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Daily News - Monday, 30 November 2009

Key meetings for LF in Portugal
President Leonel Fernandez has held meetings with potential investors in Portugal, where he is due to attend the XIX Summit of Ibero-American Heads of State and Government, reports Dominican government news agency Antena en Linea. The investors expressed interest in electricity, renewable energy, construction, technology and circuit manufacturing. He met with the Espirito Santo Group, a leading Portuguese finance and investment consortium, and met with chief executives Manuel Fernando Espirito Santo and Pedro Neto. They focused on the possibility of the DR working in Brazil, Angola and Portugal through Espirito Santo connections.
Fernandez also met with the SAM Group and the BHM and outlined the creation of a US$50-US$60 million fund to build 2,500 houses for poor families, a project he said would begin in the first half of 2010, in coordination with local banking groups.
The President also spoke to the main executives of the EFACEC manufacturing group. This company makes electrical equipment and the Dominican leader explored the possibility of setting up a manufacturing operation in the DR.

Morales Troncoso in Germany
Foreign Minister Carlos Morales Troncoso is in Hamburg where he will give a talk on Dominican economic and business prospects at the Hamburg Chamber of Commerce on Tuesday, 1 December. European government and business representatives have been invited to the event where Morales will outline business opportunities in trade, infrastructure and energy, among other areas. He will hold meetings with officials at the German ministry of foreign relations including Minister Bernhard Graf von Waldersee. His agenda also includes talks on solar energy with Bosch Solar Energy AG. The Minister is in the country at the invitation of the Hamburg Chamber of Commerce and the Business Association for Latin America.
Following these meetings, Morales Troncoso will join President Leonel Fernandez in France for state meetings with President Nicolas Sarkozy.
See: www.bosch.de/start/content/language2/html/867.htm

CDEEE cost-cutting slow
Hopes have been high that the new administrator of the State-owned Electricity Companies (CDEEE) would eliminate the state electricity consortium's vast payroll burden in the short term, but this is proving to be easier said than done.
Listin Diario reports that new manager Celso Marranzini has only been able to trim excessive salary payments in the corporate unit. The newspaper points out that there have not been significant payroll reductions in the transmission, power generation or rural and suburban electrification units (UERS).
Citing a report sent by Marranzini himself, the newspaper says that in July 2009 the corporate unit had a payroll of RD$45.5 million with 1,437 employees at the end of Radhames Segura's term. In October it closed with RD$34.2 million and 938 employees, for 499 fewer employees.
Nevertheless, while in July wages at the UERS totaled RD$22 million (672 employees), in October it had only been reduced by RD$2 million (keeping 723 fixed employees), or RD$1.1 million less a month. Listin Diario points out that this unit even has its own public relations department.
The report also found that there were cuts to the Blackouts Reduction Program (PRA), which was eliminated prior to Marranzini's appointment by Decree 421-09, following a major political patronage scandal exposed by TV journalist Nuria Piera.
Moreover, the report says that between August and October the current debt the CDEEE maintained with power generators and the average of arrears increased. The debt increased from US$395.8 million to US$450.7 million, which means that the government is not making the transfers to cover the deficit. The newspaper report concludes by saying that the IMF funds have alleviated the situation, and stable service can be expected for the rest of the year, despite the instability of the San Felipe (Puerto Plata) and Haina power generators.

Migration deports, others let back in
On Saturday, Migration inspectors were surprised to see most of the people they arrested and deported on Thursday going about their tasks as if nothing had happened. One of the inspectors who took part in the roundup said that he felt helpless when he saw that some of the Haitians he had arrested on Thursday were on the streets of Santiago. "I can't believe that they are already back in the country so quickly...incredible... we are working for nothing," he told Hoy reporters.
He said that the same people who had been arrested and deported were at their usual spots begging for money on the city's main intersections.
In Santiago's Cienfuegos barrio where the roundup took place, residents complained about the Haitians' return.
Jesuit priest Father Regino Martinez, who coordinates the Frontier Solidarity movement in Dajabon, told reporters from the Spanish news agency EFE that the deportation of immigrants does not solve anything. He said, "You don't achieve anything with this, because while the Migration authorities are repatriating the undocumented immigrants, other authorities are letting them return". Martinez has continuously reported the toll military authorities charge for letting illegal immigrants through the border.

