing is using "saved bread or pseudo-whole wheat", even adding this to white flour. According to the DIGENOR analysis, there is no wheat germ or minerals in this sort of bread.
The gateway to Santo Domingo's Chinatown got its start yesterday when Mayor Roberto Salcedo did the honors at the start-up ceremony. The gateway is located at the intersection between Duarte and Mexico avenues in downtown Santo Domingo. Chinese "lions" danced in the street as the five million-peso project got underway. The Taiwanese government has donated US$40,000 for the project. Rosa Ng Baez, president of the "Flor para Todos" (Flowers for All) Foundation, told reporters and officials present that the gateway would be built in typical Chinese architectural style, serving as the doorway to a growth of tourism and contact with Chinese culture.
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