The daily news will not be updated on Monday, 6 November, which is a national holiday. The DR will be celebrating, Constitution Day. News of the weekend and Monday itself will be compiled for the Tuesday, 7 November issue. Any major breaking news will be posted on the DR1 Forums at http://www.dr1.com/forums that are updated 24/7.
President Leonel Fernandez said yesterday that the Dominican Republic plans to increase trade relations with the US state of Florida, especially in the areas of technology and telecommunications. Fernandez, speaking at the Dominican Cyber Park, which is operated by Miami-based Terremark Worldwide, reminded the public that the Dominican Republic is Florida's second largest trading partner after Brazil, and that 90% of Dominican trade with the United States is with Florida.
The Senate approved, in its second reading, the bills that pave the way for the implementation of the DR-CAFTA treaty. The next step is for the Senate to send the bills to the Chamber of Deputies for their approval. Once approved by the legislators, the President will need to sign them into law. Politicians are hoping for the document to be approved before 15 December. US officials have said that if the country is able to pass the remaining bills before 15 November, there is a possibility that the trade agreement could come into effect on 30 November or at the beginning of December.
President Leonel Fernandez defended the fiscal "rectification" that was announced recently, and urged the public to remain calm and be patient as the process develops. The President, quoted in Listin Diario, also has criticized the "constant negative chatter" about the rectification without anyone really knowing the details of the reform, and said that once the reform was presented to the public, if people want to criticize it, then they can. The President believes that all the negativity is just another way for the opposition to make the government look bad. Diario Libre quotes Fernandez as saying that the reform will provide the country with much-needed stability and would help sustain economic growth and the creation of jobs once DR-CAFTA comes into effect. Supporting the reform, and defending the timely payment of foreign debt commitments, was Andy Wolfe, technical chief of the IMF mission in the country, who said, "The IMF does not intend to provoke any problems in the country." Wolfe made his comments yesterday as he and his colleagues explained the details of the fiscal reform to representatives of the DR's private and public sectors.
President Fernandez has submitted a bill for approval by the Chamber of Deputies that would impose a custodial sentence and a fine on anyone in the public or private sector who is found bribing or accepting a bribe in exchange for beneficial treatment. The passed bill, required for the country's entry into DR-CAFTA, is a big move for the Dominican Republic as it would be the first law of its kind in the country and would provide a structure that could help combat corruption in business and trade. The law stipulates two to five years of jail time for anyone convicted, and a minimum fine equal to at least 50 of the convicted person's salary payments, according to Diario Libre.
Trying to calm fears and misinformation surrounding the proposed fiscal reform, the IMF mission in the DR held a meeting yesterday with members of public and private sector groups to explain the details of the fiscal reform. According to the IMF team, the reform, carried out together with a reduction in government spending, could save the government RD$36 billion, or 3% of the GDP. But there is a catch, in that money would not be used for education or health. Instead it will be used to pay off the government's loan to the IMF, which currently makes up 44% of the country's total GDP. The IMF wants to see this figure dropping to 30% of the total GDP by 2016. According to Listin Diario, Andy Wolfe, chief of the IMF mission in the country said that for such a reform to take place, the ITBIS (VAT) base, which is currently at 16%, would have to be raised. He defended this move by saying that the international average for such a tax is 18%, in other words, VAT in the DR is relatively low. Wolfe went on to say that there should be a reform of the tax imposed on alcohol consumption, concluding that along with a few more increases in taxes, which he did not mention, this could give the government an extra RD$18 billion. In his address, Wolfe said that the government should definitely stop subsidizing propane gas (GLP) and the electricity sector, commenting that the latter is the government's Achilles heel. Cardinal Nicolas de Jesus Lopez Rodriguez, in an interview with El Caribe newspaper, said that at present the country has no other choice but to submit to the IMF demands. The Cardinal said that the government got the country into this problem and that there is no other choice now but to go ahead with it.
Presidency Technical Minister Temistocles Montas has clarified that the budget for 2007 will be RD$205 billion derived from internal resources and that depending on the amounts - yet unknown - of external resources, the budget could reach RD$240 billion. He estimates that RD$187 billion for the budget will come from internal revenues and that RD$18 billion will come from the fiscal reform. Montas said that this total does not include external funds towards the budget that could amount to around RD$35 billion. Unfortunately, this situation will make it impossible for the country to reach its goal of ending the year with a zero deficit and an equal fiscal balance. Montas also reports that the government will save a reported RD$9.7 billion from the reduction of subsidies on electricity and propane gas. Montas, quoted in Diario Libre, said that there would be a US$200 million (RD$6.7 billion) reduction in the electricity subsidy, which will be US$450 million in 2007, and a savings of RD$3 billion from the GLP subsidy, for total savings of RD$9.7 billion.
