News on the Economy

The government has made more than RD$13 billion worth of cutbacks in state spending, except in Health and Education, especially in the areas of goods and services as well as some internal financing that was obtained and was within the budget. The adjustments were made in response to the RD$21 billion shortfall in income so far this year.
Minister of Hacienda Vicente Bengoa and Budget Director Luis Hernandez made this announcement, and went on to report that the Board of Directors of the International Monetary Fund (IMF) would meet on 6 November to review the Letter of Intent from the Dominican Government.
Bengoa said that the US$1.7 billion that the Dominican government will get from the International Monetary Fund is the same funding that was assigned in this year's Budget, but because of the problems that have arisen it had not been possible to disburse it.
The government does not have an allocation for a wage increase for doctors in next year's budget, which will be presented on 15 November, according to the law, due to the fact that there was no agreement for a salary adjustment with this sector, announced Bengoa. He said that the government has paid internal and foreign debts on time since 2008 and said that the 2010 budget would be similar to this year's, with some slight increases, which is normal. He also reported that the US$300 million of the US$500 million loan that was approved by the Inter-American Development Bank for the support of the budget segment designed to help the poor, will be disbursed this year and the other US$200 million in 2010. Part of these resources will be used to for focused subsidies.
He said that the government would include 400,000 people in the National Health Insurance (Senasa) and 280,000 in the Comer es primero (Eating Comes First) programs, and would focus on the Bonoluz and the Bonogas programs, since the money is for this purpose. Hernandez said that they were working on the first phase of the 2010 Budget and were about half way through. He said that the institutions had to submit their budgets by 28 October. Bengoa said that the 2010 Budget would be sent to Congress within the timeframe established by the Constitution, adding that this means that the deadline is next 15 November. For more details on the IDB loan, see:
www.iadb.org/news/detail.cfm?language=English...

23 October 2009 - DR1 Daily News

Krispy Kreme, the popular American doughnut chain, is coming to the Dominican Republic, for all to enjoy. The brand, which gained its fame for their hot-out-of-the-oven glazed doughnut, will open 14 stores throughout the DR within five years. The announcement of the doughnut chain is a sign of the growing local purchasing power and the acceptance of foreign brands in market. Krispy Kreme will join the likes of Papa Johns, Quiznos, Wendy's, McDonald's, Kentucky Fried Chicken and Burger King as the major international food chains in the DR.
http://finance.yahoo.com/news/...

22 October 2009 - DR1 Daily News

According to the Minister of Economy, Planning and Development, Temistocles Montas, non-petroleum imports from the US fell by 23% in August and DR exports to the US have fallen by 18% during the same period. Montas said that the international financial crisis is affecting female workers the hardest. Montas made these statements during a seminar "Analysis of the global financial crisis from a gender perspective: Its impact on women" organized by the Ministry of Women, the United Nations Development Program (UNDP) and the International Labor Organization (ILO)
Montas added that the DR has a high level of poverty, with 35% of the population living below the poverty line.

22 October 2009 - DR1 Daily News

Sugar, tobacco and products that aid in blood transfusions lead the list of the DR's most exported products during the first seven months of 2010. Hand-made cigar exports grew by 0.94%, going from US$124.2 million to US$131.8 million. Products for blood transfusions grew by 3.21% going from US$233 million to US$258.9 million, with the product being exported mainly to the US, Puerto Rico, Holland, China, Venezuela, Germany, India, South Korea, Singapore, France, Colombia, Canada, Thailand and the Central African Republic. The 31 most exported products by the DR generated US$1.1 billion in revenue, for a 30.6% increase from the same period in 2008. Exports of these 31 products during the first seven months of 2008 totaled US$805.9 million. Other high-volume exports included cacao, disposable bed sheets, medical supplies, fresh bananas and beer.

