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Daily News - Wednesday, 11 June 2008

President on high cost of oil
President Leonel Fernandez addressed the opening session of the XXX Ministerial Meeting of the Economic Commission for Latin America and the Caribbean (ECLAC), and did not hesitate to announce that it was likely that many Latin American countries, including the Dominican Republic, might not be able to meet their obligations of paying for oil while meeting their debt payment schedules. Criticizing what he called "casino and paper capitalism", Fernandez said that there was "chaos" on the international financial markets caused by the huge increases in the price of oil. As a result of this chaos, world food prices are spiraling out of control. Fernandez zeroed in on the financial markets as partially responsible for the increase in oil prices. He said that "the use of pension funds to buy future contracts that have no ties to the real economy is provoking financial disturbances at the international level, and at the same time, social tensions, political tensions and a crisis of democratic governance in our countries."

Longer drinking hours for some
The Ministry of the Interior and Police has announced that it will relax some restrictions on the sale of alcoholic beverages. The new measure will allow bars and other venues to stay open longer on one, specified, day a week. In order to obtain the permission required, the establishment must request a permit in writing, specifying which day of the week they wish to remain open for the extended period. According to El Nuevo Diario, Minister Franklin Almeyda made the announcement during a meeting with bar, nightclub and restaurant owners. Each establishment must ensure proper security, including strict supervision of weapons and a safe place to store them. Santo Domingo has some 600 nightspots and over 65,000 corner stores known as "colmadones" that feature loud music and sidewalk service.
The decision could herald the end of the ban on alcohol sales outside hotels nationwide. The ban is in effect after midnight on Monday to Thursday, and after 2am on weekends and holidays.

Bye-bye propane subsidy
Industry and Commerce Minister Melanio Paredes has announced that the LPG (propane) subsidy would be phased out come August. Paredes said that any subsidized LPG would be for household use and for the 27,000 little cars called "publicos" that serve passengers along specified routes. Paredes told Hoy reporters that his ministry was all set up to carry out the new policy after 16 August, when Leonel Fernandez begins his third term in office. Paredes clarified that as the subsidy has been budgeted, it will remain in place until the new presidential term begins in August. The final decision will be taken during this week's meeting of the Presidential Economic Cabinet. Among the figures quoted by Paredes was the fact that 52% of all imported LPG was used in the transportation sector, in industry or for electricity generation or for fueling high-consumption SUVs. Paredes said that the government could simply not continue to subsidize such consumption.

Subero doesn't want the job
The chief justice of the Dominican Republic Supreme Court has told reporters that he had put his seat on the court at the disposition of the President in 2007. He said, "I am not interested in continuing on the court." Jorge Subero Isa was questioned about his job's future by reporters from Hoy and other newspapers as they speculated on the upcoming meeting of the National Council of Magistrates, the national body in charge of choosing the Supreme Court judges. Subero reminded the reporters that he had never asked for the job. He said that he has always believed that magistrates and justices should be subject to a process of regular evaluations, but at the same time he reminded the reporters that all magistrates elected after 1997 can only be removed if they commit grievous faults or do not fulfill their responsibilities. He added that any vacancies that arise should be filled by judges currently acting on the bench. The Supreme Court of Justice has been under considerable criticism for lenient decisions by judges especially in drug and labor cases.

On corruption in government
News reports focus today on a survey that shows most government jobs are political appointees with little service to the nation, and on a renewed effort by the Alliance Against Corruption to get answers on suspected cases of corruption in government contracting.
A survey by the National Institute of Public Administration revealed that 69% of jobs on the public payroll are part of the patronage or clientilistic system in the Dominican Republic. The survey says that the jobs were obtained either through political recommendations or through connections within the government. The survey also reveals that just 16% get their jobs through an application process, 6% get them by open competition and just 4% are employed based on professional merit or grades. The study also shows that many of those interviewed understood that many people are employed without the academic qualifications needed for the post. The survey covered 600 employees in 36 government offices.
In today's Hoy newspaper, also on the issue of corruption in government, the Alliance against Corruption, a citizens' movement, asks for a probe into the automating of the state university UASD, the lease of the Montana Hotel in Jarabacoa to Pareatis, S.A. and into what it deems the "LPG" case. Alliance coordinator Julio Cesar de la Rosa estimates that corruption ate up RD$50 billion of taxpayer resources last year. He recalled that President Leonel Fernandez, as candidate for the presidency in 1996, had estimated corruption swallowed RD$35 billion.
He said that for the automating of the UASD, the country took on a US$14 million loan from a Taiwanese bank, and allocated the work without a tender, but the results do not match the investment. He said that the Alliance has requested explanations from Economy and Planning Minister Temistocles Montas, but has not received any reply.
The comments were made on the Uno + Uno TeleAntillas, Channel 2 talk show.

