President Leonel Fernandez is to address the nation today, and his speech will concentrate on explaining the government's proposed fiscal reform. Fernandez's comments will be closely scrutinized, partly because he has so far refused to comment on the subject, to avoid adding to all the speculation, and because many are anxious to find out the scope of the government's tax adjustments. The fiscal reform, which government spokespeople are preferring to spin as a "fiscal rectification" looks to garner an added RD$18 billion for next year, but many in the public and private sectors have, for the last month, argued that the government should instead cut public spending and increase fiscal efficiency, if they want to collect more money. It has already been announced that tax on alcohol and cigarettes will be increased, as will ITBIS (VAT), but so far there has been no word on what other reforms are in the offing. In today's Hoy newspaper, sausage and meat producers took out full-page advertisements urging the government against taxing their products, and many in the public and private sectors are asking that no taxes should be imposed on basic family goods. Yesterday, Hoy newspaper reported the IMF is recommending the country tax financial transactions, and a wide range of items that are exempt, including books and magazines, and pharmaceuticals, among other items.
Hoy also reported that the National Council for Private Business (CONEP) and the National Association for Young Entrepreneurs (ANJE) both say that increased taxes could harm productivity, especially in light of the country's eventual entry into DR-CAFTA. The production sector says that the government should reform public spending, reduce the government payroll, stop taking lavish trips. The private sector also favors eliminating the energy subsidies.
In a report in the Listin Diario yesterday, government trade negotiator, Julio Ortega Tous advocated for a reduction in taxes, rather than an increase. He says this has been proven in Ireland, Spain and even the US. He stressed that the authorities need to push aside what he describers as "accounting mentality" and replace this with a "dynamic mentality." Ortega believes the government will collect more revenues if it considerably reduces tariffs. "The solution is to reduce the tariff and get more to pay taxes," he writes. He recommends reducing ITBIS to 12%, down from 16%. Others, such as former president of the Association of Industries, Celso Marranzini, and economist Frederic Emam Zade have recommended a flat 10% ITBIS and 10% income tax rate to reduce tax evasion and increase collections.
Meanwhile, economist Victor Canto writes today in the Listin that the clear win in the congressional election shows that President Fernandez has the support of the people to truly implement a fiscal reform. He says that the past three reforms over three years have been but "patches" or short term solutions and mentions that the tire may soon burst.
It looks like the series of strikes at the UASD has come to an end for now, as it is being reported that the administration and the teachers' union have decided to wait out the 90-day trial period for the ARS Humano health insurance contract with the state-owned Banco de Reservas, according to El Caribe newspaper, and then rescind it. Though the teachers' union (Faprouasd) and the employees' union (Asodemu) have ratified the agreement, the University Council has 48 hours to either approve or reject the resolution. As part of the agreement, the teachers now have the right to choose their health insurance plan and have also decided to create their own plan called ARS-UASD. The agreement also stipulates that if after the 90-day trial period no ARS-UASD has been created, the University agrees to pay for the teachers' and employees' health services.
In more positive news for the oldest university in the Americas, yesterday President Leonel Fernandez inaugurated the UASD's newest extension campus in the city of Higuey, the Regional University Center of the East (CURE). The extension campus was built at a cost to the government of RD$542 million. Though chants supporting Fernandez's re-election could be heard from the crowd, the President asked them to be silent and continued with the ceremonies. During his speech, UASD Dean Roberto Reyna made no reference to the current problems at the University's main campus, preferring to speak instead about the birth of the "new" UASD.
Immigration officials have repatriated 410 Haitians who were in the country illegally. Immigration officials say that the raids to capture illegal immigrants in the country are carried out with the help of neighbors who report the presence of suspected illegal immigrants to the authorities. Most of those repatriated are women and children who beg on street corners.
Officials at the Drug Control Department (DNCD) have announced that they've broken up a "mafia" within their own department that was receiving weekly payoffs totaling RD$3 million. As reported in Diario Libre, the mafia, which was based at the DNCD's headquarters in Santo Domingo, would receive money from officials in the different DNCD divisions around the country in order to ensure impunity for acts committed during their tenure. Those accused in relation to these crimes are part of the 446 DNCD agents who have been dismissed since an initiative to clean up the drug agency began on 16 August. The situation has become alarming in some of the national divisions. The colonel in charge of the DNCD's Santo Domingo East division has been changed six times in 73 days, an average of a new colonel every 12 days. Puerto Plata and San Pedro de Macoris officials have been changed twice in both divisions. According to the report, the money was coming from divisions in Santo Domingo East, RD$500,000, San Francisco de Macoris RD$600,000, Puerto Plata RD$500,000, and Santiago RD$700,000, as well as fees coming in from other locations such as Barahona.
Major General Rafael Radhames Ramirez Ferreira is quoted in Listin Diario as saying that the country is "rife with drugs" and that there needs to be a restructuring of the DNCD in order to deal with the problem. Ramirez points to Villa Consuelo where, he says, it is not uncommon to see people openly cooking crack. Major General Ramirez said that in addition to the training of 100 new recent high school graduates as DNCD agents, they are also contemplating the creation of a drug detection dog training school in the country. He said that a dog can be trained locally for RD$7,000, while trained dogs imported from abroad cost US$10,000.
Ramirez explains that given the policing of the points of sale, vendors have resorted to delivery service to get their products out to the public.
The Listin Diario editorial today says that despite the present crack down on drugs, a problem still persists: "the most powerful dealers rely on persons of influence to secure benign decisions in the courts and then return to their flourishing businesses on the streets."
