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Daily News - Tuesday, 08 July 2008

Presidential press conference
President Leonel Fernandez has agreed to a press conference with newspaper economic editors and members of the international press accredited in the country on Thursday at 7:30pm. Presidential Palace spokesman Rafael Nunez said that the President would focus on the recent fuel and food price increases. Several business groups have been urging the President to speak out, saying that the time for analyzing the situation is long behind us. The president of the National Council for Private Business (Conep), Lisandro Macarulla says that the time has come for major structural changes. Homero Figueroa, of Diario Libre, comments today that the authorities have to "decide to decide." "The country is suffering from a decisional paralysis," he writes.

Economic reshuffling needed
The National Hotels & Restaurants Association (Asonahores) is calling on the government to reorient its economic policies to favor productive sectors. Asonahores understands that macro-economic stability is not enough, and highlights the fact that the economy has grown asymmetrically. According to the hoteliers, there are many sectorial, social and regional inequities because the policies in place affect the sectors' capacity to compete. Asonahores stresses that tourism, industry, mining, farming, free zones and construction are sectors that contribute the most jobs, and need the government's attention. Recently, the National Council for Business (CONEP) warned that the telecommunications, energy and banking sectors grew 106% over the past seven years, compared to just 23.6% growth in the tourism, industry, mining, farming, free zones and construction sectors over the same period.
Conep has called for government priorities to be reshuffled so that less is spent on the energy and government sectors, and more can be spent on health and education. A study by Conep highlights the fact that the policies in place have stimulated imports, leading to an increase in the deficit in the current account of the balance of payments, that this year should reach US$4 billion.

Tourism & exports
Airport Department director Andres Van der Horst is urging the government to give priority to the tourism and export sectors. Interviewed by Manuel Jimenez on Channel 27, he observed that at a time when the government is making concessions to the land transport unions, including a recent freeze on fuel prices, they need to turn their attention to aviation issues. He said that tourism is currently at the core of our economy. Airlines are feeling the effects of rising aviation fuel costs, and legacy airlines are cutting their flights to the DR, one of the Caribbean countries with the most expensive fuel, in order to make savings.
Van der Horst also called on Agriculture Minister Salvador Jimenez to authorize the export of mangoes and vegetables to New York. He said that the Agriculture Minister has yet to sign the phyto-sanitary permit for the export of the produce on cargo planes, despite numerous petitions. He said he has not been able to meet with the minister to discuss the matter, and this is affecting local producers.
Van der Horst criticized the rising aviation fuel prices. A large portion of local prices consists of taxes, to the point that the government earns more taxes as the price increases. "Here we have to think about what is more important, the development of the tourism and agricultural sectors, or only the tax part," said Vanderhorst, as reported in Hoy.
He commented that efforts are being made to replace flights by American Airlines and Continental, which announced cancellations come this September. The cancellation of the regular flights affects cargo operations as well as passenger transport.

Export products
A recent study by the Inter-American Institute for Cooperation on Agriculture (IICA), with the National Competitiveness Council and the Ministry of Agriculture, points to the agricultural products with the strongest potential for export and domestic consumption, as reported by Diario Libre. These products are beans, garlic, onions, mango, avocados, bananas, Asian vegetables, beef, chicken and milk.
In a product by product breakdown, IICA highlights the fact that the country is self-sufficient in rice production. Local consumption totals 800,000 quintals, with rice produced in 11 regions, the main area being the northeast.
Asian vegetables include okra, eggplant, Balsam apple (cundeamor), cucumbers (parvol), tindora, string beans and peppers. In the DR, 2,516 hectares are cultivated with Asian vegetables, mainly in the central province of La Vega. Most of these exports are to the US.
Avocado exports totaled 20,598 tons in 2007, mostly to the US and Europe. The leading avocado producing areas are Cambita (San Cristobal), San Jose de Ocoa, Calimete (Elias Pina), Arroyo (Pedernales), Altamira (Puerto Plata) and Villa Trina (Espaillat).

Single house Congress proposed
The president of the Chamber of Deputies, Julio Cesar Valentin, is proposing the reduction of the Legislative Branch to a single section, merging the Chamber of Deputies and the Senate. He said the upcoming constitutional reform could fix the number of legislators at 150. Valentin said that this would lead to savings in the cost of Dominican democracy, as reported in Hoy.