ANJE calls for spending cuts
The National Association of Young Entrepreneurs again calls for the government to cut its superfluous spending. It says that first quarter data issued by the Ministry of Hacienda shows that total current spending by the government is up RD$15.87 billion, or a 31.2% increase over the same period last year. ANJE says the extra money has primarily gone into hiring people and on subsidies. ANJE stresses that most of the money has gone to hire employees, or RD$3.33 billion, for a 23.8% increase. Spending on advertising, travel and other non-payroll administrative expenses was up 39.5%, or RD$1.46 billion.
On the same page as the ANJE story, Listin Diario publishes an announcement by Hacienda Minister Vicente Bengoa that 23 journalists were being awarded pensions of RD$20-RD$35,000 a month on the occasion of the Day of the Journalist. The pensions are allotted for the journalists' service to democracy.

Robberies at civil registry offices
The controls put in place by the present Central Electoral Board administration have not been enough to stop what Hoy newspaper calls "factories for forging ID documents (cedulas)." The report highlights the way in which thieves take all that is necessary to create virtual ID document labs for the issuing of birth certificates and cedulas primarily for the lucrative sale to foreigners. It explains that the robberies have taken place at civil registry offices nationwide. Of 26 thefts reported in 2007, only three were in Santo Domingo. The reporter says that in each case, the Police has investigated, but the press has not had access to information about whether anyone has been held responsible for the thefts.
Today's Diario Libre reports that an interim civil registry officer sent to the Boca Chica Civil Registry Office has requested that the entire staff be dismissed.

Agriculture needs RD$31 billion
The Dominican Republic farming sector needs RD$31 billion each year to feed the local population and maintain current export levels. Unfortunately, the reality is that the sector only has access to RD$12 billion in credit within the local banking establishment and RD$7.5 billion through the Agricultural Bank, Banco Agricola. As a result of this situation, farmers and government officials are suggesting the creation of a guarantee fund. Paino Abreu Collado, the administrator of Banco Agricola and Jose Ramon Peralta, the head of the Agro-Business Board (JAD) addressed the issue during their speeches at the presentation of a plan called "A System for Promoting and Financing Farm and Forestry Production in the Dominican Republic." Essentially, the idea is to restructure the Banco Agricola and equip it for handling loans to small farmers. The next step is to create what is called a "second tier bank", one that does not deal with individuals but rather with other financial institutions, and whose job would be to finance the farming sector's long term needs. A final entity would be an insurance company to support small, medium and large-scale farmers. The proposal will depend on financial support from international sources.

Airlines ask for tax-free fuel
The Dominican Republic Airline Association (ALA) has made a strong appeal for the elimination of all taxes on aviation fuel. The request was made to the government and to the Dominican Civil Aviation Institute (IDAC). They are also calling for a revocation of the commission paid to travel agents on tickets sold, leaving up to the airlines to negotiate any fee. According to El Nuevo Diario, the requests are part of an effort by the association to reduce the effects of higher fuel prices on airline flights. The association submitted the proposals to the Civil Aviation Board and the IDAC. The document asked the two entities to revise and modify laws 112-00 and 495-06, and suggested that the direct tax on airline tickets should be rescinded and the 16% VAT tax on jet fuel eliminated. According to ALA, these measures would enhance the Dominican Republic as an attractive destination for international and local flights. These suggestions come at a time when the main airlines serving the country have announced major reductions in their flights this summer and more coming for September.
The airlines have the backing of the National Competitiveness Council, the Airport Department and the Dominican Civil Aviation Institute, which signed an agreement this week pledging to join efforts to confront the high costs of airline travel to the DR. The government institutions agreed to finance a study that would provide a diagnostic, analysis and recommendations on reforms to maintain conditions for future development and competitiveness of passenger and cargo transport to the country. Former Santo Domingo senator Jose Tomas Perez, director of the IDAC is in favor of eliminating the 16% tax on aviation fuel.

Samana Expressway: nice but dear
The advantages of time saved and safety provided by the newly opened Northeast Expressway that connects Santo Domingo with Samana are offset by the cost of the tolls. It costs more than RD$600 to travel to and from Samana on the Expressway by car and over RD$2,400 by truck. While drivers interviewed by Hoy newspaper told reporter Adalberto de la Rosa said that the drive was comfortable, they also remarked on the high price. There are three toll stations along the 106km highway. The first is Marbella, just 300 meters off the Las Americas Expressway, and the toll is RD$40 for passenger cars, pickups and SUVs. Minivans pay RD$80, and buses and trucks pay RD$100. The second toll plaza is located at El Naranjal, 16 kilometers further north. There the tolls are RD$130 for passenger cars, SUVs and pickup trucks; for minivans, the toll is RD$260. The toll for buses and trucks with just two axels is pegged at RD$415, and larger trucks pay RD$590. At the third tollbooth, located at the Rincon de Molinillos Crossroads, the tolls are RD$155, RD$320, RD$415 and RD$590 respectively. While several of those interviewed said that the road was wonderful, they all complained about the cost. One interesting point that the Hoy reporter mentioned was the fact that many of those interviewed felt that they were now "connected" to the rest of the country and now had the opportunity to start small businesses along the highway.