A man carrying a shipment of more than 20 kilos of either cocaine or heroin was apprehended as he tried to enter the country through Gregorio Luperon International Airport in Puerto Plata. The man, who tried to conceal the narcotics inside shoe boxes, was traveling to the DR from Venezuela with his three children, all minors, according to Listin Diario. Robinson Jesus Morris would have received US$15,000 for his role as the "mule" in the drug ring. Major General Rafael Radhames Ramirez of the Drug Control Department said that the drugs were distributed in two suitcases, in the soles of the shoes. The children's names were not released for legal reasons.
The BHD Bank is opening a new office branch, but this one will be in Panama, after having been granted an international license from the Panamanian banking authorities. According to Diario Libre, the BHD Bank has fulfilled all legal requirements set forth by Monetary and Financial law on investments and the opening of an entity abroad. The move by BHD looks to make the most of the growing business relationships offered by DR-CAFTA.
Representatives from 18 Spanish companies are in the country seeking to invest in the public and private sectors, and to strengthen ties between both countries. The investors from Madrid and Aviles have held a series of meetings with Dominican business leaders in order to increase their operations in the country. Mario Garcia Alvarez, president of the Spanish Chamber of Commerce, is quoted in El Caribe newspaper as saying that the Dominican Republic offers good conditions and an adequate climate for successful investment. During the meeting, which took place at the Hotel Embajador, investors said that they hoped to invest in food and beverage production, engineering services, nuclear energy and other sectors.
It is now known that the chief executive of Icasur, the company chosen by Public Works Minister Freddy Perez for offering motor vehicle inspection services is considered the top swindler on the International Police (Interpol) most wanted list. Listin Diario reports that Icasur's executive is now a fugitive from the Madrid Police. Alviz is wanted in El Salvador for his involvement in a multi-million dollar fraud scandal. Perez sent a multi-million contract to Congress that was criticized in the local press for being harmful to Dominican interests. Public pressure resulted in the Chamber of Deputies rejecting the contract that had been received from the Executive Branch. Shortly after, the company reportedly sued the Dominican government for US$611 million for the cancellation of the "revista" sticker contract on the grounds that this breached the Agreement for the Reciprocal Protection and Promotion of Investment between Spain and the DR (APRI) that was signed in 1995. This was the second time the contract was considered by the Dominican government since during the Hipolito Mejia administration, then Public Works Minister Miguel Vargas Maldonado had endorsed the contract that was sent to Congress for approval but did not move beyond the Senate.
Spanish newspapers report that Alviz can remain free, living in his homes in Madrid and Caceres because the 1997 extradition treaty between Spain and El Salvador excludes the extradition of Spanish nationals.
The rejected Icasur contract established that the Dominican state would have to compensate Icasur with up to 60% of the prices established per year for vehicles that had not been inspected. It also grants the company 20 years exclusive rights to inspect vehicles. If the state wanted to rescind the contract, it would have to compensate Icasur for what it would have charged the vehicles it would have inspected during this time frame. Icasur would collect RD$270 for each inspection and would pay the government RD$50. These prices would be adjusted.
True vehicle inspections are rare, and these serve primarily as an additional revenue-producer for the government.
PRD pre-presidential candidate Miguel Vargas Maldonado has announced that the party will take out a loan in order to cover the costs of holding the PRD national convention. Vargas Maldonado told Listin Diario that staging such an event requires economic resources because it requires additional funds. He also pointed out that while he was PRD Finance Minister the party always had to look for external funds for such events.
Senate president and PLD general secretary Reinaldo Pared Perez has warned PLD faction leaders to cease campaigning for Presidential candidates to represent the party at the next elections, especially during government inauguration ceremonies, because it is not the right time to do so. Speaking in Listin Diario, Pared Perez called on the PLD Political Committee to take a stand on the issue and asked them to penalize any person or group found engaging in these activities. Pared Perez's comments come as Danilo Medina is on the verge of launching his candidacy as the PLD's 2008 Presidential hopeful. Supporters of the President's re-election have made their presence felt during recent government events attended by President Leonel Fernandez, handing out flyers, pictures, and songs with Fernandez's re-election as the theme.
The Christmas Affairs Committee has announced that during the holiday season, when a large number of visitors enter the country, they plan to install a security system extending from Las Americas International Airport (AILA) to the Juan Bosch Bridge in Santo Domingo in order to protect visitors traveling to the city from the airport from potential attacks and car-jackings. AILA spokesperson Victor Minaya said that in order to ensure the physical safety of visitors to the country, the 15-km security system will include National Police and Armed Forces officials, and will be active 24 hours a day.
The government recently announced that Dominican expatriates can bring in duty free up to US$1,500 in gifts for friends and relatives this year.
22-year old Santo Domingo-born Hanley Ramirez of the Florida Marlins has won the Rookie of the Year award for the National League, edging out Ryan Zimmerman by just four points. Ramirez becomes the sixth Dominican player to win the prestigious award. Alfredo Griffin (BlueJays) was the first Dominican to win the award back in 1979, followed by Raul Mondesi (Dodgers 1994), Rafael Furcal (Braves 2000), Albert Pujols (Cardinals 2001) and Angel Berroa (Kansas 2003). Ramirez received the news while vacationing with his family in Santo Domingo.
In related baseball news Dominican-born Manny Acta has been appointed as manager of the Washington Nationals. Acta, who was previously with the New York Mets, is well respected in the baseball community. He worked as coach for Tigres del Licey from 2002-2004 and led the Dominican Republic to victory in the 2003 Caribbean Baseball Series. He becomes the fourth Dominican to be appointed to a managerial position in the Major Leagues.
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