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Daily News - Friday, 12 September 2008

Fernandez sees damage
President Leonel Fernandez and high-ranking government officials visited the provinces of San Jose de Ocoa, Azua and Barahona, which were affected by the heavy rainfall that followed the path of Hurricane Ike, despite the fact that Ike did not hit the DR directly. President Fernandez has promised government aid for the communities and citizens affected. Fernandez ordered officials to speed up repair work on roads and bridges and assistance to people who are still in shelters. Hoy writes that Fernandez traveled to the affected areas by helicopter and spoke with homeless families at each stop. The President is asking citizens to be patient, and reassured families that the government would help build new homes. Work committees from the dams department (INDHRI), the Ministry of Environment and Ministry of Public Works are assisting in the recovery efforts.

Aid to Haiti ends
The medical mission sent to Haiti, which stayed on for two extra days, as a result of the damage caused by Hurricanes Gustav, Hanna and Ike, is due to return to the DR today. The mission included 65 volunteers and 17 medical professionals.

ADN gets its funds back
The Banco de Reservas will continue to provide funds for the Santo Domingo city hall (ADN), ending a dispute over arrears in payment for the Fenatrano minibus transport union that has defaulted on payments for bus purchases. The city municipality in 2004 had signed to guarantee the RD$400 million loan signed by the former mayor, the PRD's Johnny Ventura and authorized by then President Hipolito Mejia. The loan had grown to over RD$500 million including bank penalties and accumulated interest. Hacienda Minister Vicente Bengoa said the BanReservas would reopen the ADN line of credit.

End to Villa Altagracia impasse
The Ministry of Environment found property that can be used for the Villa Altagracia garbage dump, as reported in the Listin Diario. Environment Minister Jaime David Fernandez Mirabal, authorized the use of property located in the Nandita area, on the outskirts of Villa Altagracia. The Mayor of Villa Altagracia had gone to the extreme of dumping garbage on the Duarte Highway and private property of Consorcio Citricos Dominicanos, demanding that the latter facilitate State Sugar Council land that had been leased to the company.

11 deputy ministers per minister
The Fernandez administration has appointed 350 new government officials to the cabinet. The payroll in general has gone from 370,828 government officials in 2004 (at the end of the Mejia administration) to 406,903 (now under the Fernandez administration). According to a report in Clave newspaper, President Fernandez has appointed more than 214 deputy ministers and confirmed more than 150 deputy general directors since 16 August, or an average of 11 deputy ministers for each ministry. Wages range from RD$50,000 to RD$150,000 (plus expenses) or over RD$130 million to RD$260 million on the payroll.
Ministries with a higher than average number of deputy ministers include the Ministry of Sports with 20 ministers, Interior and Police with 15, Youth and Women ministries with 14 deputy ministers each, and Education with 12. The practice has been to simply add deputy ministers when there has been a change of command at the ministry. The additional deputy ministers are in violation of the ministries' structure. Civil society, academic and business groups like the Institutionalism and Justice Foundation, Citizen Participation, the Juan Montalvo Study Center and the Young Entrepreneurs Association (ANJE) have described the appointments as excessive.
Clave newspaper observes that the appointments contradict what President Leonel Fernandez said during his address to the nation on 17 July when he announced an austerity plan for the second half of the year. At the time he announced a freeze on the government payroll.
Clave reports that government spending (including payroll, operational expenses and payment of debts) increased from RD$97.67 billion to RD$130.69 billion, or 33.8% from 22 August 2007 compared to the same period in 2008. Tax collections were only up 11%, according to a report from the Ministry of Economy published by the Ministry of Hacienda.

