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Daily News - 11 March 1998

Automatic toll booths to be installed
Minister of Public Works Diandino Peña announced that modern toll booths will be installed at the main exits of Santo Domingo. The Ministry contracted the toll booths for RD$142 million with the Consorcio MSB and Ascom Trindel Corporation. The new toll booths will be installed at the same points where they are located today: Km. 25 of the Autopista Duarte (heading north); at km. 20 of the Autopista de Las Americas (heading east) and km. 12 of Haina (heading west). A new booth will also be built at the new San Cristóbal-Santo Domingo highway. The toll booths will have five lanes in each direction. The four central lanes will be for fast moving light vehicles and will operate automatically.

Office employees fired at state university
The Consejo Universitario, the board of the Universidad Autónoma de Santo Domingo, the state university, expelled Fausto Herrera, president of the Asociación de Empleados Universitarios and other directors of that organization which occupied the financial department of the state university for 29 days, impeding the registration of students. The bureaucrats demanded a 20% increase in salary. The occupation has impeded the commencement of classes at the state university. Rector Edylberto Cabral Ramírez said that if employees return to work within the next 24 hours they will be paid their salary on Friday. The Consejo Universitario has been retaining the paychecks of employees on strike.

Pan Am unlikely to return to Santo Domingo
Even if Pan Am is able to lure investors, the airline is unlikely to resume its flights to Santo Domingo. Press reports indicate that Pan Am intends to sell equipment and gate rights in Boston, Chicago's Midway Airport, Nassau, the Bahamas and Santo Domingo.
Pan American World Airways chief executive David Banmiller has confirmed talks with the Rothschild fund, former TWA owner, financier Carl Icahn and three other possible investors. The groups were considering lending money to or buying equity stakes in the discount U.S. airline, which halted scheduled flights February 26. Now under bankruptcy court shelter, Pan Am is only flying charter flights. Founded in 1996, after a US$1.3 million payment for the historic Pan Am name, the discount airline based in Miami had offered service from New York and Miami to Santo Domingo. Banmiller has said that the airline needs to offer regular flights on set routes to be a viable business.

Unemployment drops but still high
The Economic Commission for Latin America (known in the D.R. for its Spanish acronym, CEPAL) said that unemployment rate dropped in the Dominican Republic from 16.5% to 15.9% last year. CEPAL also indicated that the D.R. had the highest growth rate of the Gross Domestic Product in 1997, 8%, but that the country has the second highest unemployment rate in Latin America. It indicates that economic transformations have resulted in a net reduction of jobs. The countries with the highest unemployment rates in Latin America are Trinidad & Tobago, Dominican Republic, Panama, Nicaragua, Argentina, Barbados, Colombia and Venezuela. The organization has forecast that the Dominican economy will grow 6% in 1998.

Who will be the PRSC's major candidate?
Two days before the deadline for choosing candidates for the municipal and congressional elections, the Partido Reformista Social Cristiano has still not announced its candidates. Miguel Sanz Jiminián says he won the primary to choose the candidate for mayor of Santo Domingo. Former Vice President Jacinto Peynado denied he was offered the position. A recent Hamilton & Staff survey he commissioned showed that he is one of the strongest potential candidates that could successfully compete against José Francisco Peña Gómez and Roberto Salcedo, of the PRD and PLD, respectively. Rafael Corporán de los Santos, a former city mayor for the PRSC, said he was not interested in the position. He said the campaign and his work as mayor of Santo Domingo caused him substantial financial losses. President Balaguer has the last word and has not yet spoken.

Poll forecasts high turnout for May elections
Preliminary results of the survey Demos 97 carried out by the Instituto de Estudios de Población y Desarrollo (IEPD) reveal that there is likely to be a large turnout of voters during the congressional and municipal elections of 16 May 1998. The survey showed that 70 of every 100 persons will go to the polls. This contradicts the general perception that there is a general apathy toward the elections. To the question, "Do you plan to vote in the next elections?" 69.2% responded yes in the National District (Santo Domingo), and 83.3% in the rural areas. The study was financed by the Agency for International Development (AID).

