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Daily News - Thursday, 30 July 2009

CONEP calls for new model
Speaking at an American Chamber of Commerce luncheon yesterday, the president of the National Business Council (CONEP), Lisandro Macarrulla said that the country needed to change its economic model for a more sustainable one. Macarrulla advocates moving from a consumer model to one based on production.
During his talk, titled "Towards a Sustainable Social and Economic Model", he said: "We have come to believe that we can resolve everything with the money that comes from remittances, or from increasing the public debt, or attracting more capital. It would seem as if we do not need the productive sectors, rather just financing for consumption."
According to Hoy newspaper, the business leader also called for a change in the role of the state that seems to invest only when loans are available. He said this has "increased the public debt to unprecedented levels."
He said that consumption was 86.2% of the GDP in 1991, and in 2008 it had increased to 91.3%. This was aggravated by the fact that in 2008 investment and consumption reached 113% of GDP, and with the surplus in spending, above all spending on consumption, financed by external resources, basically with imports of goods and services.
He said that there has to be a logical reason why agriculture does not prosper and the country has declined from being a major exporter of farm products to a food importer. He says this also helps explain why local industry has not been able to get past the threshold reached decades ago and that tourism is unsteady.
He added that the country "has been the dumbfounded spectator as the free trade agreements that are signed only benefit the foreign counterparts."
In addition, he rejected claims that local business idiosyncrasies or psychological quirks were the culprits.
He criticized the fact that the government is taking on debt not to invest, but to spend. He said that in 1990 subsidies and the service of the public debt was 22% of the total budget, but by 2007 these were more than 40%. He said there is a need to promote policies that stimulate more savings and investment, and less consumption.
He said that if we wanted things to change, government needed to act differently. "For that, its first responsibility is to impose the rule of the law. That means that the government must reinvent itself, but a strong government does not mean one that is bigger, rather one that is smaller and more efficient."
When introducing the speaker, AmCham's president, Alejandro Pena Prieto stressed that the government needs to fulfill its role as planner and promoter of public policies, regulator and supervisor, and stimulator of competitiveness."

Segura proposes more talk
Vice president of the State-owned Electricity Corporations (CDEEE) Radhames Segura attended the Am Cham luncheon yesterday and requested a turn after speaker Lisandro Macarrulla, president of the National Council of Business. When the protocol of the event did not permit this (as only written requests for questions are permitted when there is time), he called a press conference after the event and invited the business sector to join him in a summit to analyze the electricity sector and find solutions to resolve the electricity crisis.
Segura has been at the helm of the state electricity departments for more than seven years and reports show the situation has worsened, rather than improved. A recent TV investigative journalism show by Nuria Piera revealed that the CDEEE and its dependent departments employ dozens of highly paid consultants.

No electricity in south yesterday
The sudden collapse of the electrical system in the south of the DR left several provinces without power for 10 hours or more yesterday. Commercial activity in San Cristobal, Peravia, Azua, San Jose de Ocoa, San Juan de la Maguana and Barahona came to a stop and everyday things like a fan to cool down were unavailable to a population suffering through a heat wave.
The inhabitants of the region asked why this happened, but there were no answers forthcoming from Electricity Distributor EdeSur.
Listin Diario tried to track down some answers but as of 5pm, reporters could not get anybody to talk about the blackout.
Yesterday's blackout was just one of a wave of interruptions in the service, with many 10 and 12-hour outages occurring on a routine basis.
San Cristobal-based reporter Domingo Uribe told Listin Diario that, "the situation is so bad that even the 24-hour circuits are affected."
A public protest in San Jose de Ocoa was broken up by police with tear gas and billy clubs on the highway between Azua and Ocoa.

School schedule for 2009-2010
The Ministry of Education has announced that the school calendar for the year that starts 17 August nationwide has 197 days of class worked into 41 weeks of teaching, and an estimated 1,025 hours for public school. This is 17 fewer days compared to last year when there were 213 school days.
The Ministry of Education says the 2009-2010 school year launches the "Thousand hours of quality teaching" project at public school. This is an attempt to get public schools to complete the full schedule of 25 hours per week in grade schools and 1,200 hours of schooling in high schools.
First term examinations will again be held in December this year. The idea of the measure is to allow schoolchildren to enjoy the Christmas holidays and come back fresher for the next term.
Final year tests will be 22-25 June for grade school students, and those in adult education. Tests for high school will be 29 June to 2 July 2010.

