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Daily News - Tuesday, 15 July 2008

Chavez and Fernandez agreements
The Dominican Republic will invest in the exploration and exploitation of an area of the Orinoco River in Venezuela, an oil reserve with an estimated 235 billion barrels, says the Presidency. The state-owned Dominican Petroleum Refinery would be the investor for the Dominican government in the Petroleo de Venezuela (PDVSA) venture. Likewise, President Leonel Fernandez said that he had reached an agreement with President Hugo Chavez for Venezuela to participate in the exploration and exploitation of bauxite in the south western Dominican province of Pedernales. The bauxite would then be exported to Venezuela for processing.
The Presidency also announced that both countries would establish a strategic alliance to increase farm production in the country and strengthen local food security plans. Venezuela would provide technical and financial cooperation for purchasing fertilizer for farming. The plan is to generate a major surplus to be used to pay the oil debt with Venezuela, under the PetroCaribe Energy Agreement.
A bilateral agreement to fight drug trafficking was also signed during President Fernandez's visit to Venezuela to attend the PetroCaribe Summit.
President Fernandez returned yesterday from Venezuela.

Bengoa explains PetroCaribe
Hacienda Minister Vicente Bengoa explains that at the current level of consumption of 30,000 barrels a day, under the new PetroCaribe agreement that provides long-term financing for 60% of its fuel purchases with oil at US$100 or more per barrel and 70% when the price is US$200 or more, the government would have US$907 million to use on other chapters. The government expects to eventually increase its purchases to 50,000 barrels per day (with the purchase of Shell's stock), and thus would be releasing US$1.5 billion, by financing it long term.
Bengoa described the recent PetroCaribe Summit as the most successful so far. During the summit the DR was able to rework its financing terms and the country will now be able to repay its debt to Venezuela with goods and services. The Minister also explained that the DR has received US$800 million in revenue from PetroCaribe since the agreement was signed in 2005.
Bengoa said the money would be used to "immediately resolve" the electricity problem, but did not specify how this would be done, or whether it would just mean more subsidies for the inefficient power distribution companies. Bengoa says that so far, the funds have been invested in the State-run Electricity Corporations, the CDEEE. Energy analysts have described the CDEEE as one of the most inefficient and bureaucratic of government institutions.

Shell news
Hacienda Minister Vicente Bengoa says that within the next 10 days lawyers for the DR will finalize the purchase of Shell's stake in the Dominican Petroleum Refinery (REFIDOMSA), making it 100% state-owned by 21 July. Shell has agreed to sell their stock for US$110 million. Listin Diario is reporting, however, that during his visit to Venezuela for the PetroCaribe summit, President Leonel Fernandez offered Venezuelan president Hugo Chavez either a part or a whole stake in REFIDOMSA. Foreign Minister Carlos Morales Troncoso says that Chavez may well agree to the purchase. During a meeting last Sunday Chavez said he would be interested in becoming a partner with the DR in various projects.

Explaining the blackouts
Energy Superintendent Francisco Mendez insists that the blackouts are due to maintenance works. Hoy reports however that other sources indicate that they are part of a government plan to save on fuel costs. These sources say that the government has not been supplying fuel at the required levels. In recent weeks, even sectors with the best bill payment rates, including Bella Vista, El Millon, Julieta and Evaristo Morales among many others, are being blacked out for more than four hours. Other areas of the city are suffering 10-hour blackouts. Contradictorily, when there are power outages in many cases power bills are higher, as many homes rely on their power-guzzling inverters. Furthermore, blackouts mean big supplementary energy bills for diesel-powered back-up generators.

Northern express connection
Public Works Minister Victor Diaz Rua says that the government plans to build an elevated expressway above the Duarte Highway-John F. Kennedy Avenue to connect the overpass at Los Alcarrizos with Las Americas Expressway. Overpasses would be built at the intersections with Manoguayabo, Nunez de Caceres Ave and near TeleAntillas. Likewise, another overpass would be built over the San Isidro highway to connect it with Charles de Gaulle Ave, and yet another at the Mella Highway, bringing the total number of overpasses in the east side of the city to two. The government has also announced the construction of the second line of the Santo Domingo metro along that route.