Agreement null
Public Works Minister Victor Diaz Rua says the contract with Codasa, the company building the San Pedro de Macoris-La Romana highway project, will be voided because the company has violated the construction agreement. According to El Caribe, the Minister took action after reading a company letter that said they would be selling the concession for US$111 million to a Brazilian and Colombian company.
Diaz said the original contract was for completion of the highway in 30 months, but the company has been working for seven years and has still not finished the road. Diaz said that at the rate they are going, it would take them another seven years to finish the project, as reported in El Nacional.
Diaz argued that the delays have occurred because the company has been building the highway using the funds from the tollbooths on Autopista Las Americas when they should have been using their own funds to meet project deadlines. He explained on the Nuria and Huchi Lora afternoon talk show that with the present state of affairs, Codasa would have been paid for their work once the roadway was finished, but would still be able to continue collecting tolls for the next 30 years.
"They have the most important concession in the country and when they complete the road they will not have to pay anything because at the end the money produced by the three tolls will be all theirs even if they have not invested anything, and that does not make sense," said Diaz Rua. He estimated the tolls collected at Las Americas expressway at RD$20 million a month, or RD$1.68 billion over the seven-year period. The money is also being used for road maintenance.
Diaz says that the government will finish the project using funds from the Las Americas tolls. He added that a group of lawyers has been assembled to represent the DR in an arbitration court in New York.
The local press has yet to report on the Codasa position.

Terrero still at work
Even though Chamber of Accounts member Andres Terrero quit his post last week, he showed up at work on Monday as if nothing had happened. Terrero walked into his office and wrote a letter to the Senate explaining that he was not leaving the Chamber of Accounts. He said he would continue working as usual until the Senate decides what to do with him and until the new Chamber members are announced.
In related news, judicial consultant Cesar Pina Toribio says that the members of the Chamber who quit could return to their posts if President Leonel Fernandez re-appoints them. Eight out of nine members resigned and only one was fired.
The Chamber of Accounts is the government department in charge of auditing the government's finances. The Senate appoints the members from a shortlist sent to them by the President. The current nine members were known for their lack of productivity, low quality of work, extraordinary wage and benefits packages, and internal bickering. Hotoniel Bonilla, deputy director of the governmental Anti-Corruption Office (DPCA) commented that in 18 months on the job, the Chamber of Accounts only was able to complete eight audits.

Tower construction halted
Judges from the Second Chamber of the Contentious Tributary and Administrative Court have ordered a stop to the construction of a high-rise apartment building in the Cacicazgos section of Santo Domingo. A neighborhood association campaigned against the construction, arguing that the tower had been irregularly authorized by city councilors in violation of city building regulations. Judges hearing the case ruled that the councilors did not have the authority to authorize the construction, and that this was the sole responsibility of the municipal urban planning office.

More credit for fuel
The DR wants 20,000 more barrels of petroleum from Venezuela per day as part of the PetroCaribe Agreement. The DR is currently receiving 30,000 daily barrels of fuel from Venezuela, 50% of which is financed. If approved, the country would be financing 25,000 barrels per day.
Hacienda Minister Vicente Bengoa said that the request would be made during President Leonel Fernandez's attendance at the PetroCaribe summit in Caracas this weekend. Fifteen other heads of state from PetroCaribe beneficiary nations in the Caribbean are expected to attend. The DR government recently purchased Shell's 50% share in the Dominican Petroleum Refinery, which means that the country can place a request for more fuel. However, Bengoa told El Caribe that the RD$500 million that would be released with the securing of the additional credit would not be enough to cover the subsidies if the price of oil keeps on rising. As part of the PetroCaribe Agreement, the DR is able to finance 50% of the fuel it receives from Venezuela with an interest rate of 1% and two year's grace, payable in 25 years. The country has the option of paying off the fuel bill with goods such as bananas, rice or sugar.

Gas-guzzling vehicles
There are no incentives, apart from the high cost of fuel, to save fuel in the DR unlike the experience in other countries, points out journalist Rainier Maldonado in a report in today's Listin Diario. He says that when the Tax Department (DGII) tried to penalize gas-guzzling SUVs with higher rates on license plates, the law had to be aborted. The director of the Vehicle Manufacturers Concessionaires Association (ACOFAVE), Enrique Fernandez pointed out that now that people in the US are replacing their gas-guzzling vehicles, thousands of these could end up in the DR, where their new owners would convert them to propane gas for savings.
The government is one of the biggest consumers of fuel and supporters of the gas-guzzling vehicles. Government programs in place enable government officials to purchase the large, high consumption vehicles. Furthermore, thousands of government officers receive stipends for fuel, which gives them little incentive to save.
Furthermore, the more fuel is sold, the more taxes the government collects, thus increasing its revenues, for a Catch 22 situation.

