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Daily News - Tuesday, 09 December 2008

Fernandez's optimism
Last night's speech by President Leonel Fernandez was awaited with high expectations, partly due to the fact that the President had not commented publicly about the current pressing issues since his inauguration on 16 August. Fernandez spoke about the ways in which his government would meet the challenges of the global financial crisis.
Fernandez announced that the DR would be signing a new agreement with the IMF, which would provide a guarantee of continued stability and confidence in Dominican markets. Fernandez also clarified that when the IMF and Dominican politicians speak about "fiscal adjustments" they mean reducing subsidies and focalizing spending - not increasing taxes. The President emphasized that there would not be a new set of tax increases. He also forecast a decline in interest rates for next year.
The President said that the nation would have access to US$500 million from the Inter-American Development Bank's Liquidity Program for Growth Sustainability program.
The President has his eyes on the RD$68 billion accumulated in workers pension plans to launch construction programs aimed at creating hundreds of jobs. He said he was sending a bill to Congress that would authorize the government to use the funds to build houses for workers and low-income families and for infrastructure projects.
President Leonel Fernandez said that his priorities included the construction of the El Coral highway that would shorten travel from San Pedro de Macoris to Punta Cana, the North Coast Boulevard, that would shorten travel time to the tourist area of Las Terrenas, the Duarte Highway Corridor, the Viadom project, the second line of the Santo Domingo Metro and the train to Haina. He said these projects would be contracted to the private sector and would generate much-needed jobs.
Fernandez said he was optimistic that the economic plans underway would keep inflation at 7% in 2009.
In the area of energy, Fernandez mentioned investors from the United Arab Emirates with an interest in building a natural gas terminal on the north coast to serve the domestic market and for export to the United States. He said a UAE mission would come to look into the additional possibility of installing a 500MW power plant.
President Fernandez is also optimistic that foreign investment will continue. He spoke of renewed production ventures by Canadian company Gildan and several start-up tourism investments. He mentioned Punta Perla and Vista Cana in the Punta Cana area and Nuevo La Romana between La Romana and San Pedro de Macoris.

DR will sign with IMF
Central Bank governor Hector Valdez Albizu has announced that the DR will sign a post-program monitoring agreement with the International Monetary Fund, following the completion of the three-year Stand-by Arrangement in January 2008. The DR's Letter of Intent will be reviewed by IMF managing director, Dominique Strauss-Kahn, on 12 January. Strauss-Kahn was in the DR yesterday as part of a Central American and Caribbean tour, and he met with President Leonel Fernandez and his economic team at the Presidential Palace.
Strauss-Kahn spoke after his meeting with Fernandez, saying that the DR is doing well within the context of a very serious global financial crisis, as reported in Listin Diario.
In an official release on the meeting in the DR, Strauss-Kahn said:
"Our discussions focused on the dual challenge facing the Dominican Republic at this difficult time: the need to return to a financially viable fiscal position in the face of tight world credit markets, while ensuring that macro-economic policies do not exacerbate an emerging slowdown in economic activity. There was broad agreement on the need to rebalance macro-economic policies by reducing the fiscal deficit, as proposed by the authorities, to allow some easing of monetary policy and lower interest rates to help spur private sector activity. Over the medium term, improving economic welfare will hinge on accelerated employment creation and income growth that will be enhanced by a further gradual but steady reduction in the public debt ratios."
He called for close supervision of the financial sector given the difficult times, but stressed that the Dominican financial sector is robust: "On this front, bank indicators are favorable, suggesting a well-capitalized, liquid and profitable banking system that should be well-positioned to withstand current adverse external conditions. The policy objectives for 2009 should contribute significantly to allow the Dominican economy to weather the current global economic crisis."
A joint IMF and World Bank mission is scheduled for early 2009 to conduct an update of the financial sector assessment program, which should further aid the Superintendence of Banks to strengthen its efforts to ensure that the financial sector becomes a major strength of the economy.

Consulate employee arrested
Former Dominican consulate clerk Francisco "Danilo" Estevez was arrested in the US for using his privileged status visa to illegally bring "dozens" of Dominicans into the US between 2007 and 2008. He was charged for alien smuggling in New York and could face up to 20 years in prison.
In a press release the Ministry of Foreign Relations says it removed Estevez from his post as a clerk at the Dominican Consulate in New York as of 23 October after repeated complaints about his behavior from Consul General Eduardo Selman. Estevez held an A-2 visa that allowed him and his seven-member family to forgo standard immigration procedures. Listin Diario reports that Estevez charged US$10,000 to smuggle people into the US as members of his family. The Department of Homeland Security claims that Estevez flew to the DR at least twice a month to find new clients. Estevez, 48, was arrested in Philadelphia on Friday.

Drugs even in Los Haitises!
The Ministry of Environment says that as a result of Operation Hutia to clear Los Haitises National Park of farmers and squatters, drug smuggling operations were detected in the eastern part of the park. Listin Diario reports that the smugglers were using the Ministry stations. "That wasn't kids' play," said deputy Environment minister Eleuterio Martinez. He said the ministry had the support of the National Drug Control Department and the Armed Forces.
The drug smuggling was discovered as a consequence of the Hutia Operation to evict squatters.
But the problems of the park continue. The Ministry complained that just minutes after troops had left, the illegal squatters moved back in.
The Operation had brought 1,200 military personnel to relocate the squatters. Only 45 armed guards were left in the park that is 80kms by 20kms in size.
Environment Minister Jaime David Fernandez has said this time the government means business. The Ministry of Protected Areas, under Eleuterio Martinez has launched reconnaissance air missions to determine where the squatter camps are. He complained that some local leaders are spreading disinformation by telling the farmers that the government has repealed its ban and that they will be allowed to return to farm the lands. Los Haitises, located in the northeast of the DR, is where many of the nation's rivers and streams have their sources.

