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Daily News - Wednesday, 28 May 2008

Leonel off to C.A. and Europe
President Leonel Fernandez is leaving for El Salvador today, to attend a meeting of the Central American Integration System (SICA). The meeting will deal with issues relating to securing food supplies, climate change and bio-energy. On the agenda are also talks that could lead to start of negotiations for a trade agreement with the Common Market of South America (Mercosur). The SICA meeting focuses on strengthening inter-Central American ties. The DR attends as an associate member of the group. Spain, Mexico and Taiwan have been invited as observers.
On Saturday, 31 May, Fernandez will travel to Madrid for meetings with investors, and then, on Monday, he will travel to Rome for meetings at the United Nations World Food Summit (3-5 June). In Rome, the topic will be global food price increases. The UN Food and Agriculture Organization (FAO) has invited all world leaders to attend the meeting where the UN Secretary General Ban Ki-Moon will address the assembly. Pope Benedict XVI is expected to send a special message to the world leaders. The President is being accompanied by the Minister of Foreign Affairs and the Minister of Agriculture as well private sector representatives, including Felix Garcia, Carlomagno Gonzalez and Eric Rivero. Once the meetings in Rome have finished, Fernandez will travel to Barcelona for more meetings with investors before his return on 9 June.

Colored rice
The government has decided to put a halt to the illicit sale of subsidized rice at inflated prices by adding a vegetable dye to the rice, giving it a recognizable color that will alert buyers that it is subsidized. Minister of Commerce and Industry Melanio Paredes, told reporters that the idea to identify the rice came about after talks were held with the Ministry of Agriculture and the Rice Millers Association (Adofa). Paredes said that Adofa guaranteed that a sufficient supply of rice until year's end will reach stores as soon as possible. An additional benefit of the new color will be to discourage the transport of subsidized rice across the border to Haiti.

Uneasiness over livestock feed
Despite government subsidies to some livestock producers, the cost of some types of meat is increasing. Faced with 100% increases in the prices of basic feed for animal production, corn, soybeans, and vegetable oils, there are major worries in the sector. Serious thought is being given to reducing production or to increasing prices. Over the past three months the cost of producing a pound of poultry has increased from RD$15 to RD$21, and this does not include the increased cost of transporting the product to market. Pork production costs increased by RD$3 a pound over the same period. While the government subsidizes poultry producers so that the product reaches the market at RD$30 a pound, the increases in feed costs still put pressure on farmers. A hundredweight of corn has increased by RD$100 over the last year, soy beans by RD$314 over the past six months, and vegetable oils by RD$515 a ton. Vitamins and other products used for feeding animals have increased proportionately. Another fact that weighs heavily on the producers is the fact that 99% of their raw materials for poultry and pork production are imported, while a lesser proportion of cattle feed is imported. Even though supplies are duty free, the worldwide increase in the price of grains and other products has had a dramatic effect on the sector.

Unions call for lower fuel prices
Melanio Paredes, the Minister of Industry and Commerce, has asked the transport unions to organize a technical ad hoc committee to join with his people in order to find a solution to the ever-increasing price of fuel. The unions have put on hold their announced fare increases that would have put publico fares at RD$15 and inner city buses at RD$25 a ride. During their meeting with the minister, the union put their petition on the table: lower fuel prices via an increase in subsidies.

Fares going up 4 June?
Controversial Juan Hubieras, of the Fenatrano transport union, says today that Fenatrano buses will be hiking their prices starting Wednesday, 4 June. On Monday, he had said he would not join CNTU union that was threatening to raise public transport prices. Hubieras says fares will then cost RD$35, up from RD$20 (on long routes) and RD$15 (on short routes). Hubieras has advocated for a cut in government taxes on fuel to stay the price.

