Fernandez leaves for Cuba|
Today, President Leonel Fernandez leaves for Havana, Cuba on a five-day official visit during which he will attend the XI International Meeting of Economists. Eight Nobel Prize winners will be taking part in the discussions. The inauguration for the event is at 3pm.
27 Feb speech stats and promises|
In his state of the nation address on 27 February, President Leonel Fernandez sent an optimistic message to Dominicans, saying that the country was weathering the storm of the current financial crisis and that there are positive prospects ahead.
For the most part, his speech was a long list of statistics and promises, including the following:
In 2008, the DR's Gross Domestic Product was up 5.3%, compared to 4.6% average for Latin America and the Caribbean, and the world average of 3.4%.
Inflation ended at 4.52% (the lowest in Latin America), when forecasts were for 12%.
Foreign investment totaled a record US$2.88 billion, balancing the effects of increases in fuel, raw materials and inputs.
Remittances were US$3.1 billion, up 2.1%, compared to US$3.04 billion in 2007.
Several light manufacturing areas showed growth: electronic products 13%, pharmaceuticals 5.4%, jewelry 11%, cigars 9.5%, agro-industrial 7%. Jobs were down from 128,000 in 2007 to 125,000 in 2008, but the good news is that 102 new companies applied for the duty free manufacturing scheme, with an investment of RD$3.7 billion pesos for 2009, and potential for creating 15,400 new jobs.
Tourism receipts were US$4.2 billion, making it the leading foreign currency producer.
A total of 3.9 billion tourists visited the DR. Growth in markets from Canada (up 8%), the US and France also posted positive growth figures, as well as Switzerland, Colombia, Argentina, Chile, Brazil and Russia.
International gross reserves were US$2.64 billion, net US$2.15 billion, and liquid reserves were at US$3.76 billion.
Pension funds system shows RD$72.16 billion pesos, or 5% of the Gross Domestic Product, mentioning that by 2016 this would be 29% of the Gross Domestic Product, a major savings chapter for making important investments in the future.
There will be relief in 2009 with the decline of the country's fuel bill by an estimated US$1.9 billion.
The World Bank is expected to lend US$413 million.
Increase this year's Education Ministry budget by RD$4.09 billion, to be funded by multilateral organizations, to reach the target 4% of Gross Domestic Product investment in Education.
The DR expects to receive US$829 million from the Inter-American Development Bank (IDB). Large portions of these funds will go towards adjusting the budget and on supporting education, health, energy and potable water programs.
The government also expects to borrow from:
The Andean Development Corporation: US$95 million.
Central American Economic Integration Bank: US$50 million
PetroCaribe: US$300 million
National Economic and Social Development Bank (Brazil): US$100 million
Spanish Government Funds (FAD): US$205 million
Increase in financing for Agriculture bank using RD$3.6 billion of the BNV funds for agriculture.
Complete the Santo Domingo agricultural produce market (MercaSantoDomingo).
Implement the Training Program for Rural Youth, to train and encourage young people to stay in rural areas.
Increase in funding to National Milk Council (Conaleche) from RD$10 to RD$20 million a month.
Send to Congress bill for approval of Farming Insurance for RD$500 million to quick-start the program.
Construction of Proindustrial industrial complexes for developing small, medium sized companies.
Issue a decree for the investment single window mechanism, to simplify red tape for investors so they only deal with one government entity.
Strengthen government initiatives aimed at securing land titles.
Lobby for approval of the Public Works Concessions Bill to secure new financing for infrastructure construction.
Send a bill to Congress on updating free zone legislation within the framework of DR-CAFTA and the bill that creates the National Quality System.
Send a bill to Congress to stimulate development of the DR mortgage market by creating new financing mechanisms and permitting the use of pension funds.
Use of US$20 million approved by Colombia's Bancoldex to build housing nationwide.
Application of a Comprehensive Risk Management Plan to mitigate the effects of national disasters and to protect dams and their reservoirs nationwide.
Implement the national Quisqueya Verde program that planted 5.5 million trees last year.