Defunct government departments
Several government departments have just become places to park people with political influence, writes Fausto Rosario in Clave Digital in a report on the many defunct offices that still have large payrolls, at the expense of taxpayers. The departments mentioned include the Commission for the Reform of Public Enterprise (CREP) that was created during the privatization push during President Fernandez's first term (1996-2000). The companies were privatized, but instead of disappearing, the institution now has 96 employees, up from 86 when it was actually operating. The former Dominican Electricity Corporation was divested of its role and should have been dismantled. When it was the sole department in charge of all government-owned power services, it had 6,000 employees. Its staff has not been reduced.
The State Sugar Council also was divested of its functions and is currently a mere real estate department, but it employs a staff of 1,089 with RD$13.4 million in payroll. CORDE, the former entity that grouped government enterprises, which no longer exist, has 60 employees and a RD$1.2 million payroll. The Dominican Sugar Institute, also without a role, has 30 people on its staff and a RD$350,000 payroll. Others of questionable worth are the Department for Price Control, the National Textile Industry (Industria Nacional de la Aguja), the Dominican Agrarian Institute, the Environmental Policies Cabinet, the Council of Economic Advisors to the President, and the Center for Government Information, all of which have reduced roles compared to their payrolls.
Rosario comments that the 47 institutions with questionable roles currently have 23,000 people on their staff and RD$300 million in payroll.

Deficit with US grows
The trade deficit between the US and the DR was at US$1.6 billion for the first seven months of year. The continued deficit in trade (when imports are higher than exports) is raising concerns about the DR-CAFTA agreement and its benefits for the DR. Critics say that these numbers contradict trends for other Latin American nations, which have shown a surplus in trade with the US during the same period. The rate at which the deficit is growing is also causing deep concern. During the first seven months of the year the deficit grew by 83.7%. For the same period in 2007 the deficit was only US$863 million. According to Hoy, there was a 19.5% increase in the value of imports, from US$3.3 billion to US$3.94 billion and a reduction in the value of exports, which went from US$2.431 billion to US$3.4 billion. Since DR-CAFTA went into effect in March 2007, a US$3.14 billion trade deficit has been accumulated over the 17-month period.
Hoy economic reporter Luis H. Vargas writes that economic policies in place have increased domestic costs making exports more expensive, at a time when the cost of imports has declined.
Vargas quotes a study by the US Commerce Department indicating the value of DR export values slipped from US$2.43 billion to US$2.35 billion. This downward trend dates to 2006 when export values dropped from US$4.53 billion in 2006 to US$4.21 billion in 2007. Meanwhile imports have increased at a faster pace. Vargas says that imports were valued at US$3.29 billion between January-July 2007 and grew to US$3.98 billion for the same period in 2008. This compared to the previous year increases, when imports increased from US$5.35 billion in 2006 to US$6.08 billion in 2007.

US Commerce secretary expected
US Commerce Secretary Carlos Gutierrez is expected in the DR this month. He is heading a business delegation of US exporters on a tour of the DR, Nicaragua and Costa Rica, starting 28 September. The US is pleased with the agreement. "CAFTA-DR is transforming the competitiveness of the Western Hemisphere in the global marketplace," said Gutierrez. "Since implementation two years ago, the United States has reversed our previous trade deficit to a current trade surplus of $3.7 billion in 2007 with the CAFTA-DR countries. CAFTA-DR has expanded openness and transparency in the region, which has improved the trade and investment climate for US companies. I look forward to leading US exporters on this business development mission to the Dominican Republic, Nicaragua and Costa Rica to capitalize on the opportunities that CAFTA-DR offers to US industry and agriculture."

DR will sign the EPA
Despite continued concerns that have threatened to derail the European Union/Cariforum European Partnership Agreement (EPA), the Dominican Republic and 12 other nations have decided to sign the agreement. In a Caribbean Heads of Government Summit held in Barbados, islanders decided on a 15 October signing date, but Foreign Relations Minister Carlos Morales said that that late date would hardly leave time for its programmed implementation on 31 October.
Guyana, a staunch opponent of the agreement, decided not to sign, along with Haiti. Guyana has decided to enter into a "trade in goods only" agreement with the EU, while Haiti may consider signing in the future. Jamaica, Trinidad and Tobago, Barbados (host of the special summit and expected venue for the formal signing), Suriname, St Vincent and the Grenadines, Dominica, Antigua and Barbuda, St Kitts and Nevis, The Bahamas, Belize, as well as Grenada and St Lucia all agreed to sign the agreement.
For continued coverage of the EPA click here: www.dr1.com/trade

US$400 million for airports
Latin American Airport Holdings (LAAH recently purchased Aerodom's rights to manage the Las Americas (SDQ), Puerto Plata (POP), La Isabela (JBQ), Samana (AZS) and Barahona (BRX) international airports for US$400 million and committed to invest US$1 billion in improvements over the next five years. Aerodom and LAAH officials met with President Leonel Fernandez. Advent International (LAAH's parent company) president Juan Carlos Torres said Advent said the current stability was the key factor in the investment decision. He said that negotiations took 14 months. The airport management contract still has another 20 years to go.

