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Daily News - Monday, 25 August 2008

Felix Diaz brings gold to DR
President Leonel Fernandez enjoyed watching the bout of Dominican boxer Felix Diaz versus Thailand's Manus Boonjumnong at his home in Naco. As soon as Diaz won a gold medal in the Beijing Olympics, he told reporters he ordered the streets of Diaz's Santo Domingo barrio, Sabana Perdida, to be paved as soon as possible in celebration. Fernandez also provided the boxer's trainers with RD$1 million each. Felix Diaz will receive RD$7 million, a new house and a new car for his efforts. His parents nevertheless say that now it is time that he finishes high school. He quit in 10th grade to dedicate himself to boxing. Diaz won all his fights in Beijing.
Diaz won the Junior Welterweight division (140 pounds) by a resounding 12-4 score over Thailand's Manus Boonjumnong, the world champion and number one seed in the Olympic tournament. Diaz had won bronze in the Rio de Janeiro Pan Am Games. Coincidentally, another Felix, Felix Sanchez, had won the DR's first gold medal ever in the Athens 2004 Olympics. Diaz's medal is especially significant because contrary to Felix Sanchez, who was US-trained, Diaz is 100% trained in the DR. Pedro Nolasco became the first Dominican Olympic medalist when he won a bronze in boxing in the 1994 Los Angeles Olympics.
The DR's other medal winner at these Olympics, Yulis Gabriel Mercedes who won silver in taekwondo (by judges' decision), will receive over RD$5 million and a new car. Weightlifter Yuderkis Contreras was 5th, and table tennis player Nieves Xue made the finals.
The two medals placed the DR 46th, among 204 countries participating in the Olympics.
Felix Diaz and Gabriel Mercedes arrive tomorrow at 2:30pm and the Ministry of Sports is organizing a big welcome.

Cardinal receives support
Civil society groups, lawyers, sports and neighborhood watch organizations are calling on the government to re-structure existing crime prevention and crime fighting programs in order to genuinely combat the evil. Servio Tulio Castanos, vice-president of the Institutionalism and Justice Foundation (Finjus), former prosecutor Virgilio Bello Rosa, community leaders Luis Suliz, Johnny Peguero and Pedro Urena all agreed with Cardinal Nicolas de Jesus Lopez Rodriguez's definition of the problems arising from drug trafficking, crime and the farming sector.
The Finjus official called on the Attorney General, the Minister of the Interior and of the Police to form a national alliance with the representatives of the municipalities, schoolteachers and other sectors in order to determine the origin of the violence and seek a viable solution. On Saturday Cardinal Lopez Rodriguez called on the government to take care of the countryside, in order to produce more food; to combat crime and drug trafficking, because he felt that there needed to be a clear strong and powerful response to these problems. He said that the government needed to take a strong position in relation to all the criminals in the country and those who come from abroad. The prelate gave his statement four weeks after seven people were killed in a conflict between drug traffickers near Bani, according to the report given to President Fernandez.

Foreign investment issues
Despite the fact that foreign investment in the Dominican Republic has increased over the past few years, this could have grown even more if there were better judicial guarantees and less red tape. Both issues, combined with the lack of reliability and reasonable pricing of electricity, place the country at a disadvantage compared to other nations and as a result, lead to the loss of millions in capital from businesses that prefer not to venture into the local market. According to Central Bank figures, foreign investment has reached US$1.69 billion, of which US$723.3 million came from the real estate sector. Tourism was in second place with US$445 million, followed by telecommunications with US$417 million. For the first quarter of this year, the flow of capital that arrived from overseas was US$1.06 billion and according to estimates from the director of the Foreign Investment Enterprises Association (ASIEX), Pablo Linares, the total could reach US$2.5 billion by the end of the year.
Linares reminded Diario Libre reporters that, "the first thing an investor asks for is macro-economic stability, an exchange rate that reflects the reality of the market, and an important part of this is judicial and personal security." Even though he understands that in the Dominican case there is judicial security, he said that one cannot fail to mention the Chevron case where the company is affected by a conflict with the tanker and driver unions that have a monopoly on transporting the fuel. He warned, "We must always be careful of the image that is projected overseas and affects efforts that are being made to attract investments."

217 Police officers retired
President Leonel Fernandez retired 217 National Police officers last Sunday. Among those sent to retirement are 71 colonels, 58 lieutenant colonels and 88 majors. The officers were retired in accordance with Institutional Law 96-04.

Industrialists want less spending
Industrialists from Haina feel that the monetary measures adopted up until now have reached their limit. They argue that the government now needs to reduce public spending. The president and spokesman for the Haina Industrial Association, Rafael Alvarez Crespo, said that if the government wants to maintain macro-economic stability it will have to create a balance between monetary and fiscal measures.
He said that reducing the money in circulation is not enough and by reducing expenditures the government could have the same effect as maintaining macro-economic stability.
Alvarez Crespo made these comments as he was asked about the increase in interest rates announced by the Central Bank last Friday. He said that he felt that these measures were temporary in nature.
The Central Bank announced a 9% yield on 180-day certificates of deposit, 12% on 365-day CDs, 13% on 18-month CDs, 14% on 24-month CDs, 16% on 30-month CDs, and 18% on 36-month CDs.

