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Daily News - Tuesday, 12 May 2009

Tax-free construction materials
According to Superintendent of Banks Rafael Camilo, there is a housing deficit of 975,000 units, and the government is taking new steps to help fill the need. According to Diario Libre, yesterday the government issued instructions for the materials used in the construction of housing units with construction costs of under RD$1.4 million to be exempted from income tax, ITBIS (VAT) tax, and other taxes, as part of a plan to get the economy moving via the construction sector.
The exoneration of taxes for materials used in housing construction is expected to "kick-start" the economy through the construction sector that is known to create more jobs and have a trickle-down effect on other industries.
The measures will be implemented through the administration of the Department of Taxes (DGII), while the Congress discusses the legislative proposal that will be sent by the President's Office today.
The measures come in response to requests from the construction sector and the small and medium business sector. The President and his economic cabinet met with representatives of these sectors yesterday.
Camilo acted as spokesman for the government and told the press after the meeting that it was agreed that the Central Bank is also studying a mechanism that will fix mortgage interest rates on middle class housing for three years. Camilo reported that just what that rate will be is not yet known but the decision could be taken in two weeks time.
Camilo also said that the government is exploring the possibility of donating state lands for the construction of low-cost housing projects.
According to studies, a house that would sell for RD$1.4 million would be between 75 to 80 square meters, and cost between RD$800,000 to RD$900,000 to build with the tax exemptions and the so-called land bonus the government would provide.

Segura asks AES for time
Radhames Segura, vice president of the Dominican Corporation of State-owned Electricity Enterprises (CDEEE) has called on the executives of AES Dominicana to withdraw their embargoes on the electricity distributors. In a public statement yesterday, the CDEEE executive said that this measure, to which the AES has a right, is creating unrest in the energy sector.
He said that the distributors have been handing over all the money they receive to the generators. Segura said that the government is also paying the generators, and of the US$140 million that was budgeted for the first four months of the year, they have paid US$126 million. The official accepted that what has been disbursed to the generators is not enough, but the distributors cannot do any more. He was speaking at a joint press conference with the directors of Ede-Sur, Ede-Norte and Ede-Este. According to Hoy and Diario Libre, the distributors and other agencies owe the generators a lot of money.
Segura said that the generators are owed US$37.48 million from 2008 and US$237 million so far in 2009. The debt that was frozen in 2004 was for US$194 million and brings the total to US$468 million. The debt is shared by the distributors (EDEs) and the CDEEE. The Edes also owe the CDEEE the Hydro and transmission companies some US$53 million for energy sales.
There are plans to reduce spending by RD$1.6 billion between May and December of this year. This is equivalent to US$43.74 million. One other measure will be to allow the direct purchase of fuel by the generators.

Loan to pay electricity debt
The Fernandez administration is seeking a US$300 million bridge loan with the World Bank to pay arrears to power generators, according to Superintendent of Electricity Francisco Mendez, as reported in Hoy. According to the newspaper, the World Bank estimates the present deficit in the electricity sector at US$700 million. A report presented to business leaders at the Presidential Palace last week said that if the deficit were maintained, consumers would suffer an 18-40% increase in blackouts. The report advocates a repeat of the solution imposed by the government over the years: increase the rates for clients who pay for the service.
The report focuses on three dilemmas: To keep the present rates and prevent blackouts would affect fiscal sustainability; maintain the present level of tariffs and taxes would increase blackouts, and ensure fiscal sustainability and avoid blackouts by increasing rates and losses.
The report presented by the state electricity sector acknowledges deficient management of power distributors, 30% of power distributed to non-paying consumers, low level of collections of electricity billed, rates frozen since mid 2006 that do not cover present costs, non-focalized subsidies, incomplete implementation of the strengthening of electric sector institutions, and deficiencies in planning in the sector. According to the report, only 38% of clients pay what they are billed, 25% steal the service, and 22% are served power at fixed rates under the PRA, where losses are estimated at 90%.
Blackouts have increased because of the arrears the government has with the power generators. Hoy reports the accumulated debt is at US$252 million, resulting in government rationing of the service.
Listin Diario reports that as of Monday, 11 May 1,445 megawatts were on line, when demand is 1,935 megawatts, for a 25% deficit. Some areas are reporting 12-hour blackouts.
Local businesspeople and several consulting reports contracted by the government itself for years have emphasized the need for politics to be removed from the management of the electricity sector.
Celso Marranzini, former president of the National Council of Business says the continuing power crisis is a problem of planning, collections, financing and current spending, as reported in Hoy. He advocates the installation of meters. "There is no business in the world where you sell 100% and only collect 50% and can survive," he told Hoy. "The CDEEE has been, unfurtonately, a place for jobs for politicians. He remarked how the CDEEE payroll has increased from RD$39 million in 2004 to RD$400 million in 2008. It is a political booty," he explains.
He emphasizes that the DR cannot continue "with that luxury."

