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News on the Economy
With no new taxes IMF accord is near
Today sees the end of the two-week visit by the International Monetary Fund (IMF) mission to the country. Hacienda Minister Vicente Bengoa said that the draft of the letter of intent and the agreements include a disbursement of US$990 million this year, of which US$690 million are in the budget.
Bengoa said that the US$990 million would be received after the IMF agreement was signed. He said of these, US$300 million would be from the World Bank, US$390 million from the Inter-American Development Bank (IDB) and US300 million from the IMF.
Bengoa said that a further US$150 million would be received from the IMF next year.
The letter also establishes that in 2010 the government will place US$1 billion in sovereign bonds. The agreement will not include new taxes. The government does have plans to review tax incentives that are in place.
The government announced that it would send a bill requesting transfer of funds between government departments.
Bengoa said that although the government has a fiscal problem, the IMF mission has stated the performance of the Dominican economy is one of the best in the region.
18 September 2009 - DR1 Daily News
Bengoa said that the US$990 million would be received after the IMF agreement was signed. He said of these, US$300 million would be from the World Bank, US$390 million from the Inter-American Development Bank (IDB) and US300 million from the IMF.
Bengoa said that a further US$150 million would be received from the IMF next year.
The letter also establishes that in 2010 the government will place US$1 billion in sovereign bonds. The agreement will not include new taxes. The government does have plans to review tax incentives that are in place.
The government announced that it would send a bill requesting transfer of funds between government departments.
Bengoa said that although the government has a fiscal problem, the IMF mission has stated the performance of the Dominican economy is one of the best in the region.
18 September 2009 - DR1 Daily News
Deficit not sustainable
The DR's current budget deficit is not sustainable, according to Franco Uccelli, vice president of JP Morgan's Emerging Markets department. Uccelli expects the DR will end the year with a 3.5% deficit in its GDP, twice what the government had forecast. He spoke during a breakfast organized by the Spanish Chamber of Commerce.
Uccelli believes that to finance this deficit is unsustainable.
Uccelli said that considering possible projections by the World Bank, the DR's deficit in the non- financial public sector could finish at 4.7%.
The economist said that for the first time since 2004 the DR will finish the year with its deficit at more than 40% of its GDP. Ucelli says that the energy sector and fiscal issues are the nation's two biggest negative risk factors at the moment.
There is good news, according to Uccelli, who says the DR will finish the year with a 2% economic growth and could grow 4.5% in 2010.
Growth would be spurred by exports, remittances, tourism and investment, as the US economy recovers. The US is the DR's main trading partner. "The economy in the DR is very closely tied to the US," he says.
16 September 2009 - DR1 Daily News
Uccelli believes that to finance this deficit is unsustainable.
Uccelli said that considering possible projections by the World Bank, the DR's deficit in the non- financial public sector could finish at 4.7%.
The economist said that for the first time since 2004 the DR will finish the year with its deficit at more than 40% of its GDP. Ucelli says that the energy sector and fiscal issues are the nation's two biggest negative risk factors at the moment.
There is good news, according to Uccelli, who says the DR will finish the year with a 2% economic growth and could grow 4.5% in 2010.
Growth would be spurred by exports, remittances, tourism and investment, as the US economy recovers. The US is the DR's main trading partner. "The economy in the DR is very closely tied to the US," he says.
16 September 2009 - DR1 Daily News
Customs gets better
A World Bank report indicates that the DR's Customs Department (DGA) is second in Latin America in having achieved reductions in cost and paperwork for imports and exports. Customs director Rafael Camilo welcomed the news, describing it as important and transcendental. The DR is listed 2nd on the list in 2009 in the Trading Across Borders category, up from 36th in 2008.
http://www.doingbusiness.org/economyrankings/?regionid=3
16 September 2009 - DR1 Daily News
http://www.doingbusiness.org/economyrankings/?regionid=3
16 September 2009 - DR1 Daily News
Room for more China-DR trade
Wang Zhen, director for the Foundation for International Studies, said yesterday that of the 20 Latin American nations that trade with China, the DR has the largest trade deficit. China traded US$140 billion with Latin America in 2008.
Trade with the DR was about 10% of the total, but one-sided. Over the past 4 years, Chinese exports to the DR add up to nearly US$1.4 billion. The DR exported only US$290 million to China during the same period.
Zhen made these comments after taking part in a seminar on Chinese foreign trade and foreign relations policies for Latin America at the Dominican Republic Center for Exports and Investment (CEI-RD). Eddy Martinez of CEI-RD said that President Leonel Fernandez is interested in increasing trade with China.
"It is not necessary to trade with China, it is obligatory," said Martinez. He said the DR could increase its exports of farm produce and industrialized farm products to China, including rum, cigars, coffee and cacao.