Diaz blames Codacsa for holes
The Minister of Public Works, Victor Diaz Rua, attributes the potholes in the Las Americas Highway to the failure of the Codacsa Company to maintain the roadway in a proper fashion. Codacsa is the concession-holder for the toll road between Santo Domingo and La Romana. According to the minister, Codacsa "has collected more than a billion pesos during the seven years of the contract and has spent less than RD$35 million on repairs and maintenance." According to Diaz, "the contract obliges the company to maintain the road between Duarte Bridge and the airport and from there to La Romana." Diaz Rua promised that the ministry would rectify the situation. He said that the ministry has a plan to pave and repair potholes as soon as a ship loaded with AC-30 (tar) arrives and the rains subside.

Many don't get power bills
About 35% of electricity consumers do not get billed by the Electricity Distributors (Edes), according to a study released by the Dominican Corporation of State-owned Electricity Companies CDEEE). The study shows that the losses in the areas do not belong to the Program for the Reduction of Blackouts (PRA), which reached 47.17%, about 7% more than in January, when losses were said to be 37%. This means that the EDEs' financial losses increased by 20% in the first five months of the year. In March, two months before the elections, the sector began to show the first signs of deterioration. The reports show that the losses were close to 42% that month while there was much better service in the areas served by PRA. In order to get an idea of what happened, a look at May will be sufficient. In May the EDEs collected US$85.35 million, but in May 2007 they had collected US$86.7 million, a loss of 1.55% in 2008. In reality, the report from the CDEEE says that losses for the first six months were 34.24%, when the authorities had projected a 31% loss. The results for the first five months of the year showed a Cash Recovery Index (CRI) of 61%, but the projections had been for a CRI of 63.15%.

Electricity causes alarm
Efforts by the Fernandez administration to provide reliable and competitively priced electricity have failed. Blackouts are back, causing major inconveniences and raising the cost of doing business in the DR. Companies can no longer cope with using their back-up power generators because the rising cost of diesel has made operating them too expensive. The costs can no longer just be passed on to consumers. The companies fear that consumers would just stop buying the goods. "The impact of the blackouts on the operational costs of companies is very high, because one has to maintain a self-generation system, not an emergency system as originally designed, and more so with the high cost of fuel today," Pedro Perez of the National Organization of Shopping Malls told Diario Libre. The biggest complaint of all is that electricity bills do not come down, despite the blackouts. The blackouts mean additional costs just for staying in business. Ignacio Mendez of the Federation of Industries (FEI) forecast that many companies would simply go out of business. "This situation is going to cause bankruptcy in many companies that will only make the economic situation worse when they stop paying taxes and fire their employees," he said.
For the Association of Herrera Industries, the Dominican Republic is experiencing a disastrous situation in the electricity sector. They warned about "a collapse with unforeseeable economic and social consequences, due to the deterioration of the electricity supply, the financial blackouts and the absence of new investments in generation."
Over the past few weeks there have been protests in East and North Santo Domingo, in Santiago, in Loma de Cabrera, and other cities around the country with a toll of at least three injured, many arrested, and burned tires and garbage in the streets.
Electricity service got worse over the weekend in Santiago and other cities in the Cibao Valley, but Ede-Norte executives reiterated that the blackouts were the result of low water levels in the Tavera and Lopez-Angostura dams. Meanwhile, Santiago Chamber of Commerce and Industry president Ricardo Fondeur called on the government to give the highest priority to the electricity superhighway because it will provide a solution to the problem.

Home sales down by 70%
The sale of living quarters, single-family houses, condominiums and apartments has fallen by 70% this year over last. Meanwhile, construction has tailed off by a 30% to 40% margin in 2008. According to Listin Diario, the cost of construction materials used in housing construction increased by 17.5% from January to August, according to statistics from the Dominican Chamber for Construction. In July this year the cost of materials for single-family dwellings increased 19.5% from September 2007. The plight of the construction sector was outlined for the editors of Listin Diario by Diego de Moya, the president of the Chamber for Construction, Christian Maluf Khoury, vice-president and Jaime Gonzalez the president of the Dominican Association of Builders and Promoters (ACOPROVI). They said that a country's development is measured by its infrastructure. They said that since 1997, the cost of building supplies has risen by 349%, and just over the past eight months a bundle of re-bar had increased 100% in price. According to these experts, an important factor in the fall in home sales is the rise in interest rates, which have gone from 10% to 22% (and 24% in some cases). According to de Moya, a 1% increase in the interest rate on home loans is equal to a 5% reduction in the debt capacity of a potential homebuyer. Other factors driving home sales down are transport costs and increased salaries for construction workers, as well as the huge increase in the price of cement.

Rains forecast
Thunderstorms and rains are forecast for the DR. Tropical Depression Seven passing to the south of the DR is expected to bring intense rains to southwestern parts of the country, primarily the Pedernales area. The government issued a tropical storm warning for the South coast westward from Santo Domingo to Haiti at 11am.
The Emergency Operations Center (COE) issued a red alert for the provinces of the southwestern region, especially Pedernales, Barahona and Independencia. COE director Juan Manuel Mendez announced, in addition, Yellow Alerts for the provinces of San Cristobal, Azua, San Jose de Ocoa, San Juan de la Maguana, Bahoruco, Monte Plata, Peravia, Santo Domingo and the National District. There is a Green Alert for the provinces of El Seibo, La Altagracia, La Romana, San Pedro de Macoris, Hato Mayor, Monte Plata, Maria Trinidad Sanchez and Duarte.
The Weather Department also issued small craft warnings for sailors along the shoreline.
For a discussion, see www.dr1.com/forums/weather-beyond/78769-tropical-waves-areas-investigation.html
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