21 October 2009 - DR1 Daily News 

The president of the Dominican Association of Free Zones (ADOZONA), Fernando Capellan, has revealed that exports from the nation's industrial free zones continue to decrease with the resulting loss of 8,000 jobs. He said that in the first half of the year exports were off by 22%, going from US$2.208 billion in the first half of 2008 to US$1.724 billion for the same period this year, a decrease of US$483.9 million. Capellan said that it was not just textile exports that were down. Electronics were 50% less and jewelry was 59% less in the first half.
As reported in El Caribe, even tobacco, a Dominican tradition for more than 300 years, was down 8%, shoes 12% and "other products" down 21%. Perhaps ironically medicines and pharmaceutical products were up.
The Adozona leader and his executive vice-president, Jose Manuel Torres, told reporters that on 30 October the association would hold a seminar called "Inteport: towards an export mindset". The event will feature Miami Herald columnist and bestselling author Andres Oppenheimer.

16 October 2009 - DR1 Daily News 

The Ministry of Hacienda will submit a bill to Congress for the modification of the 2009 budget, including an extra US$137 million for paying the government's US$566 million debt to the energy generators. Minister of Hacienda Vicente Bengoa said that the World Bank and the Inter-American Development Bank are in the process of auditing the State-owned Electricity Companies (CDEEE) in order to determine how much they really owe the generators. He added that once the actual debt amount is confirmed the government would figure out how to pay it, once and for all. He also informed that during the current administration US$4 billion has been paid towards the debt, with no results. Bengoa said this was a tragedy.

14 October 2009 - DR1 Daily News 

The gravy train made another stop at Congress yesterday, as legislators approved a series of loans in dollars and euros totaling US$82.3 million. The funds will be used for government and public works projects. One of the loans is worth US$48,743,918, and will be used for the Corredor Duarte highway project being built in Santo Domingo. A further US$20 million will be spent on road repairs. Finally, RD$9.2 million will be used to expand the Plan Sierra reforestation program.

14 October 2009 - DR1 Daily News 

The fuel-price roller coaster is on the way up once again as the Ministry of Industry and Commerce announced price increases of as much as RD$4.40 per gallon. Premium gasoline goes up RD$4.00 to RD$149.90, regular goes to RD$139.90, a RD$4.40 increase. Diesel fuel went up to RD$119.40 for regular and RD$124.40 for premium, RD$2.70 increases for each. Even LPG was increased by RD$0.43 a gallon, now selling for RD$67.29.
According to the ministry, international prices experienced significant increases over the last week, pushed by better than expected economic news and a weaker dollar. Lower than expected unemployment numbers in the United States, an increase in raw material costs and Alcoa's return to positive earnings all helped to push shares and the prices of oil and derivatives. Alcoa reported surprising earnings on Wednesday and retailers reported sales increases for September, giving rise to improved expectations for recovery.

12 October 2009 - DR1 Daily News 

The National Business Council (CONEP) says it will support the forthcoming IMF Stand-by Arrangement with the government on the grounds that the agreement would stabilize macro-economic elements by reactivating the economy. According to El Caribe, the main group representing the business sector in the Dominican Republic warns against further increases in the foreign debt or any new taxes, saying that current tax levels are sufficient to affect investments. CONEP sees the IMF agreement as a positive step in the face of the global economic crisis, whose main effects have been "the decrease in hard currency income at the same time as a decrease in the price of oil".
The document emphasizes the need for measures to provide more jobs and pour more resources into investment projects while preserving the DR's productive infrastructure. They said that "while the monetary authorities have been adopting measures to loosen the instruments of monetary policy, with the signing of the agreement with the IMF, greater resources will move quickly towards the productive sectors and in this way it is expected that there will be much greater economic activity." They reiterated their position that the investments should be in the framework of a program that prioritizes social spending, while taking into account the considerable levels of foreign debt and the effects on the nation's GDP.

12 October 2009 - DR1 Daily News 

The DR and Chile have agreed to strengthen bi-lateral relations and will form a Feasibility Group aimed at developing economic and commercial opportunities between the two countries. The decision was made during a meeting that took place on 5 October and 6 October at the Foreign Relations Ministry. The meeting included discussions on cultural, political and cooperation opportunities.

08 October 2009 - DR1 Daily News