Create a permanent coordination mechanism between municipal and national government authorities.
Infrastructure for 2009:|
Bulevar Turistico del Este (in Punta Cana)
Bridge over Soco River
Sabana de la Mar-Miches highway
Bayaguana-El Puerto-Hato Mayor highway
Jarabacoa-El Rio-Constanza road
National Road Paving Plan
Expansion of the San Cristobal-Bani highway
San Juan-Batey II-Barahona highway
Autopista del Coral from La Romana airport to Punta Cana Airport
Construction of eight community colleges - four of which were completed in Puerto Plata, Santiago, Maria Trinidad Sanchez and La Altagracia. In 2009 it is planned to complete one in Bonao, Barahona, San Juan de la Maguana and Valverde, Mao.
At the UASD in Santo Domingo, completion of the dining hall serving10,860 people per day, administrative tower, parking building, and research and innovation center, as well as remodeling the engineering and architecture, sciences, law and dentistry schools.
Continued expansion of the community technology centers implemented by the First Lady's office.
Expansion of the National Library at the Plaza de la Cultura and modernizing of the National Archives.
Completion of the Professor Juan Bosch Cultural Center in La Vega.
Construction of a hotel complex and sports entertainment center on the site of the Quisqueya Ball Park in Santo Domingo.
Completion of the Ciudad de la Salud in the Province of Santo Domingo.
Completion of the Dr. Heriberto Pieter Cancer Center in Santo Domingo and the Essential Drugs Program (CAL) Logistical Distribution Center for the distribution of generic medicines.
Start or complete new aqueducts in Higuey, Nagua, Bani, Samana, San Cristobal and Salcedo.
Construction of a new water source at the Haina River for the Santo Domingo Water Authority (CAASD).
Completion of the bus transfer programs to feed the Santo Domingo Metro.
Advances in the construction of the second line of the Metro from San Isidro through San Luis to Los Alcarrizos and the train from that point to Santiago, to be completed by February 2012.
To read the complete speech in Spanish, see
Green light for new Constitution|
In his state of the nation address on Friday, 27 February, President Leonel Fernandez also announced that he had signed a bill convening the Constitutional Revisory Assembly, which will begin the modification of the Constitution within the next 15 days.
Hoy reports today that since none of the three political parties with representation in Congress has enough votes to impose a reform of the Constitution, inter-party support would be necessary. The ruling PLD has 120 representatives, and has ample room for maneuver to seek the needed support for the desired revisions.
There are 178 deputies and 32 senators, or 210 members in Congress. Of the 178 deputies, the PLD has 96, the PRD has 60 and the PRSC has 22. Of the 32 senators, 24 are of the PLD, 6 are PRD and 2 are PRSC.
The decisions will be taken by a majority of two-thirds of the attending members. In case all 210 members attend, the total would be 140.
The PRSC deputies and senators are expected to make common cause with the PLD position, comments Hoy. If this were to happen, the 140 PLD and 22 PRSC legislators would be sufficient to pass reforms sent to Congress by President Leonel Fernandez.
The Constitution establishes that legislators will meet on the changes within15 days after the publication of the law convening the Revisory Assembly.
First comments on the speech|
The president of the National Business Council, Lisandro Macarrulla welcomed the speech and said it was in tune with the demands of Dominican society.
Ricardo Bonetti, spokesman for the National Association of Young Entrepreneurs said that the speech was positive, while pointing out that the country's economic reality of the country is more negative than the situation presented by the President, as reported in Diario Libre.
Manuel Cabrera, of the Association of Industries of Herrera, described the speech as "encouraging."
Adriano Miguel Tejada of Diario Libre called it a "surrealist speech" where in contrast to a state of the nation, a campaign or an inaugural speech, "the President used the crisis as a platform to launch a nirvana of promises that seem to ignore the present state of the government's finances." He observed that in the country the government operates with resources that appear to be beyond the needs, if the wastefulness and corruption were eliminated, but he states that so far no one has been able to come up with the formula for ensuring that a government public works project will cost the same as one built by the private sector.