Thousands of HIV+ to get assistance
With the addition of around 10,000 people who are HIV+ into the Subsidized Regime of the Social Security Program as well as their inclusion in the government Solidarity welfare program, the Presidential AIDS Council (Copresida) and other non-governmental institutions will commemorate World AIDS Day tomorrow. In the first stage 7,000 people with HIV/AIDS will be added to the Social Security rolls through the National Health Insurance (SENASA) and 3,000 will get the Solidarity card on a gradual basis for those who apply together with their families, Copresida director Gustavo Rojas Lara announced yesterday. The beneficiaries currently receive coverage from the National Comprehensive Care Program run by the Ministry of Public Health.
World AIDS Day commemorative activities will begin with the declaration of 2 December as the School Day for HIV Prevention by Education Minister Melanio Paredes. The official activities, including guests Public Health Minister Dr. Bautista Rojas Gomez and Gustavo Rojas Lara, will begin at 9am at the Republic of Panama School. The event will be held simultaneously at all schools across the country.

Unsustainable borrowing?
In today's Hoy newspaper, former Central Bank operations manager Apolinar Veloz makes the point that the amount a country can borrow is determined by its capacity to pay, not by comparisons with the debt situation in other countries. He shares the concerns expressed by business groups and civil society about the spectacular increase in government borrowing, and concerns of the way government is using the borrowed money.
He warns that after the signing of the Stand-by Arrangement with the International Monetary Fund (IMF), the country could take on US$5.4 billion in debt over the next 28 months. He says that according to the Central Bank the public debt stock is US$11.435 billion, which would mean if all the credit that is now available were taken on, this would increase by 47.2%. He warns that the public debt is growing faster than the Gross Domestic Product. He points out that if the Central Bank's quasi-fiscal debt were added (US$547.4 million in 2009) then the public debt would be US$11.982 billion, or 5% more.
Veloz says that while to service the debt in 1996 the government had to use 8 cents of every peso, by 2008 it was using 34 cents of each peso, without taking the new loans and the arrears into account.
He drives home the important point: "If one considers the fixed expenditures of the central government that come from laws that specialize a certain proportion of the tax revenue, current expenditures due to the growth of the government payroll, political propaganda and political patronage (disguised as welfare), one can easily conclude that government constructions are financed with what is left over after covering their own political needs. To take on more loans to grow does not make sense when a significant proportion of the tax revenues are already being paid to international and domestic lenders".
Veloz says that government savings are negative, especially in recent years, when taxes lag behind expenditures. He makes the point that the government had cash flow quarterly deficits at the time of closing the agreement with the IMF, which has led the government to finance itself with arrears in its payment of debt. The Ministry of Hacienda estimates a deficit of around US$1.246 billion for the year-end and US$1.324 billion for 2010. In other words, the tax revenues are not enough to cover government spending, neither for 2009 nor during 2010.
He says it is clear that taxpayers will have to pay to service the public debt. He says that Latin American countries that followed this path became poorer, there was an increase in unemployment, inflation increased, and there were successive deficits in the current account and a major flight of capital.
"The current administration is spending today what it does not have (increasing public debt) and tomorrow it will need more money (from taxpayers) to pay the public debt, which will reduce money in circulation, consumption and aggregate demand will drop, with a decline in future economic growth. This will then lead to an increase in taxes," he writes.
He concludes that if this administration cannot show progress in reducing poverty during its boom years (2005-2008), one cannot expect it will do so during the current economic crisis. But he then warns that government officials reason that within the euphoria of short-term growth that borrowing generates... in the long term we will all be dead."