Funglode to become university
The Global Foundation for Democracy and Development (Funglode) is on the way to becoming a full-fledged academic institution. Hoy reports that President Leonel Fernandez's think tank has already made the request for university category to the Ministry of Higher Education (SEESCYT).
The university would focus on careers in sociology and communication sciences, two subjects President Leonel Fernandez taught at the UASD state university prior to his days as a politician.
Hoy reports that President Fernandez has dedicated a considerable amount of time during his travels abroad towards signing agreements with international universities. Funglode already focuses on offering masters degrees jointly with Dominican and international universities.

New figures on BC webpage
Central Bank governor Hector Valdez Albizu has announced that as of 1 August the Central Bank website would provide new information that will provide a better understanding of the Dominican economy. According to Valdez, the bank's website will provide information on sector balances, analytical panoramas and new definitions on the monetary base and monetary aggregates.
These new statistics are part of the Harmonized Monetary and Financial Statistics (EMFA) package of information that will now appear on the bank's website.
Speaking for the Central Bank and for the Monetary Board, Valdez Albizu said that the new stats would include a new concept of the broader monetary base as well as new definitions of the M1 and M2 plus a new indicator that was not available before, the M3.
Valdez said that in order to ensure that no information is lost, the new statistics would co-exist with the more traditional figures on the website until users become accustomed to the new way of doing things. He added that another important feature is that the monthly series going back to 2001 have been put up so that researchers can use this data and statistical and econometric estimates.
He said that "beginning with the publication of the new monetary statistics, economists, analysts and students of the Dominican economy will have to speak of a 'before' and an 'after' since they will have an analytical tool that will allow then to have a better comprehension of the evolution of monetary and financial variables according to the IMF manual of monetary and financial statistics, and this will provide better prediction and forecasts in this area."

A billion plus for projects
In response to all the protest marches and other public manifestations of unrest, the government has promised to invest RD$1,785,277,649 in the provinces of San Cristobal and El Seibo over the next few months.
Diario Libre said that the announcement by the Presidential Press Office came just hours after the end of a meeting between the President and 21 officials responsible for executing the promised infrastructure projects that were discussed in four meetings held in the two provinces as well as in Samana and San Pedro de Macoris.
According to the statement, during the meeting the President asked the officials to speed up the work on construction and repair of projects all over the country, "so that the communities feel that the government is fulfilling the promises made". These projects include highways, housing, schools, rural roadways, sports venues, baseball stadiums, water treatment plants, street repairs and mobile economic kitchens.

Defending sale of Refidomsa
Secretary of the Presidency Cesar Pina Toribio has defended the sale of 49% of the shares of the Dominican Oil Refinery (Refidomsa) to the Venezuelan state-owned Petroleos de Venezuela (PDVSA). Pina Toribio said that the Dominican state was sovereign and had chosen the Venezuelan petroleum company as its partner in Refidomsa. "The Dominican government does not object to the sale of the shares being examined by any international organization," he said, as reported in Listin Diario.
US Representative Loretta Sanchez (D-CA) argues that the sale might violate the DR-CAFTA trade agreement. In a letter to the State Department, she writes: "There's concern that this agreement could have long-term devastating effects on the Dominican Republic. Considering the President's (Hugo Chavez) disquieting history of interference in the region, I ask the Department of State to observe this situation and its lack of transparency."
The Dominican government purchases most of its fuel from Venezuela, under the PetroCaribe Agreement, which comes with soft credit.
Refidomsa has capacity to refine 34,000 barrels, according to Listin Diario. President Hugo Chavez was due to visit Santo Domingo on 30 June, but he cancelled that trip following the political coup in Honduras. The government has set a US$130 million purchase price for the 49% stake, to be paid in petroleum.

Economists on free spending
Economist Isidoro Santana has questioned the government's free spending on current expenditures of near RD$16 billion a month, when income is at RD$19 billion. He criticized the government for irrational spending of taxpayer money. He told Hoy that current spending has been increasing, while the government has overlooked productive activities.
Economist Bernardo Fuente criticized the delays in posting information on public spending by the Ministry of Hacienda. He said this creates obstacles for economists who need to analyze the country's economic performance. He said the flow of information used to be much better in the past.

