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Daily News - Friday, 06 June 2008

Fernandez attends mass in Rome
President Leonel Fernandez has attended mass at Rome's Basilica de San Giovanni Batista de Fiorentini, where a chapel to the Virgen de la Altagracia, protector of the Dominican Republic, was opened in 2007. Yesterday's mass was to give thanks to God for Fernandez's re-election in the 16 May 2008 election. Monsignor Ramon Benito de la Rosa y Carpio, president of the Dominican Episcopate, led the mass that was organized by the Dominican Embassy to the Holy See. Also present were Archbishop Ciprian Cardena Palo and Monsignor Pietro Parolin, deputy secretary for state relations at the Vatican.

Renewable Energy Ruling passed
President Leonel Fernandez has issued the Renewable Energy Ruling yesterday, on the occasion of Environment Day. The ruling applies to Law 57-07 on renewable energy. Reports are that RD$3 billion in renewable energy programs were waitlisted for incentives contained in the ruling.

Free zone industry bill to Congress
President Leonel Fernandez has sent a bill to Congress that seeks to strengthen free zone industry competitiveness. The bill calls for 100% exemptions on income tax, ITBIS value added tax and luxury tax. Free zone companies would also be exempt from paying taxes on telecommunications, and on imports of inputs, machinery and vehicles.

Using Mexican fabrics
Congress passed an amendment in the DR-CAFTA trade agreement that will allow the DR to use Mexican fabrics in the production and export of clothes and textiles. Luisa Fernandez Duran, director of the National Free Trade Export Council (CNZFE), said that the amendment was agreed on 30 May. The amendment, 204-08, is relative to the rules of origin for pocket fabrics, also known as "pocketing". The amendment allows for the use of 100 million square meters of Mexican and Canadian fabrics. The volume could be doubled next year.

Free zones alive and kicking
Fernando Capellan, president of the Dominican Association of Free Zones, and president of Grupo M, the largest apparel company in the DR, highlighted the company's contribution to the economy yesterday. He stressed that manufacturing free zone companies' exports make up 70% of the country's total exports. He said that the apparel sector within the free zones makes up 59% of total operations. Free zone employment is at 115,000-130,000 jobs, down from 200,000 in the past.
Capellan said that Grupo M alone employs 11,000 and contracts additional work to 39,000 other workers, mainly in the Santiago area.
Furthermore, Capellan stressed the importance of the Codevi Industrial Park (13 industrial buildings to be constructed in different phases) in Ouanaminthe, a town of 70,000 inhabitants on the border with Haiti, only one kilometer from Dajabon, the largest Dominican city on the border (65,000 inhabitants). Grupo M employs 2,600 Haitians and there are prospects for the creation of 10,000 more jobs in the next five years. Capellan argues that much of the money spent on wages for the Haitians returns to Dajabon in the form of purchases. The industrial park also serves to curtail immigration of job-seeking Haitians to the DR.
Capellan highlighted recent congressional approval of the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II) provision that provides additional ways Haitian apparel can qualify for duty-free treatment and authorizes a new apparel sector labor capacity building and monitoring program. Grupo M farms out low-skilled work that would be too expensive to do in the DR to the Haiti industries. Higher value added processes are then carried out in the DR.
Founded in 1986, Grupo M is the largest private sector employer in the DR with 11,000 employees working in 22 production facilities (including JVs) and is the largest apparel producer in the Caribbean/Central American area. Grupo M supplies major US brand name companies including Gap, Old Navy, Liz Claiborne, Eddie Bauer, DKNY, Carhartt, Perry Ellis, Dockers and Levis brands among others. Its output amounts to about 22% of all apparel exports in the country.

DR and relations with China
The absence of diplomatic relations with China is making it difficult for the DR to take advantage of the size, strength and diversity of the Chinese economy. According to a report in the Listin Diario, it's like turning your back on the most diverse and fastest growing economy in the world. Listin writes that in 2007, even without an agreement between both nations, trade totaled US$600 million and grew by 23% compared to 2006. Standing in the way of a free trade agreement between China and the DR are the strong relations between the DR and Taiwan. While most Latin American nations have broken off relations with Taiwan and chosen to deal with China, the DR has continued to rely on Taiwan and in the short term has benefited from its relationship with the smaller Asian nation. However, Listin cites sources that say that what's holding back Chinese investment in the DR is a trade agreement. The DR has yet to confirm its participation in the 2010 Shanghai Expo during which China expects 70 million people to visit China and expects 400,000 to attend. Of the 172 nations participating, 10 don't have formal relations with China, which is not making this a requirement for attendance. Listin reports that China has set aside US$650,000 for the DR and El Salvador's stands during the expo.