The CEI-RD is coordinating Dominican participation in the Shanghai Trade Fair in 2010. The DR will have a stand exhibiting Dominican products during six months. Zhen has recommended efforts be undertaken to increase knowledge of the DR in China, and China in the DR.
The US$290 million consists primarily of ferronickel exports, which have been suspended. Also exported is metal scraps and copper. Copper exports are controversial because a large percentage of the material is taken from stolen cables and wires.
See http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=34164 for background on China's new policies with Latin America.
See http://news.xinhuanet.com/english/2008-11/05/content_10308117.htm for the White Paper on Chinese-Latin American relations.
16 September 2009 - DR1 Daily News
Trade with the DR was about 10% of the total, but one-sided. Over the past 4 years, Chinese exports to the DR add up to nearly US$1.4 billion. The DR exported only US$290 million to China during the same period.
Zhen made these comments after taking part in a seminar on Chinese foreign trade and foreign relations policies for Latin America at the Dominican Republic Center for Exports and Investment (CEI-RD). Eddy Martinez of CEI-RD said that President Leonel Fernandez is interested in increasing trade with China.
"It is not necessary to trade with China, it is obligatory," said Martinez. He said the DR could increase its exports of farm produce and industrialized farm products to China, including rum, cigars, coffee and cacao.
The CEI-RD is coordinating Dominican participation in the Shanghai Trade Fair in 2010. The DR will have a stand exhibiting Dominican products during six months. Zhen has recommended efforts be undertaken to increase knowledge of the DR in China, and China in the DR.
The US$290 million consists primarily of ferronickel exports, which have been suspended. Also exported is metal scraps and copper. Copper exports are controversial because a large percentage of the material is taken from stolen cables and wires.
See http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=34164 for background on China's new policies with Latin America.
See http://news.xinhuanet.com/english/2008-11/05/content_10308117.htm for the White Paper on Chinese-Latin American relations.
16 September 2009 - DR1 Daily News
Government into business
The National Business Council (CONEP) held a press conference yesterday to express concern that text has been included in the constitution bill now into its second reading in Congress that would enhance the government's role as a business entity. CONEP president Lisandro Macarrulla says that government should be a regulator, not a participant in business activity. He is referring to the clause that states that the government "can on its own or in association with private business, exercise business activity." CONEP says that this would turn government into a formidable competitor in business, violating the current rules of the game and creating a situation of inequity as well as opening doors to unfair business practices that are now penalized by free trade agreements.
15 September 2009 - DR1 Daily News
15 September 2009 - DR1 Daily News
Full Russian embassy
Russia is considering opening a full embassy in the DR, according to a joint statement issued by the governments of the Dominican Republic and the Russian Federation following the 7-11 September visit by Foreign Minister Carlos Morales Troncoso to Russia last week. The Ministers noted the positive dynamics in bilateral political, economic and trade ties with satisfaction, and affirmed their shared mindset to deepen mutually beneficial and equitable cooperation, especially in areas such as energy, including the hydrocarbons industry, transport, tourism and education.
It was also agreed that the DR would open a consulate general in St. Petersburg.
For the complete Joint Statement by Carlos Morales Troncoso and his counterpart Sergey Lavrov of Russia, see www.isria.com/pages/10_September_2009_72.php
14 September 2009 - DR1 Daily News
It was also agreed that the DR would open a consulate general in St. Petersburg.
For the complete Joint Statement by Carlos Morales Troncoso and his counterpart Sergey Lavrov of Russia, see www.isria.com/pages/10_September_2009_72.php
14 September 2009 - DR1 Daily News
New company law boosts ranking
The Doing Business 2010 report, recently published by the World Bank now ranks the DR in 86th place of 183 countries. The DR climbed 16 places, up from 102 in the 2009 report.
See http://www.doingbusiness.org/
Maria Victoria Abreu, of the National Council of Competitiveness (CNC), says that the new Corporation Law (No. 479-08) promoted by the CNC made all the difference. She explained the new law calls for new modern corporate structures, in addition to significantly easing company formation.
See http://www.doingbusiness.org/economyrankings/
For more on CNC efforts and an overview on competitiveness in the DR, see http://competitividad.org.do/
11 September 2009 - DR1 Daily News
See http://www.doingbusiness.org/
Maria Victoria Abreu, of the National Council of Competitiveness (CNC), says that the new Corporation Law (No. 479-08) promoted by the CNC made all the difference. She explained the new law calls for new modern corporate structures, in addition to significantly easing company formation.
See http://www.doingbusiness.org/economyrankings/
For more on CNC efforts and an overview on competitiveness in the DR, see http://competitividad.org.do/
11 September 2009 - DR1 Daily News
IDB will give budget help
The Inter-American Development Bank (IDB) has agreed to lend the DR US$500 million to supplement the DR's national budget. IDB representative in the DR Manuel Labrado said the loan would be issued with the signing of the forthcoming Stand-By Arrangement with the International Monetary Fund (IMF).