Whose stats to believe?
Writing in today's El Caribe, former economic advisor to the Hipolito Mejia government Andres Dauhajre highlights the marked difference between Department of Taxes (DGII) and Central Bank statistics by presenting them side by side:
The Central Bank has announced that in the third quarter of the year the GDP grew 3.4%, and that there has been accumulated growth of the Dominican economy of 2.1%. He points out that this growth has happened at the time the DGII has reported drops in key indicators. These indicators showing declines are:
National exports (34.2%), free zone apparel 27.6%, imports 32.3%, tourism receipts 5.8%, remittances 5.2%, direct foreign investment 41%, total sales registered by the DGII 17%, sales in all sectors taxed by ITBIS 13%, sales in the industrial sector 13.5%, commercial sales 15.3%, real estate sales 25.8%, cement sales 21.2%, steel rod sales 38.1%, rentals taxed by ITBIS 18.8%, financial sector operations taxed by ITBIS 9.2%, vehicle sales 47%, total government revenues, including disbursements of loans 14.8%, capital expenditures 65.2%.
Furthermore, Dauhajre matches DGII and Central Bank stats by sector:
Construction sector decline was 14% (CB) and 25.8% (DGII). Commercial sector 4.4% (CB), 14.3% (DGII), Industrial sector is down 1.3% (CB) but 13.5% (DGII). Transport sector 1.4% (CB), 15.7 (DGII).
Or the Central Bank estimates there has been an increase in housing rentals of 3.3%, but the DGII reports a decline of 18.8%. The CB says that other services grew 6.8%, but the DGII reports a decline of 17.2%. The CB says telecommunications grew 16.7%, but the DGII says it grew 2.8%.

Five provinces needed to win
According to Diario Libre, 6.1 million Dominicans will have the right to vote in the 16 May 2010 municipal and congressional elections. Candidates will be elected for a 6-year term. About 54% of voters are concentrated in just five areas: The province of Santo Domingo (20%), the National District (13%), Santiago (11%), San Cristobal (5.5%) and La Vega (4.6%). Other major cities are San Francisco de Macoris with 221,311 voters, Puerto Plata with 212,511, San Pedro de Macoris (183,968), Moca (166,516) and San Juan de la Maguana (162,656).
There are 329,429 new voters compared with the voter rolls used in the 2008 presidential elections. There are 3,060,237 (50.50%) women voters and a very slightly smaller total of male voters, 2,999,885 (49.50%). There are 32 provinces, 155 cities and 229 municipal districts, 3,975 polling stations and 13,583 voting booths.
Of the 329,439 new voters, there are 211,824 new registrations, 781 rehabilitated, 11,571 change of blue plastic, and 33,086 people attaining voting age. A total of 29,688 voter cards were cancelled due to deaths, duplications, false data and other issues.

PLD party primaries
The current mayors of the National District and Santo Domingo East, TV personality Roberto Salcedo and gaming czar Juan de los Santos head up the voting in their quest for re-election in their respective municipalities, running for the Dominican Liberation Party (PLD). The results of the first bulletin of the second stage of the election of PLD candidates indicate that Salcedo received 65% of the ballot. Elias Serulle follows with 27.9% and in third place is the former District Attorney of the National District, Manuel Hernandez Peguero with 6.7%.
Meanwhile, at congressional level the aspiring candidates for deputy say Miriam Cabral received the most votes in District 1, Tobias Crespo, in District 2 and Pedro Juan Melendez in District 3. So far the votes have been counted in 257 of the 312 polling stations.
At the same time, Juan de los Santos leads voting in Santo Domingo East with almost 75% of the votes. He is followed by Eladio Martinez with 23%. The voting for deputies has given the most votes in each of the districts to Radhames Fortuna, Manuel Jimenez, Alfredo Martinez, Miguel Espinal, Gertrudis Ramirez and Carlos Guzman. In Santo Domingo East, votes from 434 of 587 polling stations have been counted.
Information on voting in Santo Domingo North and Boca Chica was not included in the first bulletin. According to the president of the PLD National Electoral Commission, Minister for Women Alejandrina German, they have not been able to count a significant number of polling stations in these municipalities. She pointed out that in the case of Santo Domingo North the computations only cover 3% of the voting. The current mayor of SDN, Jesus Feliz is seeking re-election on the PLD ticket.
When the first bulletin was released, the sixth of the PLD electoral process that went through the first stage last weekend, they had completed the count at municipal level in Miches, Hato Mayor, Sabana de la Mar and Guaymate. The voting was held on Saturday in the National District, the province of Santo Domingo, the eastern regions and the northeast. In this second stage, it is expected that some 900,000 party faithful will take part in the voting.

