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Daily News - Wednesday, 23 July 2008

President rewards good students
President Leonel Fernandez has instructed the Ministry of Education and the head of the National Housing Institute (INVI) to identify the families of students that received awards yesterday who live in extreme poverty and to build them new houses. This announcement was made during an awards ceremony for 193 meritorious students from all over the country. The top student, Yanna Mariel Polonia from La Vega, carried a 99.5 average throughout her four years of high school. Nataly Gonzalez from Monte Plata carried a 98.51 average; Alejandro Vasquez had a 97.57 average and Scarlet Vanessa Garcia Caro scored a 97.08 average.
During the ceremony, held at the Independence Hall at the Ministry of Armed Forces, the President declared that although he said last Thursday that no new constructions were to be initiated as part of his 2008 Austerity Program, he could not remain indifferent after seeing that many of the outstanding students lived in sub-standard conditions. He cited the case of Jose Lucia Beriguete from San Juan de la Maguana who amassed a 95.48 average while working on farms. Fernandez said "If, in the middle of so many limitations, they have become such excellent students, I wonder what will happen when they have a house with decent conditions, with the possibilities to think and study... We are nurturing future Nobel Prize winners!" Fernandez was accompanied by his wife Margarita Cedeno and the Ministers of Education and Higher Education and Technology Alejandrina German and Ligia Amada Melo.
Each student received a computer, most of which were donated by the Ministry of Education and the Dominican Telecommunications Institute (Indotel).

President chairs Chevron meeting
President Leonel Fernandez met with both parties involved in the dispute between the Chevron-Texaco company and the Petroleum Transporters Association (Asociacion de Empresas Transportadoras de Petroleo) and the tanker drivers association (Sindicato Autonomo de Choferes Transportadores de Petroleo y sus Afines) cartels that had blockaded the access to the Dominican Refinery (Refidomsa) since 9 June. The cartels seek a two-year extension of their contracts. Chevron has been upholding its right to choose who carries their cargo. A Court had ordered the end to the blockade and a RD$100,000 per day penalty if it was maintained, but the cartels had said publicly they would not heed the order.
The evening meeting took place after the cartels' 11am announcement that they would remove the blockade to Chevron tankers loading fuel for their 170 Texaco stations at the Dominican Petroleum Refinery. The meeting at the Presidency began at 8:35pm and ended at 10:15pm. President Fernandez met separately with Chevron Caribbean representatives. No decision was reached, and a new meeting was called for next Tuesday.
Taking part in the meeting were tanker representatives Nelson Crespo, Rosa Margarita Sanchez, Frank Quezada and Jose David Vietes. Clemente Morillo represented the SACTPA tanker drivers. For Chevron-Texaco were Rosanna Grullon, Hector Infante and German Santos. Rafael Abreu, president of the National Confederation of Labor Unions (CNUS), was also present.
In addition to President Fernandez, representing the government were Vice President Rafael Alburquerque, Industry & Commerce Minister Melanio Paredes, Administrative Minister of the Presidency Luis Manuel Bonetti, and former president of the Dominican Petroleum Refinery and 2008 presidential campaign manager Francisco Javier Garcia.
After the meeting, Industry & Commerce Minister Melanio Paredes told the press: "Chevron-Texaco has shown that it is interested in listening to all the proposals that are out there, including those from the transport unions and the drivers' union, while at the same time they have made and will continue to make proposals that will allow for a joining of positions." Paredes said that "we hope that this attitude of an open dialogue that has been initiated will continue and we can announce to the nation that a definitive solution has been reached that will bring peace and tranquility to the citizenry." At the end of the meeting, Morillo expressed his optimism the impasse would be solved in their favor. "We are giving time to wait for Chevron-Texaco's decision about the cancellation of 25 contracts that affect 50 drivers," said Morillo, as reported in Hoy. The tanker cartels had controlled access to the Refinery for 43 days.

Tax Office offers incentives
The Tax Department (DGII) is offering tax incentives to foreign companies that bring new technologies into the country. They are offering income tax exemption for companies that come with projects that will develop products, conduct research and develop technology as well as training personnel and protecting the environment. Anyone offering consulting services in these areas will also be exonerated from paying income tax, according to Articles 47 and 48 of Law 392-07 on Competitiveness and Innovation. The DGII has also circulated a new resolution that deals with the promotion of industrial innovation and modernization. In order to make the most of the new incentives, taxpayers should submit their "Resolution of Definitive Qualification" emitted by Proindustria, and formalize the request for exoneration from IRS taxes, explicitly indicating what type of services they will contract overseas, the amount and time for said services and submitting a copy of the contract.
There are other benefits that are related to the processes of renovation and modernization over a five-year period and covered in Article 50 of the law on Competitiveness and Innovation.