Parties don't declare
Fourteen of the 22 political parties and movements that participated in the 16 May presidential elections have yet to submit financial reports to the Central Electoral Board (JCE), detailing spending costs for the 2008 electoral campaign. The list includes the PLD, PRD, BIS and a long list of minor parties. Only the PRSC, PQDC, PAP, PLRD, UDC, PHD, PRN and Moda have handed in their reports. According to DR electoral law, parties have a three-month time limit to submit their financial reports after the elections.

Bancredito judgments
Judges have sentenced executives from the collapsed bank Bancredito Arturo Pellerano and Juan Felipe Mendoza to eight years in jail and imposed a RD$2.5 million fine for defrauding clients to the tune of RD$20 billion. The pair had originally been sentenced to three years in jail after a 2006 ruling. This sentence follows an earlier one for 10-year prison sentences for executives of another collapsed bank, Baninter.

Lubrano will wait
Judge Francisco Mejia Angomas has postponed hearing former Baninter executive Vivian Lubrano de Castillo's house arrest petition until 26 September. Lubrano has been sentenced to five years in jail for her role in the Baninter banking scandal, but claims to have serious health problems and is asking to serve her five years under house arrest. Meanwhile, she is hospitalized at the Abel Gonzalez medical center.

Senator's son posts bail
Martin Sterling Villalon, son of Senator Noe Sterling Vasquez (Barahona-PRSC) posted RD$1 million bail and must report to a judge every Monday as part of his bail conditions. Prosecutors have also brought charges against Kelvin Santana, while Domingo Marmolejos was sent to jail for18 months in preventive custody. According to reports, officials were able to connect Sterling to the 4 August massacre in Bani because of phone records. Senator Noe Sterling Vasquez is defending his son's innocence, saying the reason there was a registered call was because the drug traffickers wanted to rent a boat from his son, and that his son refused.
At the court yesterday, the senator said that the case against his son "had been prepared to protect those they know committed the killing," as reported in the Listin Diario. He said his son is a victim of "a cover up to protect military and high-ranking police that are involved in drug trafficking."
The National Police is also denying that Gonzalez was ever a police officer, explaining that at one point he was a cadet, but was released after his first year. In related news, Diario Libre is reporting that one of the men investigated for the Bani massacre has been found dead. The body of Spanish national Adolfo Justo Cervantes Areyena was found with nine shotgun wounds. Adding another twist to the case is the revelation that Cervantes had been investigated for the brutal murder of DNCD officer Guillermo Tejada Krawinkle. Tejada was shot in the head as he was coming out of a barbershop in San Cristobal. No one has been arrested in this murder.
Police have investigated a total of 161 people in relation to this case, 31 of them in the last 72 hours. Also, 13 people have been sent to jail, charges have been brought against 12 people and officials have announced 63 raids on different homes and establishments. The murder of the seven men has awoken a sleeping giant in the DR with open accusations of complicity of the authorities with drug dealers. Peravia Senator Wilton Guerrero has been openly critical of the authorities, risking his own personal safety by naming and alleging the participation of many high-ranking officials.
Senator Guerrero feels that there is still complicity between the authorities and the criminals. In an interview with investigative TV journalist Nuria Piera, he said that the country's chief prosecutor Radhames Jimenez Pena "is so good, he is not good for anything."
Watch the interview with Wilton Guerrero at www.nuria.com.do

Diaz plays it smart
Olympic champion Felix Diaz has invested his RD$7 million prize awarded by the government and will use the RD$600,000 prize he received from Tricom to take care of his present needs. Diaz will continue to live in the Barquita neighborhood where he grew up. Diaz said that he had a family and had to secure his present and his future. Listin Diario writes that Diaz bought a one-year certificate and that he will also purchase a home for his parents, who currently live with him.

DR wins gold in shooting
The Dominican team, made up of Manuel Figuereo Feliz, Wadih Chamoun and Carlos Garcia, has won gold at the 38th Annual Caribbean Shooting Cup, finishing with 1,648 points. Martinique won silver, and Puerto Rico won third place.
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