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Daily News - Thursday, 18 June 2009

Bengoa explains Refidomsa sale
Hacienda Minister Vicente Bengoa has provided some initial details of the proposed sale of 49% of Refidomsa to Venezuela. According to Bengoa, Venezuela will pay US$130 million for a 49% stake in the company within a three-month period, as long as the price of a barrel of crude oil stays below US$70.
He said that as part of the PetroCaribe agreement, Venezuela is already financing 40% of the price of fuel purchased by the DR, and the remaining 60% would go to the Dominican government as payment for the 49% stake.
According to Bengoa, the sale of a minority stake in the company would have twelve direct benefits, including the chance of increasing the long term financing of the PetroCaribe agreement by US$201.6 million, based on a price per barrel of US$70.
Currently long-term financing is US$302.4 million and this would increase to US$504 million over the lifetime of the agreement.
Fuel output could also increase from 30,000 to 50,000 barrels per day. Bengoa proposed that the sale would allow Refidomsa to become a center for the export of refined petroleum products and a distribution center to other Caribbean nations.
The sale would also grant the DR access to technological advances in the area of petroleum.
Marino German, who was also at the meeting, said that there was no need for public bidding as the sale is being defined as a commercial transaction.
Bengoa continued to defend the sale by saying that the DR is selling the stake for US$20 million more than it was purchased for and argued that the sale does not threaten the country's sovereignty as the DR is still the majority stakeholder. Bengoa mentioned that another of the benefits of the refinery sale to Venezuela would be that the credit line for fuel purchases would be increased.

The dark side of PetroCaribe?
Marisol Vicens is warning of the dangers of the sale of 49% of the shares in the Dominican Oil Refinery to Petroleos de Venezuela (PDVSA), the Venezuelan oil company. Writing in El Caribe, the business leader reveals that in the transaction whereby the government bought back the 50% of the Shell company's shares in the refinery, it also acquired all the Shell gas stations in the country that were previously owned by Shell. "The worst thing about the celebrated PetroCaribe agreement is that we are seeing what the counterparts are to be: a hegemony over the beneficiary countries, making Venezuela the sole oil supplier and now the owner of its refineries and fuel distribution stations. That is the dark side of PetroCaribe that no one wanted to see, and the truth is that thanks to this, sadly we are in the hands of the controversial government of Commander Chavez."

Subtracting from development
In a newspaper interview for Hoy & El Dia newspapers, Economists Carlos Despradel, Miguel Ceara Hatton and Apolinar Veloz addressed several of the reasons for the government's current fiscal deficit. The economists said that the government has 593,000 people on its payroll, including 95,000 retirees.
Carlos Despradel, a former governor of the Central Bank, says that the government spends 85% of its budget on payroll and subsidies, and barely 4% on infrastructure investments. Despradel believes that the DR economy is in recession, despite the Central Bank's announcement that the GDP grew by 1% in the first quarter.
Apolinar Veloz, a former general manager of the Central Bank, thinks that the Fernandez administration is taking measures to solve short-term considerations that will affect the country in the long term. He said that according to the Central Bank, the Dominican economy is moved by consumption, which is about 90% of the GDP, and of which 72% consists of imports.
Miguel Ceara Hatton, coordinator of the United Nations Development Program in the DR, said that the government has resorted to borrowing as a way of activating the economy. He said that the level of public debt is projected to end at US$13 billion, up from US$11 billion last year. He said the use of the funds is uncertain.
He mentioned that as of 29 March 2009 the debt with PetroCaribe was US$1.2 to US$1.3 billion, and the funds that would have gone to pay for fuel were instead used to subsidize the electricity sector. "We are taking on debt to pay subsidies and the debts should be for savings or to generate foreign exchange. Ultimately, we are subtracting money that would be used for development," he warned.
Despradel urged the government to be austere in its spending. He called for the example of former President Joaquin Balaguer to be followed in his strict management of government funds. "He was a true statesman, in that in his government no one had vehicles assigned, gasoline, or credit cards to pay restaurant bills," he commented. "We have to revive that," he said.
Despradel said that in Balaguer's day the budget was equally distributed between infrastructure works and spending. He criticized the fact that today only 15% goes towards investments.
Apolinar Veloz commented that the country does not meet the conditions to sign an agreement with the International Monetary Fund. He says that corrections need to be applied to the deficit in the balance of payments and the central government, the solvency of commercial banks and fulfillment of the laws. He said another limitation is the use of government money for election campaigning. He speculated that government spending would not be under control next year when the authorities have the challenge of the congressional and municipal elections. Veloz said that a US$1 billion bonds placement would not require the governmental controls that would have to be in place to receive funds from the IMF.
Nonetheless Despradel warned, "Now, in the case of the obtaining money through the issue of sovereign bonds, it would be funds for government spending, on government payroll that already has been increasing disproportionately."