Standard & Poor's ups rating
The Standard & Poor's agency has improved the Dominican Republic's credit rating to B+B, and taken the DR off of the non-trustworthy list of nations where it was placed last 8 February with negative implications due to the uncertainty surrounding payments that had to be made in the Sun Land case between March and July for a total of US$130 million. According to most of today's newspapers, the risk assessment firm reported that the promissory payment notes related to the Sun Land case, drawn up for US$130 million, should have been paid in September last year, but were cleaned up this year, when they were bought by foreign investors and then acquired by an unnamed Dominican bank last February.
The firm points out that the forecast for the Dominican Republic is negative in the near future due to an increase in the fiscal deficit in the current accounts which has reduced the country's external liquidity.
The report also points out that the forecast reflects the increased risk due to the lack of liquidity and the stress due to macro-economic problems that could damage the Dominican Republic's credit level in the future.
Standard & Poor's says that a successful implementation of economic policies aimed at reducing the country's external and fiscal vulnerabilities without causing a decline in the Dominican economy could have a good result, and therefore they have changed their estimate from negative to 'stable'.
The risk assessment firm pointed out that recent fiscal plans announced by the authorities, including controls on public spending, could lower the fiscal deficit to 4% of the GDP this year and perhaps to a 3.4% for next year, compared to the 6% that was forecast without any fiscal corrections.

Overview by three economists
Economists Carlos Despradel, Miguel Ceara Hatton and Isidoro Santana are advocates of a downsizing of the state to help the nation deal with the rising oil and food prices. In an interview with Hoy, the economists shared their ideas on what is wrong and how the economy could be improved.
Carlos Despradel, a former Central Bank governor, expressed his concern about the Central Bank's use of US$430 million of its international reserves to compensate for increasing imports. "We should only purchase and consume what we have enough foreign exchange to pay for," said Despradel. "When we start playing with the exchange rate and capital flees, there will be less foreign exchange to continue importing, so playing with the exchange rate now is very risky."
"Given the country's institutional weakness, letting the exchange rate float could create a very complicated situation," said Ceara, who says that the time to let the market adjust the currency has passed. Santana, nevertheless, says that the DR is expensive because its currency is overvalued. He backed the restrictive monetary policies now in place by the Central Bank. Santana says that it has been a mistake to allow the Dominican currency to become overvalued.
Ceara spoke out against the government taking on more PetroCaribe debt. In his opinion, the government should be investing these 'savings' in areas that generate foreign exchange to pay back the debt. If not, he explained, we are just creating another problem in the long term.
Santana forecast that inflation would reach 12% this year, and the growth in the GDP would be around 5%, with a current account deficit well beyond the projections. Despradel said that President Fernandez had underestimated the deficit when he spoke of US$3.4 billion in his recent address to the nation. Despradel says the deficit is more like US$4.5 billion.
Ceara commented that on 28 December 2006 the government passed Law 497-06 on Austerity in Public Spending, which had the same guidelines that were brought back by President Fernandez in his recent announcement of measures to deal with the oil and food prices crisis, and that the government has so far ignored the measures contained in the 2006 Law, which undermines his public credibility.
Despradel said there is a general feeling that we have a hypertrophied state. "I personally feel that we should make the most of the situation and reduce and merge several government departments that have been created recently and have little reason for existing," said Despradel, mentioning the Ministries of Youth, Women and Higher Education. He also suggested merging all transport departments into one. He favors reducing the number of deputies to 100 and cutbacks in the country's foreign service officials. "And then you can have a state that is half of the size and will be much more efficient," he said. Ceara said the greatest dilemma now faced by Dominican society is how to dismantle the inefficiency, clientelism and corruption that have taken hold of politics in the DR.