Metro certified?
The Santo Domingo Metro has received its certifications from Madrid and German company Siemens, reportedly giving the long-awaited project the green light to begin operations. Listin Diario writes that the final inspection took place last week. Transport Reorganization Office (OPRET) sub-director Rafael Serrano said they do not have a date yet for the Metro's opening to the public. He said a trial run would take place shortly, with free rides for city residents. Serrano said that the remaining five cars needed for the Metro are scheduled to arrive by January 5. It had been announced that all the cars had to be in the country in order to test the train.

Conditions for investment needed
The electricity coordinator for the Herrera Association of Industries, Ernesto Vilalta has responded to statements by Radhames Segura, head of the Dominican Corporation of Electricity Enterprises (CDEEE) who blamed the private sector for the deficiency in generation in the country. Segura said that the private sector has failed to make the necessary investments, and justified the government taking on foreign financing for the construction of two coal-fired plants.
Ernesto Vilalta said that by accusing the business sector of not investing in the sector, what the government is trying to do is divert attention from its own blame in the crisis. He said that there has not been confidence in the electricity market and this is what is behind the private sector's lack of investment.
"As was proved recently, the CDEEE and the power electricity distributors do not offer sufficient guarantees to investors that the service provided will be paid. In those conditions, anyone who invests in the electricity sector is either mad or lets himself be cheated," he said.
Likewise, Vilalta said that Herrera's stand on the coal-fired plants is that they are not against them if the correct environmental protection equipment is installed to reduce pollution to a minimum. He said this would include installing electrostatic filters to eliminate the particles sent up into the air, and to pulverize the coal and even turn it into gas.
Yesterday, the top brass of the Latin American Commission for Energy Integration (CIER) encouraged countries in Latin America to avoid installing coal-fired plants in the region because of the negative effects on the environment.

Cap Cana announces agreement
In an announcement released today, Cap Cana, the luxury development in Punta Cana and site of the first Jack Nicklaus golf course in the DR, says that it has reached a definitive settlement with all the lenders under the company's US$100 million Bridge Loan that was originally scheduled to mature on 19 November 2008.
The agreement calls for full payment and satisfaction of US$50 million of the Bridge Loan originally provided by Morgan Stanley in December 2008, and of the remaining US$50 million originally provided by Deutsche Bank in January 2009. It was also agreed that the lenders will retain certain real estate in Cap Cana as payment in kind, and will release certain other real estate properties previously mortgaged in favor of the lenders under the Bridge Loan. A full release under the Bridge Loan was provided to Cap Cana.
"This agreement is very significant for Cap Cana, as it eliminates the need for refinancing, de-leverages the company, and places it in a much better position for the future" stated Cap Cana president Dr. Ricardo Hazoury.

The worst is feared
After weeks without news, it is becoming increasingly likely that 51 people who set off on a small boat trip to Puerto Rico are probably dead. The sole survivors to date, Diomito Rodriguez and Reinaldo Ramirez were rescued off the coast of Belle Anse, Haiti, by fishermen. They were transported back to the small southwestern town of Pedernales and then airlifted to Santo Domingo later in the week. Reports explain that the two men, who were found naked and dehydrated, could barely communicate. The ship left from La Romana headed for Puerto Rico on 22 November and the survivors said that once they ran out of fuel the captain jumped overboard leaving the survivors to die at sea. Navy spokesman Benny Batista said the Dominican Navy is coordinating with the US Coast Guard to continue the search for possible survivors.

Hubieres at it again
Transport union leader Juan Hubieres called for another strike today as a way to pressure the government into making more concessions. The union leader has also been on hunger strike. Once again the public has been used as a pawn in Hubieres's games and the government has yet to respond to his demands. The Fenatrano leader wants the government to give his union the right to transport passengers along the transit lines that will feed the Santo Domingo Metro when it opens. This is the second wildcat strike by Fenatrano, and Hubieres says there will be more if necessary. OPRET director Diandino Pena scoffed at Hubieres's methods and asked him to find other ways to protest. He asked how could Hubieres be asking for something that has not yet been decided, adding that the government has never rejected the possibility of giving Fenatrano the lines.

Strike in the East
Transport from the eastern DR towards Santo Domingo came to a screeching halt as fifteen transport unions called a 24-hour work stoppage as part of their campaign for road reconstruction in those provinces. Among the areas affected were San Pedro de Macoris, El Seibo, Higuey, Miches, Sabana de la Mar, El Valle, Ingenio Consuelo and San Rafael del Yuma. Hoy is also reporting that people in smaller communities along the routes supported the strike and took to the streets throwing rocks, setting up barricades and burning tires.

Manny and his money
Manny Ramirez has refused salary arbitration from the Los Angeles Dodgers, meaning he will become a free agent. According to his agent Scott Boras, Manny is looking for a multi-year deal. However, Ned Colletti, General Manager of the Dodgers says Manny never responded to any of his offers and that his agent never bothered to respond either.

We want 2013
The DR wants to host the 2013 World Baseball Classic and officials say they are starting preparations to host the international tournament. The DR made an unsuccessful bid for the 2009 tournament. The country has also tried to host pre-season Major League Games, but MLB says the DR's baseball infrastructure is not up to standard and needs major work. Dominican Baseball League president Leonardo Matos Berrido argues that the Estadio Quisqueya only needs minor work to be better than Hiram Bithorn Stadium in Puerto Rico.
 
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