Don't live beyond your means|
Speaking during the Business Forum held at Casa de Campo on Saturday 28 February, Hacienda Minister Vicente Bengoa presented an overview of the global financial crisis and outlined its effects on the DR. He described the crisis as "the perfect crisis" in the style of "the perfect storm." He said that it was a crisis with a pronounced decline in consumption, investment, tax revenues for governments, lending by banks, and trade, and that to make matters worse, "the patient is not responding to known treatments". He stressed that this was very different to the crisis of the 1930s that was based on the real economy, and resulted from overproduction. The crisis of 2008 has happened on the heels of 20 years of maximum growth and economic stability, a period of abundance where regulations and controls were dismantled, giving way to the bubble economy.
He said that during the first half of 2008, the DR was affected by high prices of petroleum, foods, inputs, and the effects were felt in the balance of payments. The authorities brought in measures to rein in the economy, and these are now being dismantled. The government suffered with the decline in tax collections, and the effect of the decline in PetroCaribe Agreement financing when the price of petroleum collapsed. The government did not collect the revenues it had forecast it would, as their projections were based on higher fuel prices.
Bengoa said that the DR was partly shielded from the financial crisis because after the country had its own financial crisis in 2003, Dominican banks were strengthened and adjusted to strict prudential standards. He said that the Monetary Board adjusted Dominican banks to a 10% Solvency Index, when the Basel 2 Agreement established 8%. At the end, the DR banking solvency index reached 14.7%, the highest in Central America and the Caribbean. Furthermore, he pointed out that Dominican bank investments abroad were 4%, and deposits abroad were 2%, so the Dominican bank risk was low. Furthermore, because the Dominican Republic does not trade in stocks, the effects felt by stock exchanges was less pronounced.
Turning to remittances, he said that the volume of remittances received remained practically the same in 2008, increasing by 2%. What was affected was the rate of growth of these remittances. He said that remittances to the DR have shown to be practically inelastic, as most who send remittances do so for their relatives to obtain essential items such as food purchases.
Tourism receipts, the leading foreign exchange revenue producer, were up 4.3% in 2008 to US$4.2 billion, result of 3.9 million tourists in 2008.
In the industrial free zone sector, he said that while apparel manufacturing is down, there have been increases in light manufacturing of cigars, jewelry, food and medical-related goods. Bengoa said that if anything the DR stands to gain from the financial crisis. He said that industries in the US will maintain limited inventories, and will need to source from nearby suppliers, such as is the case of the DR versus China.
He says that prospects for continued growth in foreign investment have remained stable. Within the past six months, according to Bengoa, the Ministry of Tourism has approved US$14.5 billion in proposals for new projects. In addition, Barrick, the largest gold mining company in the world, will be embarking on a US$3.1 billion investment in the DR.
Bengoa concluded his address by saying that the current financial crisis should kill the myth that markets will self-regulate, and warns that this proved not to be the case in the recent previous boom times. International financial reorganization is needed, as the present financial institutions cannot deal with the crisis, he stressed.
Bengoa says that the US was borrowing to finance consumption, destroying its savings in the process. He concluded that there are lessons from this experience that can be applied to the Dominican Republic. "Don't live beyond your means."
The Economist's grim forecast|
The Economist's 2009 financial forecast for the DR includes some grim predications, including the possibility that that country's economy (GDP) could contract by 0.8% "as external conditions worsen." According to the report, the deceleration of domestic demand will intensify. However, there is expected to be a 2.3% growth in 2010, which will lead to a slow economic recovery. The Economist reports that "After dropping sharply in November and December to end 2008 at 4.5%, annual inflation will continue to fall in early 2009, but will end the year at 6.5% as the peso depreciates. Inflation will average 8.6% in 2010." The Economist points out that President Leonel Fernandez's administration's ability to meet its macro-economic goals will be limited by a "severe economic downturn and structural weakness in the government's accounts."
