President Leonel Fernandez's first full day in Washington, DC yesterday was dominated by his meeting with International Monetary Fund (IMF) chairman Rodrigo Rato. During their talks, which lasted for almost one hour, President Fernandez announced that his government was sending a new tax reform package to Congress in order to obtain the resources necessary to reduce the current debt load, and in accordance with suggestions made by the IMF. Temistocles Montas, the President's Technical Secretary, told reporters that the issue would be taken up with Congress, "within the next few weeks." According to Montas, the idea is to get the legislation passed in time to be included in the 2007 budget. Montas also said that President Fernandez told chairman Rato that because last year's Congress did not ratify the government's tax reform proposals as they were presented, there was a RD$7 billion reduction in tax collection, and this was going to have to be "rectified", in the words of the President. Montas also commented that reforming the tax system is necessary in order to deal with the "profound" changes that will be brought on by the implementation of DR-CAFTA. Accordingly, President Fernandez asked Rato and other IMF staff to be patient with the country and asked the IMF for support, considering that the tax reform will affect some of the overall goals of the IMF's Stand-by agreement. With reforms to the tax system the government hopes to gain more stability in order to petition for more loans, and seeks to ease the burden placed on the country by increasing external debt.
According to what Montas told the press, Rodrigo Rato told the Dominican President that the current levels of debt, which are pegged at 41% of the country's GDP, are not sustainable and that the IMF would like to see these debts reduced to a 25% level. The IMF also wants the DR to obtain what they call a "primary surplus" (government accounts before debt payments) of at least 2.5%. Of course the electricity situation also came up in the talks, "since this is what most distorts the fiscal situation of the Dominican Republic". The IMF is strongly urging the total removal of the subsidy that will cost the government US$700 million or thereabouts this year. As a master "spin doctor", Montas told reporters that the government was counting on the electricity distribution companies, the EDEs, to increase their own cash flows through better collections and thus allow the government to reduce the subsidy gradually rather than have it removed all at once.
Fernandez told reporters that he would only talk to the press after his meeting with President George W. Bush, which takes place later today. His meeting with President Bush was moved back a day due to agenda issues.
The Dominican government has announced from Washington, D.C. that it will request a US$150 million loan from the Inter-American Development Bank (IDB). The money is to be used to continue the reform of the public sector and to buttress the education and health systems, as well as other social areas. According to the announcement by Finance Minister Vicente Bengoa, this loan would not fall under the IMF ceiling. The Dominican authorities plan to have the loan approved by December 2006 in order to receive the first US$50 million by the end of this year. One of the conditions for the loan package is that the Dominican Congress approves the 2007 budget in a timely fashion. To this end, President Fernandez will send a special message to Congress, urging priority passage of the budget.
Hoy newspaper is reporting that Congress has received the last batch of bills that need approval before the country can officially enter the DR-CAFTA agreement. Congress has received a package titled "Bills for Implementation," which included modifications to bills that need to be passed in order for the country to comply with the requirements for entrance into DR-CAFTA. The package was submitted by Vice-president Rafael Alburquerque and includes modifications to the bills on industrial property, and everything relating to the rights of brands and patents. As reported in Diario Libre, the proposals call for changes in Law 20-00, which concerns industrial property (patents and licenses). The package also suggests changes to the Penal Code, article 32, that will allow for prosecution of copyright or patent infringements as either public or private cases. The changes to Law 65-00 on intellectual property (copyrights) will bring it into line with the DR-CAFTA protocols. The General Law on Telecommunications will be modified to allow simultaneous administrative and judicial actions in cases of satellite signals violations. The much-debated Law 173, which covers agents and representatives of foreign companies, will be modified to except companies from the United States. The US Office of Trade Representatives has aided the government in this process. Several other laws will also be modified.
The Padre Juan Montalvo Center for Social Studies stated yesterday that although the country has experienced an 11.3% growth for the first nine months of the year, the public has yet to benefit from those gains, as there has been no change in their day-to day standard of living. The Montalvo Center says that there should be improved redistribution of the wealth generated by the economic gains that were announced by the Central Bank. "Continued low salaries, limited investment in health and education, and a regressive political system don't allow for talk of real economic well-being in the Dominican Republic.
PRD pre-presidential hopeful Miguel Vargas Maldonado, speaking to Hoy newspaper, echoed the thoughts of the Center, calling the Central Bank's claims of economic growth "fictitious" because according to him, it does not correspond with the reality that most Dominicans experience. He added that during the first two years of the PLD government the public has considerably lost its purchasing power.
Dominican industries are expressing their disapproval over the possibility of the DR signing a bilateral trade agreement with Taiwan, saying that the country doesn't possess the economic, social or political conditions to go ahead with such an agreement. According to El Caribe, the Dominican Republic Industrial Association (AIRD), the Haina Industries and Businesses Association (AIEH), the Herrera Industries Association (AEIH) and the Industrial Associations Federation (FAI) have sent Foreign Minister Carlos Morales Troncoso a note conveying their "serious concern" about such a free trade agreement. The associations point out that it would not be prudent to proceed with such a treaty when the effects of DR-CAFTA were as yet unknown. In addition, the business and industrial leaders are concerned that the current negotiations with the European Union are so complex that they will absorb the efforts of the Dominican negotiators for all of 2007. Finally, the associations point out that the industrialized nations do not take on more than two bilateral negotiations at one time, and that "the National Commission for Commercial negotiations has neither the budget nor the logistical wherewithal" to take on so many negotiations at once.