Clinics say they will keep charging
The National Association of Private Clinics (Andeclip) has threatened to halt services to people holding cards from HMOs if the Superintendent of Health and Labor Risks (Sisalril) decides to admonish them for asking for pre-payments from patients needing intensive care or with catastrophic illnesses.
Andeclip president Rafael Mena told reporters from Diario Libre that the association is asking for support from doctors affiliated to the Dominican Medical Association (CMD).
Mena said that "What we are proposing to Sisalril is that patients cover just 25% of the intensive care or catastrophic illness costs."
The new stalemate between the clinics and Sisalril has arisen because Sisalril has put a RD$500,000 cap on catastrophic illnesses (such as cerebral hemorrhages and high-cost surgeries) and on intensive care.
The clinics allege that this cap - which includes doctor's fees, laboratory work, sonograms and medicines - is not sufficient.
Mena told reporters, "We have to find a solution, because when you have a patient who has cost a million and a half or two million pesos... you can't just turn him out onto the street. They (Sisalril) have to find a solution, and if they do not have a solution, then the patients will have to go to the public hospitals that can do this, or to facilities that receive government funding through their foundations."
As reported in Monday's Diario Libre, the superintendent of Sisalril, Fernando Caamano, warned the clinics that he would leave them out of the network of health care facilities and would impose heavy fines if they continued the practice of demanding pre-payments for cases of intensive care and catastrophic illness.
Caamano's reaction came after Andeclip announced that beginning this week they would suspend intensive care and catastrophic illness care at most clinics affiliated with Andeclip, and they would continue to charge patients the excess costs.
Today's newspapers report that the president of the Plaza de la Salud Foundation, Julio Amado Castanos Guzman, said that as far as possible, the Plaza de la Salud would continue providing services to patients with these needs. Castanos Guzman added that he understood that "the cap set by Sisalril was insufficient because just one week of intensive care was at least half a million pesos." Castanos Guzman said that he was going to suggest that Sisalril increase the cap to RD$800,000, but he added that even that amount is not sufficient.

Debts burden the electricity markets
Non-payment by some of the agencies that receive electricity on the spot market is affecting the electricity generators' economic operations, and this is causing a reduction in the level of service and even the possible closure of some of the generators that cannot maintain themselves financially because they are not receiving the necessary money to stay on-line in the next few days. Delays in payment have extended to 90 days or more in some cases. This information is contained in letters sent to the Superintendent of Electricity with copies sent to the National Energy Commission, the Coordinator of Electricity, the CDEEE and EGE-Haina. The letters call on the authorities to establish procedures that oblige participants in the electricity market to pay within the timeframe established in the law.
One of these letters, which reached Listin Diario, says that there is a financial "imbalance" because EGE-Haina does not pay some of the companies that purchase electricity on the spot market. Reports say that these debts reach RD$160 million. Among the complaints contained in the letter is a reference to a 139 KVA transmission line being build by EGE-Haina outside the framework of the law.

Contraband from Haiti hurts local crop
The Constanza Valley Garlic Growers Association is complaining that its members are about to lose more than 50,000 quintals of garlic from this year's crop, due to the enormous amount of garlic that is crossing the border from Haiti. This garlic is imported from China for eventual distribution in the Dominican Republic. So far, the authorities have not located the masterminds behind the scheme. Dominican garlic producers say that despite the fact that there is a specialized corps of military personnel on the frontier, trucks and containers full of garlic are crossing the border and heading to the markets of Santiago and Santo Domingo, and nobody sees that this is illegal competition for the local producers. According to the association, local garlic producers owe more than RD$1 billion to local banks and will go bankrupt if they cannot sell their product. Miguel Quezada, the head of the Constanza Garlic Farmers Association, told Listin Diario reporters that powerful people must be involved in the contraband since it is incomprehensible that a truck can pass through six check points without its illegal cargo being discovered.

Docs or supply salesmen?
A group of doctors at the Dario Contreras Hospital have distanced themselves from the irregular sale of surgical materials. Meanwhile, the hospital director said that only two doctors were involved in the fraudulent practice. Dr. Hector Quezada said that the two unnamed doctors being linked with the irregular sales will be transferred to other health care centers and that other people who were implicated will receive what amounts to a slap on the wrist. Dr. Quezada added that these doctors had not taken out equipment, and that they had made the mistake of selling materials to patients in the hospital itself. Dr. William Frias, a spokesman for the group of doctors, said that the doctors have clean records and have done a remarkable job. He rejected the idea that anything was done to harm the patients. Dominican Medical Association (CMD) president Dr. Waldo Ariel Suero met with staff yesterday and received documents proving the irregularities, which were originally reported by trauma department head Dr. Francisco Guillermo Garcia Lorenzo.