Montecristi getting roads|
The general strike planned by community organizations in Montecristi was averted after Public Works Minister Victor Diaz Rua promised to complete the construction of roads in surrounding areas. Diaz said that previous road construction contracts would be rescinded for failure to complete the roads. The Mao-Guayubin, Las Matas de Santa Cruz-Cruce de Copey-Manzanillo, Navarrete- Esperanza and the Montecristi road will all be repaired. The Guayubin-Duarte and Guayubin-Juan Gomez roadways will also be repaired. Diaz promised that more funds would be made available in order to speed up the process.
Haiti rejoins discussions|
Haiti has rejoined the Dominican-Haitian Mixed Bi-national Commission. Haitian president Rene Preval reestablished connections by decree and ordered Haitian government officials to work within the Commission to properly discuss mutual matters of interest. The Commission was originally proposed in 1995 under then President Joaquin Balaguer and officially created during the first Fernandez administration in 1996. However, the Commission only functioned until 1998. Outgoing Dominican Ambassador to Haiti Jose Serrulle told Listin Diario that Haiti's inclusion in the Commission would provide a short-term institutionalization of Haitian-Dominican relations.
A-rod meets with MLB|
In what he hopes will be the final chapter in his continuing saga with steroids, baseball player Alex Rodriguez met with MLB officials on Sunday to discuss his knowledge of steroids within MLB clubhouses. Though little was revealed from the two-hour meeting, a press release from MLB indicated that Rodriguez was cooperative in his declarations. Rodriguez was flanked by two lawyers, Jay Reisinger and James E. Sharp during the meeting in Tampa, Florida. ESPN reports that union general counsel Michael Weiner, MLB vice president of investigations Dan Mullin, MLB executive vice president for labor relations Rob Manfred, and senior vice president and general counsel for labor Dan Halem were also present at the meeting. "I'm only talking about baseball, I'm just excited that I have a game every day. That's where I belong. It's fun to be back out there," were Rodriguez's only comments. Rodriguez then departed for Jupiter, Florida where he will meet the Dominican team and prepare for the 2009 World Baseball Classic.
Washington National's GM Jim Bowden resigned from his position Sunday morning as a result of a damaging scandal involving a National's minor league prospect. However, Bowden's move was also influenced by a bonus skimming scandal involving Latin American players, where MLB teams GMs and scouts would report a signing bonus, give the player a reduced sum and pocket the difference. Bowden says he doesn't want to be a distraction to the team as investigations continue. Former Nats special assistant Jose Rijo was dismissed last week for his part in a scandal involving player Carlos Alvarez David Lugo a.k.a. Esmaiylin Gonzalez, who faked his name and age to get an MLB contract.
It looks as if Manny Ramirez has taken his on-the-field antics off the field after rejecting a two-year US$45 million offer from the Los Angeles Dodgers. The Dodgers proceeded to take the offer off the table and Ramirez remains without a team. This is the fourth offer reportedly rejected by Ramirez. There is no telling when Ramirez will put his John Hancock on a contract, but his antics are slowly growing old, even in L.A.
Carnival a hit|
Santo Domingo's George Washington Avenue (Malecon) was turned into a rolling party yesterday with the arrival of the 2009 National Carnival. The colors were abundant and the energy palpable as more that 180 "comparsas" (troupes) paraded down the Malecon displaying a tremendous amount of creativity with their floats and costumes. Music blared throughout the hot Sunday afternoon, but it wasn't enough to prevent thousands of onlookers from taking in the magic of Carnival. One of the most popular comparsas at yesterday's Carnival was from Samana, which was the special guest while a collective from Curacao was the special international guest at Carnival. Sunday's celebration was a fitting end to the DR's Carnival season. According to news correspondent Lu Olivero, "it was absolutely incredible. I'd never seen anything like that. There were thousands of people having a great time and literally dancing in the streets. A must-see if you get a chance."
For more on upcoming events, see http://www.dr1.com/calendar
The contents of this webpage are copyright © 1996-2015. DR1. All Rights Reserved.