Airline cuts hurt travel and cargo
Tourism Minister Felix Jimenez and Airport Department director Andres Van Der Horst concur that the profitability problems affecting the airlines and leading to cuts in flights and frequencies to the DR has a direct effect on remittances, agriculture and tourism. They said that the government is exploring the possibility of cutting taxes on aviation fuel (avtur) in order to compensate the airlines for the burden f record fuel prices.
Jimenez said that the strategy would also include other measures to ensure that the DR is less affected by the present economic problems. A meeting with private sector representatives to discuss the proposal has been called for Wednesday, 11 June at the Hotel Hamaca to finalize the proposal that would then be submitted to President Fernandez for approval. Jimenez said they are concerned that Europe may reduce flights and frequencies, following the cost saving strategy of US airlines, as reported in Listin Diario.
American Airlines cancelled its flight to Fort Lauderdale on 31 May. This week it also announced the cancellation of the American Eagle flight to Saint Maarten from Santo Domingo, AA jet service to San Juan, and Samana to San Juan flights as of September 3. Delta has also announced the cancellation of its JFK-SDQ flight as of 9 September. And US Airways has just kept its Punta Cana connection from Philadelphia. Continental and United Airlines have also announced that major flight reductions are imminent. US Airways will stop flying its Santo Domingo-Philadelphia route in September 6. They also will reduce frequencies to Punta Cana from Philadelphia and Charlotte. No changes have been announced on the Punta Cana-Boston route for now.
Van der Horst said that fruit and vegetable exports, as well as passenger travel and the tourism industry, are affected by the flight reductions. High value free zone manufacturing operations are also dependent on air cargo. The DR has a large expatriate community that regularly travels home. The reduction in supply of flights that is bringing about a rise in prices will considerably reduce the number of Dominicans who travel home to visit friends and family.

Aviation taxes
Dominican Travel Writers Association president Manuel Quiterio Cedeno says that while the Dominican government cannot do anything about international oil prices, it can cut its own taxes. He says that from May 2004 to May 2008, the tax on avtur has increased 901%, and the cost of fuel is up 104%. An analysis of avtur prices shows that the DR's are at least 20% higher than others in the region. Furthermore, Cedeno says this adds to airport charges that he calls "very expensive."
As reported in Hoy, one of the proposals would be to eliminate the ITBIS tax on aviation fuel. In addition to fewer tourists, the country would also suffer from a decline in visits by expatriate Dominicans who are already being affected by the economic slowdown in the United States and Europe. Travel by expatriate Dominicans from abroad was already down 3.4% in the first quarter.

Ferry will have own port
Ernesto Gonzalez has announced that the Ferry del Caribe will have its own terminal at the Sans Souci tourist port. Gonzalez, president of the company, said that in order for the Ferry to have its own terminal, President Leonel Fernandez, through decree 193-07, set aside 29,353m2 at the port. Gonzalez thanked Fernandez for providing an area for the ferry. The terminal has an estimated cost of US$10 million and construction could begin in August. The Ferry, which sails between Puerto Rico and the DR, has been in operation for 20 years.

Church on Environment Day
Speaking for the Catholic Church Conference of the Episcopate at the Santo Domingo Cathedral yesterday, Monsignor Ramon Benito Angeles called on the authorities to make major changes in what he described as "their negligent and complacent approach" towards environmental predators. He said there is a lack of prevention, controls and authority when it comes to preserving the environment. He said that those responsible for the depredation of natural resources, deforestation or erosion are not poor farmers, but rather the authorities that have been negligent, complicit with depredation or with the ambitions of those who have been entrusted with resource preservation. He criticized the ease with which those caught committing environmental crimes reported in the press are released by the police. He urged for more environmental education so that children do not remain indifferent to what is happening. "How is it possible that trucks loaded with logs pass by us all, that we continue to cut down wood from our mountains to make charcoal, that unscrupulous people steal baby parrots and that these are sold on the highway out of Santiago and no one detains them? Why do so few people respect the seasonal ban on selling certain seafood? What were laws created for?"
For more information, see www.ced.org.do