The DR's ten-year boom
Clave Digital is reporting that in the last ten years the DR has experienced a building boom. As a result 34.7% of all homes built in the DR were built during the last ten years. This is more home construction than any other period in the last 50 years. Of the 2,530,474 homes in the DR, 876,287 were built in the last ten years. The statistics from the 2007 National Survey on Income and Spending (Enigh 2007) indicate that 53.3% of Dominicans live in homes they've already paid for.

Taxes and high costs hurt exports
Yesterday was the Day of the Exporter. Leading exporters' organizations the Dominican Free Zones Association (Adozona), National Hotels and Restaurants Association (Asonahores), Association of Industries of the Dominican Republic (AIRD), Dominican Exporters Association (Adoexpo) and the Dominican Agribusiness Council (JAD) met yesterday to call for a turnaround in government policies to help boost exports. As reported in Listin Diario, they called for a solution to the energy crisis, less taxes, better access to credit, a reduction in labor costs and the elimination of the current transport monopoly. The exporters criticized the fact that priority is being given to consumers and not producers.

SCJ and Taiwan sign agreement
Supreme Court President Jorge Subero Isa has announced the signing a cooperation agreement with Taiwan's Judicial Branch on behalf of the Supreme Court of Justice during his official visit in Taiwan. Taiwanese Supreme Court Judge Lai In-Jaw signed on behalf of Taiwan. During the signing, Judge Lai In-Jaw said Taiwan was interested in contributing to the modernization, organization and innovation of the Dominican judicial system. Subero Isa has been in Taiwan since Sunday.

Amnesty for illegals rejected
The president of the National Border Council (CNF) Radhames Batista has rejected a proposed legal amnesty for illegal residents in the DR. He said that more than just migration, what happens is that a "family moves with furniture and everything." He said that the Haitian migration problem would be solved when more support is given to the border security force and by helping Haiti overcome the problems that motivate its citizens to migrate. The ruling, which is being promoted by Interior & Police Minister Franklin Almeyda Rancier, suggests granting legal residential status to any Haitian who can prove to have resided in the country for 10 years was also rejected by Foreign Minister Carlos Morales Troncoso, on the grounds that it would encourage even more migration. The proposal also indicates that foreigners who can prove having lived here for five years will be given temporary residency. The ruling also suggests granting one-year work permits for temporary workers.

The Police reform that wasn't
In today's Hoy, investigative reporters Minerva Isa and Eladio Pichardo write about the aborted Police Reform project. The reform was conceived 10 years ago when the crime rate began to rise. The reform project proposed modernizing the National Police to turn it into a competent and trustworthy organization, but this was rejected by powers that be and was ignored by the PRD and PLD administrations that followed. "The reform was designed but not implemented, and the Police is still obsolete," conclude the reporters.
Retired General Pedro de Jesus Candelier, a former chief of Police and commission member, said that the reform sought a total overhaul, including infrastructure and internal divisions, to equip and professionalize the Police, train personnel, change recruitment methods and decentralize the resources into regions. He says that as this took place 10 years ago, there is a need to review the project, and more than ever to implement it now. He says that if it were in place, "we would have police with a different mentality."
"The PRD and PLD governments, which the nation hoped would strengthen its institutions, allowed the Police to drag behind with inefficiency and corruption inherited from the Reformist administration and the repressive and military government of dictator Rafael Trujillo," they stated. They state that with very few changes, today's Police force is a continuation of the Trujillo police structure. The reform that was prepared in 2000 sought radical changes in Police vision, methods and procedures to turn it into a civilian, community organization, committed to strong institutions and human rights. It proposed ridding the institution of its centralization, its military character, and the impunity granted to policemen in the police code, as well as an increased budget, continuing education, and a code of ethics and supervision of police actions.
The journalists point out that when Fernandez returned to government in 2004, as part of the modernization of the state programs, Police reform was revisited as an important issue in the light of the increase in drug trafficking and crime.
The president of the National Human Rights Commission Porfirio Rojas Nina tells Hoy: "Reality is very much divorced from the modernity that President Fernandez speaks of," he says. For him the obsolescence of the police ruling has led to the present situation. "It is like an old tank, or with old boilers, you can patch a hole here and there, and it will explode somewhere else. We have lived in those conditions from 2000 to 2009," he says.
In his opinion, the failure to approve the new law for the Police brings us to where we are now. "That cannot continue in a society where we speak of globalization, of modernity and what's worse, one does not know where the Police is headed," he says.