Although government revenues are RD$10 billion less than budgeted for the first semester of 2009, an increase in government spending and a lack of control on fiduciary matters is said to have increased the nation's budget deficit.
Labrado also announced that the World Bank would be lending the DR an additional US$150 million to be used for the energy sector. Manuel Labrado said that the US$150 million could be used to purchase and install meters to control consumption. It is estimated that 1.1 million households in the DR do not pay for electricity service.
Labrado made these comments after signing a cooperation agreement with Administrative Minister Ramon Ventura Camejo, aimed at drawing up salary policies for the DR's public sector. As part of that agreement the IDB will donate up to EUR100,000 for technical support and the program will last for 9 months. These funds will come from the Spanish General Cooperation Fund.
10 September 2009 - DR1 Daily News
Although government revenues are RD$10 billion less than budgeted for the first semester of 2009, an increase in government spending and a lack of control on fiduciary matters is said to have increased the nation's budget deficit.
Labrado also announced that the World Bank would be lending the DR an additional US$150 million to be used for the energy sector. Manuel Labrado said that the US$150 million could be used to purchase and install meters to control consumption. It is estimated that 1.1 million households in the DR do not pay for electricity service.
Labrado made these comments after signing a cooperation agreement with Administrative Minister Ramon Ventura Camejo, aimed at drawing up salary policies for the DR's public sector. As part of that agreement the IDB will donate up to EUR100,000 for technical support and the program will last for 9 months. These funds will come from the Spanish General Cooperation Fund.
10 September 2009 - DR1 Daily News
Signing agreements with Russia
The foreign ministers of Russia and the DR, Sergei Lavrov and Carlos Morales Troncoso have signed agreements on air traffic, elimination of visas for government officials and diplomats, and for strengthening ties in the areas of tourism, culture, transportation and energy in Moscow yesterday.
As reported in El Caribe, preparations are under way for the start of a regular flight from Russia. An estimated 50,000 Russian tourists fly to the DR every year on board charter flights. A Russian mission is expected in Santo Domingo for talks leading to the signing of an aviation agreement with Russia.
The talks also mentioned the possibility of using Russian technology for the planned Santiago-Santo Domingo railway.
In Moscow, Morales Troncoso advocated for Russian government attention to obstacles to the export of Dominican cigars to Russia. He said that preferences favor importing Cuban cigars. The DR has a EUR38 million trade deficit with Russia. Morales feels cigar exports could reduce the trade imbalance.
Foreign Minister Sergei Lavrov accepted an invitation to visit the DR in the near future.
Furthermore, the ministers agreed on the advantages of establishing a Russian Chamber of Commerce in the DR to encourage new business deals.
10 September 2009 - DR1 Daily News
As reported in El Caribe, preparations are under way for the start of a regular flight from Russia. An estimated 50,000 Russian tourists fly to the DR every year on board charter flights. A Russian mission is expected in Santo Domingo for talks leading to the signing of an aviation agreement with Russia.
The talks also mentioned the possibility of using Russian technology for the planned Santiago-Santo Domingo railway.
In Moscow, Morales Troncoso advocated for Russian government attention to obstacles to the export of Dominican cigars to Russia. He said that preferences favor importing Cuban cigars. The DR has a EUR38 million trade deficit with Russia. Morales feels cigar exports could reduce the trade imbalance.
Foreign Minister Sergei Lavrov accepted an invitation to visit the DR in the near future.
Furthermore, the ministers agreed on the advantages of establishing a Russian Chamber of Commerce in the DR to encourage new business deals.
10 September 2009 - DR1 Daily News
CPI influx
The Consumer Price Index (CPI) has increased by 0.85% compared to the month of August, announced the Central Bank.
The CB explains that because of this accumulated inflation during the first 8 months of the year reached 4.19%, below that of the same period in 2008, when the CPI was 9.41%.
The 12-month inflation rate, measured from August 2008 to August 2009, registered at 0.47%.
The transport sector experienced a 2.32% in growth due to an increase in gas prices, while housing experienced a 1.32% growth.
Education was up 1.37%, while foods, drinks and tobacco grew by 0.25%.
09 September 2009 - DR1 Daily News
The CB explains that because of this accumulated inflation during the first 8 months of the year reached 4.19%, below that of the same period in 2008, when the CPI was 9.41%.
The 12-month inflation rate, measured from August 2008 to August 2009, registered at 0.47%.
The transport sector experienced a 2.32% in growth due to an increase in gas prices, while housing experienced a 1.32% growth.
Education was up 1.37%, while foods, drinks and tobacco grew by 0.25%.
09 September 2009 - DR1 Daily News