PRD primaries
Despite reports of minor incidents at some voting tables, the first phase of the PRD XXVIII Extraordinary Convention went off without major issues in the National District, the provinces of Santo Domingo, La Altagracia, La Romana, San Pedro de Macoris, Hato Mayor and Monte Plata. These areas were designated for the election of candidates for congressional and municipal posts that were not reserved by the party hierarchy. During a trip by Diario Libre reporters during the first hours of the process, there was little movement at the voting centers of the National District, whereas in the rest of the provinces where the process was under way, voting proceeded in an orderly manner. Only a few people were at the centers located in Bella Vista, Ciudad Colonial and the Juan Pablo Duarte High School. At the Republic of Argentina High School, voting had not yet started at 10:00 in the morning. Nevertheless, the centers in Cristo Rey and San Carlos registered a greater flow of voters.
In a brief statement read at the PRD computer center last night, Convention Organizing Commission president Hugo Tolentino Dipp said the event had been successful and highlighted the PRD membership's exemplary behavior. Nonetheless, he did say that no partial results would be available until the information is completed in the municipal districts and cities at all levels.
After exercising his right to vote, PRD president Miguel Vargas Maldonado said that the "white" party would respect the results (of the voting) since, "despite the differences, the party respects the democratic process." As he left the Padre Valentin School in the Bella Vista sector, Vargas Maldonado described the process as "organized and enthusiastic".
Former President Hipolito Mejia, who is out of the country, did not vote yesterday. He was supposed to vote at the Santa Teresa de Jesus Primary School. The process was suspended in the voting center at the Billeteros Club in the Tres Brazos sector in Santo Domingo East because the people in charge did not show up. Also, at the Patria Mella School in the same municipality, one city council pre-candidate fired his pistol several times because he was opposed to the polling station closing at 4pm.

Good days for banana exports
Dominican banana exports increased from US$104 million in 2008 to US$158 million this year. Exporter Luis Bonilla says that shipments are at a level of around 3,000,000 18kg boxes per week. He said planted areas have increased from 160,000 tareas to 220,000 (1 tarea = 629m2). Bonilla said that lands formerly used for rice is being converted for banana cultivation. He forecast another increase for 2010 compared to 2009. As reported in Hoy, he said there are an estimated 2,000 banana producers. He said prices are getting better, and are now at US$742 a ton, on average.

Fenacerd proposes compensation
The National Trade and Business Federation (Fenacerd) is calling on the electricity distributors to create mechanisms for compensating paid up customers. The idea is to help provide incentives for prompt payment. Fenacerd president Roberto Rosario, who represents 30,000 members from the trade and business community, was speaking at a seminar on "The Impact of the Energy Sector Problems on Business and Traders", which was held jointly by Fenacerd and the State-owned Electricity Companies (CDEEE) at the Howard Johnson Hotel in San Pedro de Macoris. Rosario said that the Federation backs electricity sector efforts to punish people or companies that avoid paying for electricity, but they also feel that any entity that is up to date with its electricity bill payments and is still enduring long, long blackouts should also be considered for some sort of compensation. He called on the membership to reject what he described as "unscrupulous" offers to commit energy fraud. CDEEE executive vice-president Celso Marranzini also attended the seminar.

DNCD makes another haul
The National Drug Control Department seized 130 bricks of a substance suspected to be cocaine on Saturday. The alleged drugs were hidden in sacks of yautia (taro or manioc) and sweet potato that were to be exported to Puerto Rico on the ferry later in the day. The container was seized at the Duarte Highway Km25 tollbooth. The DNCD said that the crops had been packed by the Feliz Sabatino Rodriguez exporting company from San Juan de la Maguana and were consigned to Taino's Produce, Inc. of Mayaguez, Puerto Rico. DNCD chief Major General Rolando Rosado Mateo was present when the drug was confiscated. DNCD spokesman Roberto Lebron told reporters that the bricks had been coated with mayonnaise, mustard and coffee in an attempt to mask the smell and throw off the authorities.