JCE audit reveals lack of controls
The audit carried out at the Central Electoral Board (JCE) by the Chamber of Accounts, covering government bookkeeping through 2008, revealed that more than RD$30 million was paid for military security services and the purchase of fuel during the presidential elections without invoices or documents recording how or what the money was spent on. There was also evidence of purchases of properties for a total value of over RD$44 million and, up until now, the property titles have yet to be transferred to the JCE.
Several other mistakes were found in the audit, including failure to pay VAT (ITBIS) taxes on RD$4,920,000 worth of invoices without written certification from the Department of Taxes (DGII) stating that the JCE was exonerated from payment.
The JCE also failed to deduct more than RD$650,000 in personal income taxes from some of its employees. The audit also found assets listed in the inventory that could not be found, including a 42-inch plasma screen television and a photocopier.
The list of errors also included payments for meals to military and police personnel without invoices or supervision, checks in transit for more than six months, and the payment of RD$246,280,213 in advertising without the providers providing certification that they are among government providers as required by the law. The JCE was also found to be lacking any system of monitoring their advertisements according to the terms of the contracts. The audit also questioned the JCE's business practices in the purchase and use of airtime.
Finally, the audit said that the JCE does not have an accounting system for their assets that allows them to account for the events that affect its financial situation and that reflect the assets, patrimony and obligations. The audit also mentioned the weakness in the control of the funds given to the political parties.

Doctors support strike
Doctors, nurses and other public health sector professionals gave massive support to the first day of the three-day strike. This was most noticeable in the consultation rooms and waiting rooms at the main public health facilities and the Dominican Social Security Institute that were nearly deserted yesterday.
As is the custom when there are labor stoppages, directors and other administrative medical staff in the hospitals and military personnel provided service to patients who went to the health facilities.
Dominican Medical Association (CMD) president Waldo Ariel Suero visited several hospitals in the National District and the province of Santo Domingo in order to check on the progress of the strike. Afterwards, he went to the Francisco Moscoso Puello Hospital with nurses' representative Minerva Marmolejos. Suero said that the strike would continue today and that tomorrow, Friday, he would report on the possibility of extending the strike into the coming week.
Still smarting from the aggressive way in which he and a group of colleagues were evicted from their occupation of the Ministry of Labor building, Suero said that President Leonel Fernandez has a point in his favor since he is the first Dominican leader to order the arrest and jailing (together with common criminals) of a CMD president. Former presidents of the Medical Association, who also condemned the action, went to the group's headquarters to offer their support to Suero in his struggle for better salaries.
The Ministry of Health has stood firm in its position that it would only increase doctors' wages if this can be pegged to productivity.

New cancer unit for kids
The General Hospital volunteers at the Plaza de la Salud have inaugurated the new "Consuelo Du-Breil de Bonetti" pediatric oncological unit aimed at providing integrated health care for children affected by cancer in the DR.
Speaking at the opening ceremony held yesterday, volunteers president Dr. Julio Amado Castanos Guzman said that this is the first step towards the dream of making it possible to treat children with cancer.
He said, "From now on children can receive chemo-therapy in an area designed exclusively for them, since before they did this together with adults."
The new area was built and equipped with a budget of RD$7,000,000 that was raised through different activities over the last few years. Monsignor Francisco Jose Arnaiz blessed the new unit during a ceremony that was attended by Jose Bonetti Guerra and Jose Manuel Bonetti Du-Breil, the widower and son of the philanthropist after whom the area was named.

Minimum wage goes into effect today
The increase in the minimum salary ordered by the National Committee on Salaries (CNS) goes into effect as of today. Workers in the private, non-sectored, work force will receive the wage increase, which is retroactive to 1 June 2009.
The increase enters into effect with the definitive publication of Resolution 1-2009 that establishes a 15% increase in the minimum salary for those workers in the private sector that is non-sectored. This means the wage increase will not affect employees in the free zone or tourism sectors.
As a general practice, though, many businesses will adjust wages of workers who make more than the minimum wage. Thus the increase in minimum wage usually brings about a wave of increases across the board in companies.
The decision was taken on 7 July in the session held at the CNS after listening to representatives of the employers and the workers of the sector.
The resolution establishes that the minimum wage will go from RD$7,360 to RD$8,465 for workers in large industrial, commercial or service businesses. Likewise, a wage increase from RD$5,060 to RD$5,820 for people who work in businesses whose installations or stored product is worth RD$2 million or more, and an increase from RD$4,485 to RD$5,158 for workers in the smallest businesses.
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