Yet another small docs' strike
The Dominican Medical Association (CMD) has announced the continuation of its strike action in pursuit of higher salaries and an elimination of fees for patients in public hospitals. Their next work stoppage will affect the north of the country and will last for 24 hours. CMD president Waldo Ariel Suero announced the strike at a press conference yesterday. This will be the sixth strike so far this year, but, as yet, the Ministry of Public Health has not given any signs that it is willing to negotiate with the CMD or its representatives. The government is working on the creation of a new Public Hospital Network aimed at merging public hospitals and Social Security hospitals, assigning physicians to a single hospital, and increasing their working hours from 4 to 6 hours a day, while at the same time increasing wages and adding productivity incentives. This is opposed by the CMD, which wants to maintain the status quo. At present, many public hospital doctors keep several government jobs with the same schedule.

Lighter beer popular
The local beer companies have turned to light beer as a way of saving money without losing customers, according to an article in today's Listin Diario. Esteban Delgado writes that the move to lighter beers with lower alcoholic content is also designed to attract new clients. As the reporter says, "it's all business." The Dominican National Brewery (CND), the makers of Presidente, Bohemia and other beers, currently dominates the local market with a 90% share. They are facing stiff competition from AmBev's Brahma beer, which has taken a small slice of the market and seems to be gaining, slowly, in the arena. The move to attract new consumers with a smoother and lighter product started fairly recently: just two years ago a consumer would have had to specify their preference for a "light" beer. Now the situation is reversed and normal beer is becoming a second choice. Normal beer contains 5% alcohol and light beer 4.3% alcohol. As alcohol is taxed, if less is used, less money goes to the taxman. A new drink called Exotonic" was recently introduced by CND, containing just 3.9% of alcohol and available in several flavors.

Trade deficit with US grows
Economist Luis Vargas says that the DR's trade deficit with the United States is up 92.1% to US$955.9 million, up from US$497.7 million for the same first quarter last year. As reported in Hoy, he says that the deficit is a combination of a 23.4% increase to US$2.27 billion in imports, plus a decline of 2.1% to RD$1.37 billion in exports. Marking the implementation of the DR-CAFTA free trade agreement, over a 14-month period, from March 2007 to April 2008, the trade deficit has increased from US$142.1 million to US$267.6 million a month. He says this is a "scandalous red of around UUS$2.5 billion, or an average of US$179 million".

Struggle over control of security
The Armed Forces and the Ministry of the Interior and Police are each trying to exert control over the growing private security business. According to Diario Libre, the ministries are fighting so intensely over final control of the sector that the process in the Dominican Congress that will actually produce a bill to oversee the industry has been stalled for weeks. The president of the Permanent Commission of the Interior and Police and Citizen Safety, Jose Ramon de la Rosa Mateo, told reporters that the review process of the bill is well advanced and that his committee is just waiting for the decision on who will house and control the supervision of all private security. Both the Armed Forces and the Ministry of the Interior and of the Police want the job. Both ministries have been asked to submit their proposals to the committee, according to the senator from San Juan de la Maguana.

Chief supports Santiago cops
The chief of police in the Dominican Republic, Guillermo Guzman Fermin, told reporters and an audience of police officers that he was in Santiago to support the efforts of General Raudo Ramirez Comas in his work to tackle the ongoing crime wave in the region. The police chief had expressed some negative comments last weekend after Minister Franklin Almeyda blasted the force for its failure to curb crime in the Dominican Republic. In the interim, national business leaders like Celso Marranzini have called for higher salaries for police officers as a way of stemming police corruption. A paid announcement in the national press supported Ramirez Comas and praised his work. The announcement was paid for by leading business and industrial groups. In his comments, the chief of police said that an additional 17 motorcycles would be sent to Santiago and that the aim of his presence in the city was to support General Ramirez Comas. He said that he was in Santiago "as part of a routine series of visits to all the command centers operated by the National Police.

Wednesday sales
Super Pola is promoting 35% reductions on fruits and vegetables.
La Cadena is advertising squash for RD$3.95lb, Tommy Adkins mangos for RD$5.95ea, pears for RD$41.95lb, ripe plantains for RD$7.95ea, red onions for RD$7.95, and green beans for RD$15.95lb.
Nacional supermarket is offering 40% off eggplant, and 20% off other fruits and vegetables. Also, Milex milk powder for RD$429.95/2000g, Pimco rice for RD$198.95/10lbs, and Salami super Checo for RD$44.95lb.
Carrefour has its usual Wednesday fruits and vegetables sale. Pineapples for RD$11.95ea, papayas for RD$9.50lb, watermelon for RD$5.95lb, red onions RD$7.90lb, beets for RD$4.50lb, carrots RD$6.50lb, plantains RD$7.50lb, garlic RD$43.95lb, white rice RD$14.95lb, and green bell peppers RD$15.50lb.
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