Writing in Clave Digital, Ana Mitila Lora says that in the face of the fiscal reform that is about to take place, the government should instead look to cut costs by doing away with unnecessary bureaucracies that serve no real purpose. In her article Lora cites the example of how the Commission for Business Reform (CREP) should have been dissolved six years ago, but instead continued to employ 68 people at a cost of RD$2 million per month. Lora also points out the case of the National Sugar Council (CEA) which employs 1,119 people at a monthly cost of RD$13,861,000. The most glaring example, Lora says, is the State Run Electric Companies (CDEEE), which replaced the CDE in order to provide a more efficient service, but this has not happened. CDE operated on a total payroll of 6,000 employees as opposed to the current CDEEE payroll of 7,813 in total. Lora asserts that the "paternalistic" government spends an annual RD$12.5 billion that could be saved if it exercised more austerity, which is only RD$6 billion less than the estimated amount the government will receive next year from the fiscal reform. So why not cut spending instead of taking out more loans and over-taxing the public? Because, according to Andy Wolfe, then you would throw thousands of people out onto the streets with no jobs. It just depends which side of the argument you are on. Adding to Lora's suggestions are those made by businesspeople and industrialists who say that the government would save RD$23 million if they were to axe the subsidy on electricity, GLP, and make a few other minor fiscal adjustments. At a meeting titled "Thinking about 2007" members from business associations CONEP, ANJE and AIRD met to discuss other options to the reform. Reducing government spending by RD$12 billion and avoiding fiscal evasion could save the government close to RD$4 billion more.
In her column on 2 November in El Caribe, lawyer Marisol Vicens repeats her belief that politics continues to prevail before priorities in the DR. She points out that the electricity crisis and the quasi-fiscal deficit should have been the Fernandez government's priorities, but that instead the government assigned priority to the construction of a metro line. She points out that two tax adjustments in its first two years have not been enough for the Fernandez government, which has not demonstrated any will to fulfill its commitment to austerity in spending. She reminds readers that the payroll has not been reduced: on the contrary, foreign service appointments are numerous for reasons of patronage. She also mentions that the old system of revenue sharing instead of wages for consuls continues, and that spending on government advertising is alarmingly high. She says there has not been a single initiative by the government to eliminate duplication and to streamline the government. Instead, the priority continues to be about giving jobs to party members. She mentions that the Congressional campaign opened the spending floodgates in all government departments to ensure a win.
She goes on to comment that the excuse for last year's tax adjustment was that it was needed in order to compensate for the county's entry into DR-CAFTA - that has not yet happened.
She laments the fact that given our idiosyncrasy, from mid 2007 the greatest priority will be the 2008 presidential campaign, and forecasts that we will spend all our energies and public funds on this. "As long as party politics continues to be the deciding factor in investments, actions and principal decisions by each government, the national priorities will remain at the starting blocks. Every day the more desperate citizens are less willing to bear the heavy tax burdens, from which it receives very little back. What is needed is a smaller and less expensive government. Are our authorities not capable of understanding this?," she concludes.
Engineer Leonel Carrasco, sub-director of evaluation and communications for OPRET (the government's transport reorganization office in charge of the construction of the Metro) attributed geologist Osiris de Leon's comments yesterday to a lack of information about the real reason why construction on the Metro has been stopped. In yesterday's Diario Libre, de Leon said that the reason the Metro construction was stopped was because there have been landslides and cave-ins on the project site, and not because an excavation machine was damaged, as had been reported. Carrasco said that de Leon is wrong about stoppages at two points of the metro line, in front of APEC University and from Mozart to Jimenez Moya, and that each point only needs 400 and 300 meters to be dug with the excavation equipment. Carrasco also said that feasibility and geo-technical studies had in fact been conducted before embarking on the Metro construction, and that as it happens, Geoconsult was one of the companies that carried out this work.