Guillermo Moreno on the police
Former presidential candidate Guillermo Moreno says that the constant confrontations between the Police and the public are part of a policy of police brutality supported by the government and Police Chief Guillermo Guzman Fermin. Moreno says that Guzman should be replaced. Moreno made his comments in reaction to the murder at the hands of Police of a young protestor, Jose Alfredo Gonzalez in Navarrete last week. Moreno also commented on the silence, complicity and subordination that exists among all the authorities involved in the process. He added that although this is a free country there is indifference when it comes to these matters. He called on the public to be less complacent.

Crackdown on ectasy ingredients
The National Drug Control Department (DNCD) announced health officials would take control of ephedrine and pseudoephedrine that are used by local drug companies to manufacture pharmaceuticals to avoid the transshipment of the ingredients to Mexico and Central America. Investigations have shown the DR is being used as a bridge for the export of these substances. According to the resolution to the effect, all ephedrine and pseudoephedrine that is now imported will be housed in DNCD warehouses to reduce the possibility of the drugs being stolen.

Close these colmados
Residents of the Villa Juana sector of Santo Domingo are fighting for their community and want to take back their Friday and Saturday nights. Community organizers are supporting the National District Municipality's decision to close some of the "colmadones" (corner shops that double as bars and entertainment centers) in the neighborhood, saying that the establishments are too noisy and that they disturb local residents. The colmadones in the crossfire include El Fuerte, Chi Up, Otro Nivel, El Sitio, Chichio, Sport Bar Giron, Down Town, El Punto and El Mameluco, which are frequented by MLB players during the off-season. Neighborhood groups say the constant loud music, thefts, shootouts, public sexual acts, vulgarity and consumption of drugs are giving Villa Juana a bad name.

Yuderqui is innocent
Dominican weightlifter Yuderqui Contreras has cleared her name after the International Olympic Committee announced that Contreras' B sample came up as negative during tests in Paris. Contreras' A sample, taken shortly after the 2008 Beijing Olympics tested positive for the performance enhancing drug CERA. There had also been much controversy and suspicion surrounding Contreras because the weightlifter trained in Bulgaria under coach Constantin Darov, but the Bulgarian national team didn't compete in weightlifting events because of a doping scandal. A negative result on her B sample clears any doubts about Contreras and ends months of embarrassment and accusations of cheating. "I can't express my joy after I received the call from journalist Dionisio Soldevilla to tell me about the medical commission's decision." Contreras has always maintained her innocence and said she was confident she would be exonerated. She said she was not interested in winning a medal using banned substances. Yuderqui Contreras came fifth in the 53kg category in the Beijing Olympics.

More troubles for Sammy
The slugger has yet to make any comments about the revelation that he tested positive for performance enhancing drugs in 2003, but the US Congress sure has a lot to say. According to Fox Sports, a congressional committee will look into whether or not Sosa's denial during a 2005 Congressional hearing can be defined as perjury. The chairman of the House Oversight and Government Reform Committee, Democratic Rep. Edolphus Towns of New York, says that the committee takes seriously suggestions that a witness had been misleading. Ryan Konerko and Aramis Ramirez have both come out in defense of their friend and former teammate. Konerko has stated that he would wait until Sosa spoke on the matter before expressing an opinion. He said either the anonymous source should come forward or Sosa should admit to his drug use before he believes the accusations. Ramirez said that he doesn't believe Sosa did anything wrong.
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