US$498 million shortfall
Hacienda Minister Vicente Bengoa expects the economy to generate US$498 million less this year. He forecast that remittances would fall by 6%, some US$187 million; tourism would decline by 5%, some US$308 million and that industrial free zones would fall by 10% or US$102 million.
Nevertheless, Bengoa said that on the positive side, the country would pay US$1.42 billion less for petrol imports this year. Last year imports totaled US$4.24 billion, and this year they are expected to be US$2.82 billion.
The second bright spot is direct foreign investment. He is optimistic that several of the US$14.5 billion in projects approved by the Ministry of Tourism will begin construction this year, as well as the start of the US$3.15 billion Barrick Gold investment in the central province of Sanchez Ramirez (Cotui).

Minister wants more research
Minister of Higher Education, Science and Technology, Ligia Amada Melo, revealed yesterday that just six of the 45 institutions of higher learning in the country are carrying out research. Universities allocating resources to research are the Autonomous University of Santo Domingo (UASD), the Pontifical Catholic University Madre y Maestra (PUCMM), the Technological University of Santiago (UTESA), the Ibero-American University (UNIBE), the Technological Institute of Santo Domingo (INTEC) and the Higher Agriculture Institute. Melo added that the Dominican Institute for Agricultural and Forestry Research (IDIAF) and the Bio-Technological and Industrial Innovation Institute (IIBI) contribute their scientific studies.
On the other side of the coin, the minister said they are working towards creating a database to track the number of professionals with doctorates in science and technology with the support of the Inter-American Development Bank (IDB).

Subero Isa calls for independence
After swearing in 17 promoted and transferred judges in several of the country's jurisdictions, the president of the Supreme Court called on magistrates to defend the independence of the Judicial Branch.
Jorge Subero Isa warned that under no circumstance would there be mass firings or pay cuts for judges and officials, as ordered recently by the Attorney General's office.
The judges who were promoted were Pilar Rufino Diaz to the presidency of the Fourth Collegiate Tribunal, as were Ingrid Fernandez and Daniel Julio Nolasco, taken from the Ninth Room of the Penal Chamber. Magistrate Mariana Garcia Castillo was brought from Montecristi for the latter court. Judge Esmirna Gisselle Mendez Alvarez was promoted to be the substitute of the president of the First Collegiate Tribunal where judge Teofilo Andujar was placed. Magistrate Yuly Tamariz Nunez was sent to the Second Collegiate Tribunal. Meanwhile, Ysis Muniz Almonte was transferred to the Third Circuit of the District Court in place of Wendy Martinez Mejia who was sent to the Province of Santo Domingo. Other promotions affected San Francisco de Macoris and other jurisdictions.