Doctors' strike cause strife
Yesterday's doctors' strike featured emotional confrontations between doctors, public officials and patients who just wanted treatment. In San Cristobal and Bani members of the Dominican Medical Association (CMD) and patients got into a war of words as patients pleaded for basic assistance. Hoy reports that CMD president Waldo Ariel Suero and Public Health Ministry regional director Jose Daniel Martinez Garces were at the Juan Pablo Pina hospital in San Cristobal and were witnessed arguing in the hospital's pediatrics section. Reports indicate that the hospitals were filled with patients yesterday, while doctors were nowhere to be found. One woman is quoted as saying, " I don't care who takes care of my child. I just don't want her to die". This was the seventh strike the CMD has held since February. Doctors are pushing for wage increases, while the Ministry of Public Health is insisting that pay needs to be pegged to productivity.

What relocation project?
Ciudad Alternativa (CA) and the Barrio Rights Committee (COPADEBA), organizations that have been campaigning for the rights of marginalized barrio dwellers since 1979 and 1989, say that they are not aware of a government plan to relocate 2,000 families living on the banks of the Ozama and Isabela rivers. CA and COPADEBA directors Roman Batista and Patricia Gomez expressed their concerns about the government's handling of this initiative. Hoy reported yesterday that the government aims to transform the site into a desirable residential area. The dredging of the river for boat traffic would also make it a tourist attraction. Residents of the La Cienaga, Capotillo, Simon Bolivar, La Zurza, Los Guandules and Gualey neighborhoods would be relocated.

It wasn't me
Felipe Ditren at the Ministry of Environment is denying reports that he was who authorized the entrance of a Panamanian boat carrying toxic materials into Dominican waters. The ship, which is currently docked in Barahona, has been ordered to be towed from Dominican waters. The Deputy Environmental Minister didn't buy the excuse and has blamed Ditren for the ship's presence. He added that Ditren made a mistake in the interpretation of the law and said that an investigation into the case would take place. Ditren however claims that the "sludge" on the ship is not toxic and explained that it is just a mix of water and diesel fuel. Ditren also claims that the ship, registered as MST-Trinidad, was in the country for maintenance and was never scheduled to dump any of the sludge. The ship has been given until today to leave the DR and Barahona Environmental prosecutor Bolivar D'Oleo said the ship was expected to leave at 6am. The vessel needed to tow the ship out was not available and it is expected to arrive sometime today. Law 64-00 prohibits the importation of toxic material to the DR and also prohibits the use of the DR as a transit point for those hazardous materials.

Venezuelans arrested for bank robbery
The Specialized Airport Security Corps (CESA) and the Police have arrested six Venezuelans suspected of robbing the Banco del Progreso branch in La Romana. The group, which was detained at Las Americas International yesterday, is also linked to raids on other businesses. Four of the six were arrested in the boarding area, and two others while lining up in Migration. The men were planning to fly to Colombia, via Caracas. The police received a tip-off that the group was leaving the country. According to the police report in Listin Diario, the gang also includes Dominicans and Colombians.

Dominican gets drafted
Third baseman Pedro Alvarez became the third highest Dominican ever drafted in the Major League Baseball amateur draft. Alvarez was chosen second by the Pittsburg Pirates. Alex Rodriguez was chosen first in 1993 and Moises Alou was chosen second by the Pittsburg Pirates in 1986. Interviewed from his home in New York, Alvarez said he couldn't believe his selection and defined it as a great moment. Alvarez, a standout at Vanderbilt University, knew he was to be selected in the second position, since he had been called by Pirates officials days before, but decided to keep it a secret as a surprise. It is estimated that Alvarez will sign a multi-million dollar contract and could see time in the big leagues within two years. This isn't the young man's first taste of big league recognition. Four years ago, while still in high school, Alvarez was selected by the Boston Red Sox. Alvarez, following his parents' advice, declined the Sox 700,000 offer and decided to go to school and study economics. Alvarez is considered the "next" Alex Rodriguez.

Friday sales
Ferreteria Popular is offering 5-20% off select items.
There are reductions on seafood at the Super Pola.
Hache has its 25% off Friday sale, with 50% off the item purchased in the last hour of the sale.
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