The Armed Forces Minister is denying reports that a US military base is being built in the DR, as was reported in many news and media outlets yesterday, and said that doing so would harm the country's sovereignty. Rear Admiral Hector Lizardo Jorge told Listin Diario that the confusion probably arose when Lieutenant General Ramon Aquino Garcia attended the new US Southern Command chief's appointment ceremony, where increased cooperation between the two nations was discussed. Jorge says that the installation of equipment donated by the US at the Joint Operations Center at the Ministry of Armed Forces headquarters could have also contributed to the confusion.
The former public works minister during the Hipolito Mejia administration, Miguel Vargas Maldonado continues to make news in Spain. This week's edition of Dominican online news service, Clave Digital, carries the full text of Madrid newspaper El Mundo coverage on Vargas Maldonado's business ties with arrested Marbella businessmen, Carlos Sanchez and Andres Leitor. Shared tourism investments mentioned include the Hotel Hispaniola, Punta Perla residential development in the Punta Cana area and ownership of three million square meters of property in the National Park of the East in front of Palmilla beach. Likewise, Interviu, the Spanish news magazine, this week carries the Marbella corruption story and ties of Miguel Vargas Maldonado to the accused in Spain, as its cover story. Vargas Maldonado seeks to win the PRD party candidacy in the primary set for 8 January 2007 and announced the official launching of his candidacy campaign on 4 November.
The National Drug Control Department (DNCD) announced the first arrest of a drug deliveryman. As reported in El Caribe, Jonathan Perez Acevedo was arrested at Calle Jose Maria Heredia corner Independencia, Gazcue when he was on his way to make the deliveries. The DNCD said they intercepted 124 calls on Thursday night and early morning Friday for drug deliveries, most in the Gazcue and Bella Vista areas. Prior to the arrest, DNCD agents observed how he sold cocaine to at last five different persons in "establishments of the Malecon." At the time of his arrest he had 153 portions of crack on him. His car was fitted with two propane gas tanks.
Diario Libre reports that Jose Esteban Martinez Pineda, accused of being part of a drug and human trafficking cartel connected to a Colombian ring, has been arrested and is being charged with killing three people and wounding army captain Lizandro Francisco Garcia on 6 August. Martinez didn't go down easily and it is reported that as he was being taken to prison he tried to flee his captors and was shot and wounded in both legs.
"Modern Marvels - Tobacco" will air on Wednesday, 8 November at 10pm with scenes and interviews filmed in the DR. "Modern Marvels" is the leading ratings winner for the History Channel and their longest-running show.
"Modern Marvels: Tobacco" explores the rich history of the crop, which was first discovered around 18,000 years ago. It filmed scenes in the DR at the Fuente cigar plantation and factory, where nearly 50 million cigars are produced each year. According to CEO Carlos Fuente Jr., "our cigars are a family tradition and a heritage". Established by his grandfather Arturo, in Cuba over 100 years ago, the company moved to the DR to continue its tradition.
Today, Fuente Cigars is the only family-owned and operated company left in the cigar industry. On the occasion of the tenth anniversary of the Fuente OpusX cigar, the family's story is told in the documentary "The Fuente Family-An American Dream" by filmmaker James Orr and graced by an original soundtrack by Arturo Sandoval.
Recognizing that "tobacco is, at the very best, a contradictory crop," the show will also look into the health concerns, the worldwide economic impact, religious aspects and the overall history of how tobacco became widespread and (today) depending on age, is unlawful and prohibited.
Despite smoking bans, health issues and laws, the image of the cigar is still that of a "winner" (e.g. Will Smith in "Independence Day" or Pink Floyd's "Have A Cigar" classic depict that status). Fuente cigars sell out every year and are considered to be the best hand-rolled cigars available. Last year, the groundbreaking Fuente Opus X cigar, celebrating its 10th anniversary, was named the #1 cigar for 2005 by Cigar Aficionado.
Milly Quezada and Michel Camilo proudly represented the Dominican Republic last night at the 7th annual Latin Grammy awards ceremony. Quezada won the award for Best Merengue Album with "MQ" and Camilo won the award for Best Classical Music Album with his recording of Rhapsody in Blue." As well as winning her award, Quezada lit up the stage by dancing with New York City Mayor Michael Bloomberg. Juan Luis Guerra was also at the event, and although he did not win an award, he performed his duet with Mexican group Mana. To complete the celebrations, the Fuente cigar company distributed 150 Forbidden X cigars (sold at Casa Fuente in Las Vegas for US$120 each) to the Latin Grammy celeb bags.
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