Legislators on "anti-DR campaign"
Thirty two legislators from all political parties have complained that for the last 10 years the DR has been the target of a smear campaign "from both outside and from within" about Haitian immigration issues. "This campaign is deeply affecting our country's well-earned historical reputation. And if we do not face it with the truth, it will generate, as seems to be the case, devastating economic and social consequences for our people," says a letter the legislators sent to Pedro Ramirez Jiminian, director of Spanish newspaper El Mundo.
The letter is in protest at a story called "The final battle against slavery" that was published in a supplement to the online version of the Spanish daily, reporting that the Dominican Congress has outlawed slavery.
In the story by journalist Paco Rego, this legislative measure is described as "a historical measure provoked by the actions of Spanish priest Christopher Hartley Sartorius", who was said to have been forced to leave the country "because of death threats."
The legislators go on to say that while they respect the right to freedom of expression, they say that it "should be exercised responsibly." Furthermore, they say that any historical research will show that slavery was abolished in 1822 and has never been re-established.
They said that the current constitutional reform process is certainly "not influenced by the unfortunate declarations of a priest with delusions of grandeur who thinks that he can influence the decisions of the National Congress composed of 178 deputies and 32 senators."
They continue by listing all the international human rights declarations that the country has signed, and complain: "but to say that a person far removed from our institutional life (Hartley) has influenced in decisions of the Constitutional Revisory Assembly, beyond the new constitutional trends in Latin America and Europe, and above and beyond the international treaties signed more than 60 years ago, is excessive and we cannot remain silent."
The legislators, 32 in all, signed the letter. While observing that the abolition of slavery is in the text of the new Constitution, they clarified that this was not the first time however, since it has been in all Dominican constitutions since 1844.

Rains caused two deaths
The Emergency Operations Center (COE) reports that two young men drowned in the Haina River after heavy rains caused its flow to increase. The bodies of Roberto de los Santos, 17 and Carlos Manuel Martinez, 18 will be recovered today, according to the COE.
The COE says that 37 communities have been cut off by overflowing rivers and creeks, such as Arroyo Grande, Arroyo Almedio, Los Guazaro and the San Juan in the provinces of Maria Trinidad Sanchez (Nagua) and Samana. A yellow alert remains in place for La Vega, Monsignor Nouel (Bonao), Sanchez Ramirez (Cotui), Maria Trinidad Sanchez (Nagua), Hermanas Mirabal (Salcedo), San Cristobal and Duarte (San Francisco de Macoris). A green alert is in place for Santiago, Espaillat (Moca), Samana and Monte Plata. Meanwhile, the National Meteorological Office announced that today would see lighter rains with thunder and lightening and strong winds, especially in the north, northeast, southeast and the central mountains.

Banco Mercantil execs sentenced
Bankers Andres Alejandro Aybar Baez, former president of Banco Mercantil, and Evelyn Perez Montandon, former vice-president for administration and finance, were issued five and three-year prison sentences by the National District First Collegiate Tribunal. They were found guilty of altering and hiding data, records, books and other documents with the aim of misleading the supervision by the Superintendent of Banks and of approving and presenting an altered financial statement aimed at concealing the bank's true situation. The court discharged the other five accused because it was not able to prove the charges against them.
The court also ordered the guilty parties to pay a RD$1.5 million fine each as well as RD$20 million compensation to the Superintendent of Banks.
The court was presided by magistrate Giselle Mendez and included Felipe Molina Abreu and Tania Yunes Sanchez.
The magistrates said that they were dismissing the charges against the other five accused because some of them were not working at the bank when the fraud took place and others were second level employees who only received orders.
The lawyers for the monetary authorities immediately said that they would appeal this decision. When questioned by reporters, Aybar Baez refused to say anything beyond the fact that he would await the reading of the full sentence before commenting.