Gallup poll on drug trafficking
Results of a Gallup-Hoy poll indicate that 52.6% believe drug trafficking has penetrated the DR because of complicity between drug dealers and the authorities. 80.4% of those polled believe that drug trafficking is on the rise. Interestingly, 92% of polled citizens who have higher education studies think that drug trafficking has increased.
To support the statement, 70% of adults of voting age in the DR believe fugitive money-laundering suspect Sobeida Felix Morel escaped with the help of the authorities. Only 12% perceive her disappearance as the result of negligence by the authorities. Sobeida Felix is linked to Jose Figueroa Augusto, a Puerto Rican drug trafficker who is also a fugitive from Puerto Rican justice.
80.4% of those polled think that drug trafficking has increased over the last year.
56% described the DNCD, the Police and the National Drug Council, prosecutors and judges' efforts in fighting drug trafficking as "positive".
83.1% said they were against legalizing drugs in the country.

Prosecutor says Baldera's captors were executed
The commission that investigated the deaths of two men suspected of involvement in the kidnapping of Eduardo Baldera Gomez has established that their deaths were the result of executions and not the consequence of a gun battle. During a press conference led by Prosecutor General Radhames Jimenez, it was recommended that Lieutenant Colonel Alberto Trejo Perez, Majors Jesus Rafael Tejada Tejada and Franklin Santana Martinez as well as Second Lieutenants Jose Luis Peralta Valentin and Catalino de Jesus Perez should be charged with homicide and sent to trial.
The case involves the deaths of suspected kidnappers William de Jesus Batista Checo and Cecilio Diaz (Manuel). It was also recommended that Second Lieutenant Ramirito Dume Nina should be sent to trial as an accomplice to the killings, since he received both men alive from the locals who took them in. The commission also recommended administrative punishments for both Navy sergeant majors and the sailor who lied to the investigators. The commission also handed over the RD$5000 that was given to the local bailiff, Lino Socio Gonzalez Morel in an apparent attempt to keep a lid on things.

Weekend baseball
On Friday night, the Aguilas Cibaenas came from behind to defeat the league-leading Leones del Escogido 7-5. Surprisingly, the Aguilas came up with a 4-run rally in the top of the ninth inning, after losing a 3-2 lead in the eighth and on the short side of a 5-3 score. The win stops a 3-game slide for the Aguilas. The Leones were still in first place. In San Francisco de Macoris, The Gigantes del Cibao solidified their chances to make the playoffs by defeating the cellar-dwellers from San Pedro de Macoris, 5-4. The Estrellas lost for the 21st time. Over in La Romana, the Tigres del Licey beat up on the Toros del Este, winning 10-1.
On Saturday, this time in the venerable Estado Quisqueya in Santo Domingo, the Tigres had a harder time of it, winning in the bottom half of the ninth inning and leaving the Toros with nowhere to go. The Toros started with 4 runs in the first half of the first inning, but could not hang on as the Tigres came back with 4 of their own in the fourth. In a continuation of Inter-League play, the Leones of Ponce, Puerto Rico defeated the Gigantes del Cibao 6-5, and Miguel Negron led Arecibo's Lobos to an 11-9 win over the Estrellas Orientales. At home the Leones del Escogido defeated the Aguilas in Santiago 4-3.
On Sunday, eternal rivals the Tigres and Leones met once again, with the Tigres winning 9-2 and creeping to within a half a game of first place in the standings. In Santiago, the Aguilas defeated the Lobos from Arecibo, Puerto Rico by a score of 2-0 behind the wonderful pitching of Jud Jukich. And in Puerto Rico, the Gigantes del Cibao defeated the Gigantes of Carolina in a clash of titans with a score of 4-2.
Team W-L Avg. Diff.
ESCOGIDO 21 - 13 .618 --
LICEY 21 - 14 .600 0.5
AZUCAREROS 18 - 16 .530 3.0
GIGANTES 17 - 18 .486 4.5
AGUILAS 16 - 19 .457 5.5
ESTRELLAS 12 - 22 .353 9.0
Games today
* Santo Domingo, Estadio Quisqueya, 7:30pm.
Escogido (N. Rodriguez) vs Arecibo (N/A)
* San Pedro de Macoris, Estadio Tetelo Vargas, 8pm.
Toros (E. Valdez) vs Estrellas (L. Gulin)
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