Banks take advantage
Credit card rates from DR banks are going up and Listin Diario reports that current rates now range from 7% to 10% per month. Credit card holders are also complaining that banks are taking advantage of cardholders by charging interest on the total value of the debt for the monthly period and not on the remaining balance. For example, if you owe RD$1,000 on your card and pay off RD$900 before the cut-off date, the bank will charge you interest on the total value of RD$1,000 and not the outstanding RD$100. This is in violation of resolution 7-2001 passed by the Banking Superintendence. What's most frustrating for card holders is that banks have yet to inform their clients about this practice and of the increase in interest rates.

AFS president visits
Francisco (Tachi) Cazal, the president of the student exchange program AFS will be visiting the DR this week to promote their intercultural exchange programs for young people and teachers. During his visit, AFS staff and volunteers in Santo Domingo will be able to hear directly from the president about the contributions the organization is making to promote global understanding. As a 17-year old, Cazal himself participated in the program, receiving a scholarship to study in Luverne, Minnesota in 1974-75.
The general public is invited to a talk by Cazal on Thursday, 10 July at the Centro Leon in Santiago. He will speak on the Impact of Cultural Exchange Experiences.
Also on his agenda are meetings with AFS regional committees in the DR. Cazal will be present when the AFS Committee in La Romana is presented with the award for best local committee.
In 2008, AFS is celebrating its 60th year. This year, 60 young Dominicans will travel abroad for half or year-long exchanges. The DR will host 75 students this year, 14 of whom will be located in Santo Domingo, and the others will be based in Santiago, La Romana, Moca, Nagua, El Seibo, Higuey, Hato Mayor, San Juan de la Maguana, Rio San Juan, Sanchez, Las Matas, Cabrera, San Francisco de Macoris, Villa Tapia, La Vega, San Jose de Ocoa, Samana and Bonao.
Cazal, a civil engineer from Paraguay, has served as AFS president since 2005.

Inoa signing investigated
The Fort Worth Star-Telegram is reporting that Major League Baseball will be looking into the recent signing of top Dominican prospect Michael Inoa. Inoa recently signed a rookie contract with the Oakland Athletics and received a record US$4.25 million signing bonus. MLB will investigate rumors of improprieties on behalf of the As and allegations of an agreed upon contract before the 2 July international signing period. The Star quotes Inoa's agent Adam Katz as saying that the young Inoa would have gotten a larger bonus (upwards of US$5 million) from the Texas Rangers if he had known about the offer and hadn't already committed to the As.

A little Yankee panky
What started out as a series of tabloid headlines and Hollywood-style gossip has now become fact as Cynthia Rodriguez, Alex Rodriguez's wife, has filed for divorce. Sources say that Cynthia will seek alimony and custody of the couple's two children. Mrs. Rodriguez, who filed the complaint in Miami-Dade Circuit Court, cites extra-marital affairs but makes no mention of her husband's alleged tryst with pop queen Madonna. Adding an odd twist to the plot are persistent rumors that Rodriguez has been lured into the teachings of Kabala, the study of Jewish mysticism, by Madonna. Insiders say that Rodriguez's interest in Kabala has led to an even bigger rift between the couple. Alex Rodriguez has stayed mum on the subject, but Madonna, whose own marriage with Guy Ritchie is reportedly on the rocks, released a statement denying all claims and saying that she only knows Rodriguez through Guy Oseary, who manages both stars.

Dona Goya is 118
The DR might have its very own entry in the Guinness Book of World Records with local centenarian Gregoria Disla Germosen or Dona Goya. Dona Goya is thought to have been born in the town of Loma de Cabrera in 1890. Her parents were Benita Disla and Conrado Moncion. She moved to the city of Santiago in 1910, and became well-known locally for making empanadas. She went on to have four children, only one of whom, a daughter - Ana Maria Disla - survives. Ana Maria is now 90 years old and cares for her aging mother. Locals say that Dona Goya is healthy enough to walk each day, but that she also smokes a cigar every day. Currently, Edna Scott Parker is considered the world's oldest living person at the age of 114, though no word on whether or not action is being taken in order to verify and officially recognize Dona Goya's extraordinary longevity.
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