PLD courts the last of the PRSC
Leaders of the dwindling Social Christian Reformist Party (PRSC) and legislators from the ruling PLD party met with President Leonel Fernandez in the Presidential Palace last night. At the meeting, Fernandez asked them for their cooperation in moving forward on the Constitution bill in Congress on "five or six" conflictive points, according to PRSC members who were present at the meeting. This is the second meeting held between the Reformists and the President in the last four days. Apparently, the central issue of the talks has been the PRSC's support for the President's constitutional reform initiatives and a possible renewed electoral alliance.
Nearly all the PRSC legislators attended last night's meeting, together with several representatives of the party leadership. PRSC president Federico Antun Batlle reported that these conflictive points included articles 30 and 49 on abortion and re-election for two periods, as well as nationality and the Judicial Branch.
On Thursday evening the President held a meeting at the Presidential Palace with PRSC president Federico Antun Batlle, spokesperson for the PRSC deputies Ramon Rogelio Genao, former presidential candidate Amable Aristy Castro and Foreign Minister Carlos Morales Troncoso. The party's secretary general Victor Gomez Casanova did not attend the meeting.
Prior to last night's meeting, Antun Batlle had lunch with the party's legislators in the Scherezade Restaurant, in what was described as a routine get-together. Even though Antun Batlle admitted that he was going to meet with President Fernandez, he denied that any sort of negotiations were in process.
"Here we live with low lives, gossip, speculation; this is a country where anyone says anything and the journalists pay attention to it, and this is dangerous," he stated. But he added that, "when a President invites a party to talks, the party should go, since we meet with everyone that we have to meet with."
The PRSC president did not give much importance to any rapprochement that might happen between party leaders or legislators since he assured reporters that the dominating voice is that of the party directorate. A little more tactical was Genao, who did not confirm or deny anything. "There are things that are official, semi-official and extra-official, and therefore the party is here as a group to discuss the issues with reference to past and future actions," he explained. A point of discord was voiced by PRSC deputy Victor Bisono, who said that he was not one to go around seeking meetings with the President, and said that instead the party should seek its own credibility by standing on its own. In the 2008 presidential election, the PRSC failed to receive the minimum 5% of the vote required to maintain its legal status.

Four accused of murder in NY
Manhattan District Attorney Robert Morganthau announced yesterday that 25 charges had been filed against four Dominicans who allegedly killed five people in the DR and engaged in international drug trafficking for several years with New York as their center of operations. The Manhattan DA identified the accused as Dominicans Rafael Alvarez, Wander Espinal, Danny Joel Rodriguez and Carlos Hilario. The charges include murder, conspiracy, money laundering, and conspiracy to distribute cocaine in New York.
Diario Libre reported that Morganthau added that the accused had paid several contract killers to murder five other Dominicans in Santiago de los Caballeros and San Francisco de Macoris with the aim of consolidating their criminal ties with drug traffickers and eliminating their rivals.
All the men were in the United States without legal documentation, he added at the press conference.
An immigration officer said that the arrested men are being held in local jails but after they served their time "they would be given papers and deported." The officer added that, "this, obviously, will take quite a few years."
If Alvarez and Espinal are found guilty, they face up to 20 years in jail and possibly life in prison. Rodriguez and Hilario could be sentenced to between one and 20 years each. During the press conference, details of some of the assassinations allegedly committed by the four accused Dominicans were given to the press.

International Art Fair
The First International Art Festival (Fiart 2009) will take place this year at the Palace of Fine Arts (Palacio de Bellas Artes) located on the corner of Independencia and Maximo Gomez. It seeks to follow in the footsteps of the very successful International Book Fair, now in its 12th year. This year the event will be dedicated to Dominican master painter Ivan Tovar, known for his surrealistic art, and international sculptor Fernando Botero of Colombia. Botero has a sculpture located at the entrance to the Santo Domingo Hilton. The event is scheduled for 20-24 May. Also coming is Cuban painter, Pedro Pablo Oliva, who won the Cuban national arts award in 2006. The event opens with a special RD$8,000 per couple event on 20 May, but subsequent day exhibits are open to the public.
See www.fiart.com.do

CATS at Bellas Artes
"Cats," has opened to good reviews at the Palace of Fine Arts (Palacio de Bellas Artes) on Maximo Gomez Avenue. This is a Dominican version of "Cats", the musical based on 'Old Possum's Book of Practical Cats' by T.S. Eliot. Translation and adaptation to Spanish was by Mariano Detry, and Amaury Sanchez is producing the show. The director and choreographer is Isadora Bruno and theatrical director is Ivan Garcia. The National Classical Ballet are performing. The show opened on 8 May and will continue through the weekend of 31 May. Tickets are on sale at Bellas Artes and MovieMax Piantini. Shows are on Friday and Saturday at 8:30pm, and Sundays at 6pm.
For more on upcoming events, http://www.dr1.com/calendar
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