Caribe Tours protest
The nation's largest bus company, Caribe Tours, took dozens of their buses out of service yesterday to stage a protest in front of the offices of the OTTT, the government agency that assigns routes to different entities. The OTTT had rescinded the permission obtained by Caribe Tours to operate a direct connection between Santo Domingo and Cap-Haitien in northern Haiti, which was supposed to start this week. Caribe Tours says it has also had problems with the OTTT over its routes serving Jimani, Rio San Juan and Cabarete-Sosua. Caribe Tours buses tied up traffic for several blocks around the Quisqueya Stadium. In a press release, the company said that they have no idea why the OTTT has blocked their routes and demand fair competition on the granting and expansion of urban and inter-urban routes, diesel subsidies, and freedom to do business rules. The press release added that the governor of Dajabon Province, Arturo Socias has pressured the director of OTTT, Franklin Beltre into suspending the permits for the routes without any explanation. Previously, Caribe Tours had obtained permission for the route from the Armed Forces, the Customs Office, the OTTT and the corresponding authorities in Haiti. Caribe Tours says they have all the permits required for the routes from the Ministry of Foreign Relations, Ministry of Armed Forces, Customs Department and even the OTTTT and the competent authorities in Haiti.

PRD ratifies opposition to government
After some heated debates, the PRD has decided to continue its policy of refusing to engage with the Leonel Fernandez government. The party's political commission, whose meeting was postponed at least twice, according to Listin Diario, did approve sending a letter to President Fernandez, asking the government to assign a proportionate number of seats to PRD deputies at the Central American Parliament (Parlacen). The PRD aspires to at least eight seats at the parliament. One of those present during the meeting told Listin reporter Abel Guzman Then that a very heated discussion took place between PRD president Ramon Alburquerque and Carlos Gabriel Garcia, the spokesperson for former candidate Miguel Vargas Maldonado, and it nearly brought the meeting to a close. Miguel Vargas and former President Hipolito Mejia both favor a constructive opposition policy that would take the PRD to a dialogue on the main problems facing the nation, especially the present crisis brought on by the price of oil. Party leaders Alburquerque and Orlando Jorge Mera feel that the party should not enter into a dialogue that would legitimize the PLD government.

Narcs pay "tolls" to operate
Investigative reporters Minerva Isa and Eladio Pichardo continue their in-depth look at the drug business in some of Santo Domingo's poorest barrios. Their most recent report looks at how small-time narcotics dealers - 'narcos'- pay local law enforcement personnel a fee to operate in a given area. According to the article in today's Hoy, Isa and Pichardo say that although many citizens do not know for certain, they suspect that it is impossible for the "micro-traffic" of drugs to expand in such spectacular way without assistance from someone watching over the business. In the barrios, everyone knows about the collusion that goes on between police and drug enforcement agents who get their 'cuts' in return for enabling business to continue.
Community representatives and religious leaders are also aware of this and have complained about the situation on many occasions. Low salaries are a major contributing factor, they say.
According to the reporters, the collusion is possible thanks to the existence to criminals that are 'hooked up' to police or police turned criminals. This is in evidence when someone complains about one of the "micro-traffickers" to the National Drug Control Department (DNCD) and the criminal gets tipped off, because when there is a dragnet for such criminals they are never anywhere to be seen. The complicity is also reflected in the amount of drugs that is said to be confiscated, always less than the real amount, and the excess is sent back into the system. For the complete story go to:
www.hoy.com.do/el-pais/2008/7/23/240846/Los-narcos-pagan-peajes-para-facilitar-microtrafico

US$43 million for Luis Castillo
Twenty-four year old Luis Castillo has signed a five-year extension of his contract with the National Football League's San Diego Chargers, making him a NFL Superstar. Castillo will receive more than $19 million over the first two years of the contract and possibly more than $43 million over the lifetime of the deal.
Castillo was born in Brooklyn, New York to a Dominican mother, herself a New York success story for her Dominican hair product import business. Castillo has kept close touch with his Dominican family and hosts a youth football clinic on his trips to the DR.
The San Diego Union-Tribune reports that this makes Castillo the first of the Chargers' high-profile players to sign a long-term extension since the team began its recent push to lock up a number of star players whose contracts are due to expire in the next few years. Castillo's contract was due to expire after the 2009 season but now runs through 2014.
www.chargers.com/team/roster/luis-castillo.htm
www.signonsandiego.com/sports/chargers/20080723-9999-1s23chargers.html

Wednesday sales
El Nacional supermarket is offering 40% off all tomato varieties and 20% off other fruits and vegetables.
Carrefour is advertising its Wednesday fruits and vegetable sale with plantains for RD$7.55ea, avocados for RD$5.90ea, pineapples for RD$17.95ea, watermelon for RD$6.95lb, cantaloupes for RD$20.95ea, and Keith mangos for RD$7.95ea.
 
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