According to Diario Libre, last year the Dominican Republic exported US$5 million worth of goods to Taiwan, and Taiwan exported US$180 million in goods to the DR. Metals, tobacco products, coffee and cacao as well as other agricultural products are potential exports to the Taiwanese market. However, it appears that Dominican industrialists are not so keen on the idea of a free trade agreement with one of the "Asian tigers".
Spanish company Icasur is asking the Dominican government for US$611.7 million in compensation as a result of the cancellation of a contract with the Office of Public Works, for the right to give out the "revistas" for cars. The Dominican Congress rejected the Icasur contract as "damaging to the interests of the nation". In a letter delivered to the Dominican embassy in Spain, Icasur President Joaquin Alviz Victorio claims that the suit is for failure to comply with the contract. Diario Libre says that Alviz is basing his claims on clauses from the Agreement for the Reciprocal Protection and Promotion of Investment between Spain and the Dominican Republic (APRI) that was signed in 1995. Alviz says that three different companies had interests in performing the vehicular inspections, one of which was apparently the President's preferred option (International Business Trade), which he thought was strange, and that his proposed contract was better for the country than either of the other two offers.
According to Pension Funds Superintendent Persia Alvarez, 305,000 employees now qualify for housing financed by funds from the pension fund pool. These people earn more than two minimum salaries, or more than RD$10,000 per month. The superintendent's office has identified 15,252 employers with 305,512 employees who qualify for these home loans. The pension funds in the Dominican Republic have RD$31.55 billion in cash, and through the National Housing Bank (BNV), housing developments are being processed for sale to workers.
Professors and employees of the UASD University continued their strike yesterday, and although Hoy reports that they returned to work today, the unions are still considering an indefinite stoppage of all related activities if the administration doesn't consider their request and provide a reply by Monday. Strikers are urging the administration to rescind their health insurance contract with ARS Humano, which they say the University agreed to without holding a public bidding process. Dean Roberto Reyna explained that there is no way of rescinding the contract because it was signed in a legal manner, and that although there was no public bidding it was agreed with the consensus of the University Council. Unions will meet again on Monday, the deadline given to the University authorities to find a solution.
The Pro-Hygiene and Health Services Company (SEHISA) has agreed to accept the cancellation of the sanitation contract hastily given to them last week by the Mayor of Santo Domingo East, Juan de los Santos, and has also decided against taking legal action against the town council or the mayor. Though the contract has been rescinded, the Santo Domingo East municipality has to pay SEHISA US$156,000 for the disposal of more than six tons of garbage in the Duquesa landfill during the last eight days, as stipulated by the contract. Council member Juan Antonio Cruz Trifolio said that anyone who makes a mistake must be given the opportunity to correct it, and that the efforts by the mayor to rectify his mistakes have been sincere, so the public must wait to see the results. Trifolio did however warn Mayor de los Santos and said that from now on any public contracts should be put up for public bidding to avoid speculation about his actions.
El Caribe is reporting that the International Migration Organization (IMO) has signed a letter of intent with the international "Save the Children" organization, that will allow for the launch of an internet site whose main purpose will be to aid the search for disappeared Dominican emigrants. The joint effort will try to gather statistics on Dominicans who have disappeared inside the DR as well as Dominicans who have disappeared abroad and who may be victims of human trafficking or the sex trade. The website, www.dominicanosdesaparecidos.org, will be launched in January 2007. The project is part of the Latin-American Disappeared Persons Network (RLD), which is currently active in nine Latin American countries, and has aided in the reporting of 17,000 cases, and helped resolve 10,000.
According to El Caribe newspaper a total of 86 Dominicans, including two teenagers, have been repatriated to La Romana by US Coast Guards. One group was caught on Monday night trying to reach the neighboring Caribbean island of Puerto Rico. One of the teenagers, an unnamed 13-year old, said that his parents were not aware of his actions. The two young men were part of a group of 29 that left Nagua last Friday. Four of the small craft were captured at sea on Monday, off Cabo Engano on the eastern tip of the Dominican Republic by units of the United States Coast Guard. Later, early Tuesday morning, a Dominican Navy vessel spotted a very small craft called a "cayuco" (a native fishing canoe) with seven people on board. A Naval spokesman told reporters that they have picked up 87 small craft over the last two months. El Caribe says that some of the travelers were been deterred by their capture, and appeared to be willing to try again.
Attorney General Radhames Jimenez has ordered the arrest of a prison guard who shot a young prisoner in the back last June. The boy was one of a group of nine who tried to escape from the Najayo Juvenile Facility in San Cristobal. Jimenez also ordered an evaluation of the jailers at the facility. The Attorney General was emphatic when he stated that he "would not tolerate ill-treatment or humiliation of any prisoner."
The National Police have broken up a "fake consulate" that was operating in the Los Mina area of Santo Domingo. Diario Libre reports that two Dominicans and one Costa Rican are being charged with operating the fake consulate office that defrauded people seeking visas to the United States and Europe. The group was found to have seals, Dominican passports with expired visas, a plane ticket, a Florida driver's license, and a jeep in their possession.
Two men accused of stabbing journalist Johnny Martinez to death were sentenced to 30 years in jail, according to El Caribe newspaper. The murder occurred on 13 April of this year. Former police officers Octavio Perez and Antoni Trinidad were charged with Martinez's murder.
With the arrival of the Braemar at the Don Diego docks, the 2006-2007 cruise ship season started in Santo Domingo. The port is currently in the midst of a massive remodeling project and the welcome for yesterday's 599 visitors was hampered by a reception area stripped of furniture and with limited parking for tourist taxis and minivans. The tourists were met, however, with a traditional merengue band and dance troupe. The executives of the group that is now remodeling and operating the tourist docks are expecting 40 ships to tie up at the Don Diego-Sans Souci tourist docks this season.
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