Digital cities
The Presidential Office for Computer Information, the Dominican Telecommunications Institute (Indotel), the Presidency Administrative Ministry and the Ibero-American Center for Research and Telecommunication Businesses are launching a new project aimed at making municipalities easily accessible via the internet. The Dominican Municipal Federation will also help in developing the project, which is part of the "Digital Government" initiative that seeks to make the government accessible to citizens via the Internet. Presidency Administrative Minister Luis Manuel Bonetti described this effort as "transcendental".

Change not enough
The government is putting 3.4 million coins in different denominations into circulation, but spokesmen for the business community say the lack of change is still affecting them. The Central Bank had consistently denied rumors of a coin shortage. It says that in the coming months it will release more coins into circulation. The new coins could ease the frustrations of Dominican consumers, who often have to accept sweets instead of change.
Alberto de Leon from the National Provisions Wholesalers Federation welcomed the injection of coins. Antonio Cruz Rojas from the National Traders and Business Federation (FENACERD) said that the shortage of coins has affected businesses that sell in small volumes because they don't have proper change, which forces consumers to return merchandise.

Decisional paralysis traps government
Last week President Leonel Fernandez addressed the nation regarding the current economic crisis and the nation's fuel dependency, but his comments during a press conference are said to have left much to be desired.
Hoy writer Juan Bolivar Diaz comments that his answers demonstrated a government trapped behind the financial crisis, pressured by public opinion and one that has yet to decide on measures to face the current situation created by rising oil and food prices. Diaz explains that Fernandez didn't meet the expectations when he spoke last week and that it was public pressure that had forced the President to speak up. Diaz writes that understandably, during the pre-electoral period, Fernandez refused to recognize that the country was facing any issues and instead portrayed the idea that the country was prepared in light of any international crisis. But once he was elected for his third term, even his own party members began to question the party rhetoric and questioned the sustainability of the increasing subsidies programs and wastefulness of government, writes Diaz. During last week's press conference, Fernandez announced the government would reveal its plans in the face of looming economic and fuel concerns this week. Time has passed, and there is no new date to hear from the government on the package of measures. Diaz comments that Fernandez seems to be waiting until his 16th August inauguration to announce any plan, but that the reality is that it seems there is no real urgency to change anything.

Janice Jacobs visits JCE
US State Department and US Embassy officials met with Central Electoral Board (JCE) members to voice their concerns about identity fraud and to discuss collaboration. Deputy Assistant Secretary of State for Visa Services, Bureau of Consular Affairs, US Dept. of State, Janice Jacobs accompanied US Ambassador to the DR Robert Fannin and Consul Mike Schimmel when meeting with JCE president Julio Cesar Castanos, JCE judge John Guiliani and Protocol Director Alejandro Vicini at the JCE.
Jacobs, who served as Deputy Chief of Mission at the US Embassy in Santo Domingo in 2000, explained her visit: "I am here to visit the consular section, the Embassy and the Junta. We have spoken of consular affairs, such as citizen identification documents and fraud, and similar matters," she told the press. She said that there is tight collaboration between the US Consulate Department of Consular affairs and the JCE, "because we have the same interest in combating fraud."
During the meeting, the subject of undocumented foreigners in the country who are children of illegal residents was discussed. Castanos Guzman explained that as soon as the Migration Ruling is in effect, many Haitian nationals who live in the DR will be able to regularize their status if their parents can obtain legal residence in the DR. He said that Jacobs was pleased with the Libro de Extranjeria, the Foreigners Registry book where the offspring of foreigners whose parents are not legal residents or citizens are registered.
Castanos also informed that the JCE is in the process of creating biometric identification for Dominicans, and that this would be implemented once investigations into irregularities in the Somos contract for civil registry automation is finalized. He explained this would eradicate identity fraud.
The Listin Diario today editorializes on how Dominican taxpayers have funded millions of dollars in contracts to improve the civil registry, but these contracts have been rigged with unchecked corruption and have not produced the desired results of impeding forgery. The newspaper says that behind the problems is the impunity those found involved in fraud cases have enjoyed. "It is impossible that impunity continue to protect this disorder. This already transcends our borders and the weakness of our legal system is an embarrassment to us all," writes the Listin Diario.