Bright outlook for tourism industry
The tourism industry generated US$2,103 million in 1997, according to a preliminary report of the Central Bank. The total is up 18% from 1996, when receipts were US$1,782.4 million. Tourism continues to be the major provider of hard currency to the economy. The Central Bank report states that average hotel occupancy was 76.2% last year, up 4.7 points from 1996. Total number of visitors grew 14.5% compared to 1996. There was a significant increase in arrivals via Puerto Plata and Punta Cana. The report comments that "great variety of services offered by renown hotel chains and local investors, together with marketing strategies implemented by the public and private sectors, has brought about a great dynamism to the tourism sector."
According to the Central Bank, 2,539,781 visitors arrived by air in 1997, up 10.1% compared to 1996. European tourists made up 57.8% of the total arrivals, up from 54.8% in 1996. U.S. visitors market share was down from 34.7% to 32.1%. The United States, nevertheless, is the largest single nation source of visitors with 22.9%, followed by Germany, 18.8%; England, 12.4%, Canada 8.7% and Italy 6.8%. The source markets that grew the most last year were United Kingdom, with a 78% increase, France, with 77.1% and Mexico, up 43.8%. The Central Bank comments favorably on the diverse market mix of visitors to the Dominican Republic.

Dollar still brings many pesos
Street market prices for the dollar continued high. The dollar was selling for RD$14.70. Street vendors were purchasing at RD$14.60. Bank transfers were being made at around RD$14.90. The official rate is RD$14.02.

Free zone thrives on diversification and quality
The Listín Diario reports that the free zone sector, based on the quality of Dominican workmanship and the managerial capacity of its executives, is growing. The industry's survival and growth is dependent on the continued diversification of its industries, a trend that is now apparent in the free zone sector. Thus, Dominican free zones are able to compete internationally, despite the intense competition that obliges these to cut costs, production cycles, and keep quality high. The free zone sector contributed RD$6,512 million in salaries and services last year to the Dominican economy. The free zone sector is known for implementing modern production technologies, continuous personnel training and optimum production processes.
After a slight slack due to the initial competition of Mexican free zones benefited by the North American Free Trade Agreement, Dominican free zones seem to be holding their own. The National Council of Free Zones says the free zone sector has gotten off to a rapid start this year. In the first two months of the year, the NCFZ has approved the installation of 17 new companies. The executive director of the Council, Gabriel Castro González, said RD$157.8 million will be invested to install the new companies, creating 2,098 new jobs and generating hard currency for US$8.9 million.
Furthermore, two new industrial parks that will be installed with an investment of RD$200 million pesos will generate 10,000 additional jobs.
Castro González also highlighted the diversity in the industries now coming to the country. He said that while in the past 50% of the companies to be installed were in the textile sector, now assembly operations to produce cigars, jewelry, luggage, services, metal mechanics and handicrafts are being installed in addition to apparel industries. Furthermore, he said several companies that have been operating in Dominican free zones are expanding their operations, which shows the trust of the investors in the investment, social and political climate of the nation.
He said the free zone sector should grow 15% in 1998, reaching a total of 195,000 jobs. Exports are forecast to be more than US$2,500 million. Textile exports are up 30%.
Likewise, non-free zone Dominican companies are integrating with the free zone operations. This factor, in addition to the increase in the diversity of industries, is expected to be the base of continued growth of the free zone industry. Castro said that the free zones are a model for other regional countries and are the principal export companies.
Some 446 companies operated last year, in 40 established parks, with a definite impact on their communities. At the end of 1997, there were some 182,000 persons employed, and another 270,000 indirect jobs, or 12% of the total economically active population.
Minister of Industry and Commerce, Luis Manuel Bonetti recently said that the free zone industry is the industry which most absorbs labor, and most creates jobs. Central Bank statistics show that the sector contributed US$700 million to the Central Bank for payment of personnel and services, up 28% compared to 1996. Economists indicate that every week some RD$110 million is paid in salaries, or RD$5,280 million a year. Free zone purchases on the local market are more than RD$400 million a year. Free zone exports were up 16.6% compared to 1996. The Dominican Republic is the seventh largest supplier of textiles to the United States, after China, Mexico, Hong Kong, Taiwan, Canada and Korea.