PetroCaribe alert
Businessman Ernesto Vilalta, a prominent energy sector industrialist, alerts of the serious consequences of the failure of the government to curtail energy consumption counting on the PetroCaribe petrol credit. He alerted this consumption could increase with the government's purchase of Shell Co's 50% participation in the Dominican Petroleum Refinery. Vilalta, who coordinated the Electricity Forum, a private-government effort to find solutions to the present electricity problems, said that austerity measures need to be applied from the highest level in government.
Vilalta pointed out that although austerity programs have been announced, none of them have ever been implemented. He pointed out that in the discussions that preceded the last tax reform program, the government promised to save RD$17.5 billion, but nothing came of this promise. Regarding the proposal by economist Luis Vargas that the government should take over all generating facilities, Vilalta rejected the idea based on the fact that whenever the government takes over anything it becomes politicized and administered under a system of political patronage.
Economist Luis Vargas has also told Hoy newspaper that the government needs to be very careful in increasing the foreign debt of the country with Petrocaribe, without applying an austerity plan regarding energy consumption. "If not, we will be mortgaging the country's future," he pointed out. According to a recent report from the Ministry of Hacienda, US$300 million were allotted in the 2008 budget for financing from PetroCaribe. It is estimated that this will increase to US$510 million given the present conditions, and to US$800 million if the government purchases the shares of Shell in the Dominican Petroleum Refinery, as this will position it to be able to buy more than the present 50,000 million barrels imported from Venezuela. Hacienda Minister Vicente Bengoa reported that the government had budgeted a US$600 million subsidy for the electricity sector, and has received from PetroCaribe US$170 million that was applied to the electricity subsidy.

Petrol funds invested in highways
The Fernandez administration is using PetroCaribe credit from Venezuela, which should have gone to pay for oil, to expedite the construction of roads. Public Works Minister Freddy Perez told El Caribe that one of the highways that will soon be inaugurated is that linking Tamboril and Santiago. The PetroCaribe agreement signed with Venezuela allows the country to defer payment for 50,000 barrels of petroleum a day, once the price reaches US$52 per barrel. As reported in El Caribe, the government has been handling an average of RD$809.65 million a day in deferred payments. The newspaper reports that figures from the Ministry of Hacienda indicate that as of 23 May the government had received RD$116.59 billion, of which RD$105,87 billion came from internal revenues. The remaining RD$8.45 billion were from foreign sources and of these RD$5.27 billion are said to have come from PetroCaribe.
Tax collections are at a daily average of RD$735.2 million. As of 23 May, with 39.4% of the year gone by, the government had collected 42.41% of revenue estimates. The 2008 budget is for RD$249.61 billion in internal revenues and RD$51.27 billion in loans, for a total budget of RD$300.89 billion. Collections through 23 May had reached 106% of the RD$99.89 billion that was estimated for that period.
The Tax Department (DGII) contributed 68.2% of the revenues, and Customs contributed 21.1%. The National Treasury, which collects taxes on petrol, contributed 10.7%.

CONEP calls for changes
The National Council of Private Business (CONEP) feels that the time has come for the country to begin the transformations needed to face the challenges of the next few years. According to Conep president Lisandro Macarrulla, these changes will allow the country to "face up to the world crisis with as little damage as possible." According to Hoy newspaper, the country has been relatively successful over the past four years, but "we (Conep) feel that now is the time for structural changes..." The first goal is to overcome the crisis in world food prices, and the second goal is to solve the country's structural problems. The Conep leader took a hard look at economic performance during the first quarter of 2008 and saw where imports grew by 30%, of which 20% was not petroleum related, in an economic environment that grew by 6%. Macarrulla said that something is wrong here, especially if one takes a look at exports from the industrial free zones where exports fell by nearly 4%.
Macarrulla told Hoy reporter Aleida Plasencia that Conep was preparing a document to present to the nation outlining their proposals for the structural changes that are needed to successfully overcome the challenges ahead.

High taxes hurt local airlines
Eleven local airlines operate scheduled and charter flights in the Dominican Republic. According to a report by Miguel Lugo in today's El Caribe, these operators feel that they are "condemned" because they have to pay US$60,000-US$70,000 per month in taxes. These include the tax on aviation fuel, which has increased in price from RD $118.86 in January to RD$160.15 per gallon today. There is a RD$4.26 government tax on aviation fuel and a 16% VAT tax on each sale. The airlines also pay fees for runway lights, parking, counter rentals and landing rights. Hector Genao, the secretary general of the Dominican Republic Commercial Airline Association (Alarcom), said that, "the main problems we face are the high taxes, particularly the airport taxes."

American Eagle cancels Samana
American Eagle has announced the suspension of flights from San Juan to Samana and Aruba. Both destinations will continue to be served from Miami. American Eagle also announced that it is reducing flights from its San Juan, Puerto Rico hub to other cities as part of a restructuring program.
The announcement comes after American, roiled by unrelenting fuel costs, announced early in May that it would reduce frequencies and eliminate entire routes and in some cases withdraw from airports. Service to Samana was the most recent American had added to the DR. American still serves Santo Domingo, Punta Cana, Santiago, La Romana airports.
The announcement coincides with one by the Ministry of Public Works that says the speedway to Samana from Santo Domingo will be open to the general public as of 1 June. The highway reduces the time to get to Samana to 1.5 hour. The highway starts about ten minutes from Santo Domingo or Las Americas International Airport.