Government audits show fraud
Maximo Castillo Salas, a former president of the Chamber of Accounts, the body in charge of auditing government, says that the government has filed away seven audits that found that government had been defrauded to the tune of RD$3 billion. He listed the following audits where major cases of fraud were detected:
Consorcio Somos and the Central Electoral Board - RD$100 million fraud in 2006.
EdeEste power distributor in 2004 that showed a RD$2.06 billion fraud.
Construction of the La Isabela Airport, fraud worth RD$137 million.
TecSol solar power company with the Ministry of Industry and Commerce and the Air Force - fraud for RD$3.6 million.
Constructora Ozorio - fraud for RD$100 million.
Ciramar and Las Calderas dockyard, Bani - fraud for RD$232 million.
Castillo says that of all the fraud cases revealed by audits since 2002, the government has only acted in the case of the Plan de Renovacion Vehicular (Plan Renove). He criticized the way in which government had acted selectively in that case, "excluding those responsible, and including innocents."

Wage increase
Deputies believe that workers in the private and public sector deserve a wage increase equivalent to the percentage of purchasing power lost as a result of increased inflation. Spokesman for the PRD deputies Cristian Paredes said that the wage increase was imperative for workers. Deputies are also asking the government to make inflation cutting plans as well as urging the government to reduce the taxes on fuel, to compensate for rising oil prices. Deputy Uceta nevertheless commented, "Really we have to think well, because it will be worth nothing if wages are increased, and a month later all consumer products are increased. Nothing would be accomplished".

Eliminating small parties
PLD legislator Alejandro Montas says that the next Constitutional reform should eliminate the plethora of small political parties, on the grounds that they add to the culture of clientilism in the political arena. Montas said that while there are exceptions, at election time most of the smaller parties just choose to form alliances with the bigger parties as a way of achieving monetary gain. The electoral law enables parties that do so to maintain their legal status, even if they do not meet the minimum vote count.

Crafts make money
Juan Pablo Gonzalez from the Dominican Integrated Development Institute (IDDI) says that the Dominican handicraft sector sells US$310 million in goods yearly, but the irony is that 80% of those goods actually come from foreign countries. He explained that in Puerto Plata alone US$40 million worth of goods is sold each year. Gonzalez says that IDDI is currently working on increasing local production and marketing of Dominican made crafts.

All-Star Game tonight
The stars are out tonight as Major League Baseball helps bid New York's Yankee stadium a proper farewell. There is much excitement in the air, partly because of the Stadium's farewell party and because of the collection of MLB's best and brightest stars. Last night's Home Run Derby was a thrilling spectacle for all baseball fans, as slugger Josh Hamilton, a relative unknown, blasted 28 first-round homeruns in the Home Run Derby Competition to set a new All-Star record. At one point during Hamilton's swat fest David "Big Papi" Ortiz, who is among the All-Star Home Run Derby record holders, was seen saying "wow!" So stunned was Ortiz that he walked off the baseball field and into the dugout in amazement and as a sign of respect to Hamilton. In all, 12 Dominican ball players have made it to the mid-season classic, including Alex Rodriguez, Manny Ramirez, David Ortiz, Alfonso Soriano, Aramis Ramirez, Albert Pujols, Edinson Volquez, Ervin Santana, Carlos Marmol, Miguel Tejada and Cristian Guzman. Since the 1950s, a total of 55 Dominicans have been selected to participate in All-Star games.

Tuesday sales
Plaza Lama advertises carrots for RD$5.45lb, potatoes for RD$12.95lb, red onions for RD$6.95lb, cucumbers for RD$4.95lb, beets for RD$3.95lb, bell peppers for RD$16.95lb, cantaloupe for RD$16.95ea, red beans for RD$24.95lb, yucca for RD$17.95lb.
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