100 priority proposals
The Fernández government will be giving priority to 100 proposals made during the National Dialogue. Several of these will be sent to the National Congress for approval. Listed below, they are:
Popular sectors, unions and community matters:
Relocate hundreds of evicted persons and victims of natural disasters.
Expand the coverage of the Alimentos para Todos program of Inespre that sells low cost food products.
Implement strategies for the construction of housing in impoverished areas.
Carry out a major campaign against drug trafficking.
Economic Policies
Guarantee the sound operation of the private and public financial regime.
Maintain the fiscal and monetary equilibrium.
That the Central Bank reassume its role as promoter of price stability and soundness of the financial system.
Urgency that National Congress pass the Monetary and Financial Code.
Urgency that National Congress pass a reduction in import duties and compensation of this reduction in income to the state by way of the tax reform.
Strengthening of the high levels of the Central Bank.
Increase the supervision of the financial system, including cooperatives.
Avoid that the peso increase in value if this cannot be justified by an increase in production.
Reiterate the need for balanced fiscal policy, whereby if government expenditures are up, these will be financed by increasing taxes.
Approve the Código de Ordenamiento de Mercado, rules that promote free market, intellectual property and copyright, unfair competitive practices, consumer protection.
Promote back linkages between Dominican companies and free zone export companies.
Promote the availability of loans for micro, small and medium-sized businesses.
Promote a competitive industrial development strategy that allows national industry to produce in quality and price, similar to conditions existing on international markets, sustained by intersectorial and international integration.
Social Policies
Modernize the social security system.
Approve legislation to favor single women and domestic workers.
Mechanisms to grant participation of women in the provincial development councils.
Creation of a specialized fund to support women involved in small farming service companies and businesses of women in the rural areas.
Creation of the Secretaria de Asentamientos Humanos y Vivienda, as a way of reorganizing the sector.
Establishing a fair salary for construction workers.
Planning of public sector works so that they are not begun unless the budgetary assignation is there.
Technical and financial support to organizations and neighborhood groups that are carrying out housing solutions or improvements with the use of appropriate technology.
Preparation of a program for construction of schools.
Reduction of illiteracy.
Execution of Sports Program 1997-2003.
Political reforms
Proposal for the reform of the Constitution.
Creation of courts for constitutional guarantees to determine that laws, decrees and rulings are in line with the Constitution.
Infrastructure and Energy
Creation of the Oficina Fiscalizadora de Obras Electricas, Mecanicas e Industriales del Estado y el Sector Privado
Passing of the General Electricity Bill.
Implementation of a long range program for the development of non-conventional and alternate sources of energy in the country.
Promote a bill to modernize farming and reorganize the sector to the new international and national situation.
Program the import of food products so that sales of national production are not affected.
Promote development of organic farming.
Farming insurance.
Prepare farming for the 21st century by providing farming education and research.
Environment and Natural Resources
Constitutional reform to incorporate the concept of sustainable development.
Definition of government policies of the sector.
Preparation of a legal framework for the environmental sector.
Creation of an environment court.
Creation of a Ministry of Natural Resources and Environment.
Revision of Law 676 on the national system of protected area to introduce innovative elements for the handling and promotion of tourism.
Formation of the Instituto Nacional de Recursos Forestales, made up by the Direccion General Forestal and the Comisión Nacional Técnica Forestal.
Progressive expansion of the educational system coverage.
Teach over 300,000 persons older than 15 years to read and write during the next five years.

Government honors Dominican women
The Dominican government honored with the Medal of Merit eight Dominican women for their life contributions to culture and Dominican values. Vice President Jaime David Fernández gave the awards at the National Palace. These went to: Esthervina Matos, 85 years, with four doctorates, and the first woman to become professor of law; Atala Cabral de Poladura, 70 years old, first Dominican woman journalist, and renown museum researcher; Margarita Vallejo de Paredes, 80 years, educator, journalist and researcher; Maria Matilda Luz Peña de Infante, 85, first Dominican woman to serve as a judge; Altagracia del Orbe, 82, politician, fought against Trujillo and mother of the 14 de Junio heroes movement against Trujillo; and Luz Carolina Mainardi, 90 years, anti-Trujillo activist.

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