New women's clinic at Cedimat
First Lady Margarita Cedeno and Cardinal Nicolas de Jesus Lopez Rodriguez were at the Center for Diagnostics, Advanced Medicine and Telemedicine (Cedimat) yesterday for the official opening of the Integrated Women's Clinic. The clinic is located on the second floor of Cedimat that is part of the governmental medical complex, Plaza de la Salud in Santo Domingo. Dr. Eleazar Santana, a gynecologist-obstetrician who specializes in oncology, is in charge of the new center. The center will offer services in general gynecology and endocrinology, and advanced services in endocrinology, gynecological oncology, high-risk pregnancies, breast and reproductive system surgery, laparoscopic surgery, colposcopy, vagino-hysteroscopy, Loop Electro Excision Procedure, criotherapy, diagnostic and fetal studies, such as fetal electronic monitoring (NST) and amniocentesis.
Cedimat specializes in offering highly specialized medical services that in the past, DR residents had to travel abroad to receive. Appointments can be made by calling 809 565-9989, Ext. 2007

80% are living dangerously
According to Colonel Juan Manuel Mendez Garcia, the head of the government's Emergency Operations Center (COE), 80% of the Dominican population lives precariously close to areas prone to flooding or landslides. This becomes more important as the 2008 hurricane season begins, officially on 1 June. Families in the areas of Bonao, San Francisco de Macoris, Nagua, Puerto Plata, Montecristi, San Cristobal and Monte Plata have become increasingly aware of the threats presented by incessant downpours that often occur at this time of the year. According to Listin Diario reporter Adriana Peguero, Mendez Garcia said that the entire coastline is a danger zone, given the experiences of past years. Even areas considered safe, such as the town of Nigua in San Cristobal province, are now in danger of flooding because sedimentation has put the Nizao riverbed two meters above the town. In general, according to Deputy Environment Minister Victor Garcia, most of the country's major river systems suffered significant sedimentation during last year's late season tropical storms Noel and Olga.

More rains
The National Meteorological Office (Onamet) has called a Red Alert for Dajabon, while many other provinces are subject to a Green Alert. Light to moderate rains are expected over nearly all the Dominican Republic during the next 24 to 48 hours. Onamet also reported a tropical wave coming west from Puerto Rico, and this is expected to lead to heavy rains, thunder and lightning, as well as strong gusts of wind. People living in low-lying areas are advised to be on the lookout for flooding and landslides.

Omega goes free
Mambo star Omega was released on his own recognizance and ordered to pay a fine instead of going to jail. Listin Diario writes that the controversial mambo star was supposed to remain in preventive custody for three months but the judge at the First Penal Chamber of the National District Appeals Court decided to make him pay RD$1 million in fines instead. Omega must also appear before a judge once a month. Omega was charged with violent behavior towards his wife and a motel employee. His wife subsequently dropped the charges but the legal authorities decided to prosecute anyway. A group of Omega fans waiting outside the courtroom applauded him as he left. Omega's case has drawn criticism from several quarters with supporters saying that the star has been used as an example while others have said that his wife has the symptoms of an abused wife and only dropped the charges out of fear.
El Caribe reports that the adverse publicity has worked in Omega's favor. Many who have never heard of him now are curious, reports the newspaper, speculating that there are times when the opposite happens. It also pointed out that his popularity could increase among those who follow his music.

Lopez races to the poles
Dominican driver Ramon (JR) Juan Lopez raced his way to a first place finish and set a new course record at the Blackhawk Farms International GT1 race. Lopez is riding a Corvette Meissen and broke a 12-year old course record with a sizzling time of 1.07.634. With the win Lopez stays in first place in the standings with only three races before the SCCA Runoffs. Fans and supporters can catch Lopez at the Road American competition on 22 June in Elkhart Lake, Wisconsin.

Wednesday sales
La Cadena advertises pineapples for RD$19.95ea, mangos for RD$8.95ea, potatoes for RD$7.95lb, ripe plantains for RD$7.95ea. Pola has 35% off fruits and vegetables.
Carrefour advertises squash for RD$4.95lb, Red Globe grapes for RD$62.95lb, pineapples for RD$13.95ea, potatoes for RD$11.95lb, green bell peppers for RD$15.95lb, beets for RD$4.75lb, broccoli for RD$11.95lb, white onions for RD$15.95lb, cantaloupe for RD$15.95ea.
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