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Daily News - 03 February 1999

Chávez proposes major oil refining role for DR
At a press conference held in Caracas yesterday, President Leonel Fernández revealed the essence of the "new initiative" proposed by the new Venezuelan President, Hugo Rafael Chávez Frías. Yesterday Fernández hinted to reporters that in a private meeting with the Venezuelan just hours before the latter’s inauguration, Chávez had proposed an unspecified "amplification" in the San José Agreement, the long-standing arrangement under which Mexico and Venezuela provide special financing for purchases of their petroleum by Caribbean and Central American nations. According to Fernández, Chávez wants to make the DR the central refining point for all Venezuelan oil intended for Caribbean and Central American markets. Venezuelan officials propose increasing the Dominican quota under the San José Agreement (from 15,000 to 25,000 barrels) and helping expand and modernize the Dominican Petroleum Refinery (RDP), the state-owned refinery managed by Texaco and Shell to augment its refining, storage and handling capacities and capabilities. Such investment or assistance presumably would be done with the participation of Venezuela’s state-owned petroleum firm, Petroleos de Venezuela (PETROVEN). Further details of what the Venezuelans have in mind will be revealed when a Dominican delegation travels to Caracas within two weeks to discuss the proposal. The Dominican side in those talks will likely be led by RDP President Francisco Javier García; the Venezuelan side will be represented by the new Energy and Mines Minister, Alí Rodríguez Arenque. The Venezuelan proposal, if realized, could be a huge economic boon to the DR, making it in essence the oil refining and transshipment center of the Caribbean Basin.
During his inauguration speech yesterday, President Chávez referred more than once to his desire to "integrate" Venezuela with the Caribbean along a Caracas-Santo Domingo axis. He also proposed that Latin America and the Caribbean work toward a political, economic and monetary union, ŕ la the European Union (EU), with even a single currency unit (an idea being championed by Argentine President Carlos Menem in the wake of the Brazilian currency crisis). In his remarks to the press last night, President Fernández voiced his support for the concept of a single regional currency.

Region needs to adopt united front on textile parity
At yesterday’s press conference in Caracas, President Fernández told reporters that he has urged his fellow heads of state from Caribbean and Central American nations to make common cause and present a united front to demand "textile parity" from the U.S. He suggested that the Summit of Caribbean Heads of State, to be held in Santo Domingo April 16-17, 1999, was the logical place to agree on the elements of a common position. "Textile parity" refers to the idea espoused by many U.S. officials and desired by most Caribbean Basin nations to give Caribbean and Central American nations the same market access for their textile exports that Mexico won for its textiles under the North American Free Trade Agreement (NAFTA). Ever since the implementation of NAFTA Mexican textiles have been gaining market share in the U.S., often at the expense of textile exports from neighboring nations. Textile parity would probably benefit the DR more than any other nation, since it is a major textile exporter to the U.S. thanks to its free zone ("zona franca") operations. The textile parity proposal has never been approved by the U.S. Congress, despite White House support.

Costa Rica will retire its WTO complaint vs. DR
At yesterday’s press conference in Caracas, President Fernández announced that Costa Rica will retire its trade complaint against the Dominican Republic in the World Trade Organization (WTO) regarding the so-called "technical rectification" restrictions on milk imports. Fernández met with Costa Rican President Miguel Angel Rodríguez Monday night; he says that his Costa Rican counterpart notified him of the decision at that time. The decision may have an impact beyond bilateral trade relations between the two countries on two counts. First, trade law experts have long expressed doubts about the legality of the Technical Rectification; if Costa Rica had insisted on taking the complaint as far as a WTO arbitration board, the Dominican device might have been declared contrary to world trade rules to which the DR ascribes, thereby rendering it null and void. Second, the Technical Rectification is the foundation for the DR’s portion of the so-called "negative list" of products not receiving full trade liberalization benefits under the free trade treaties with Central American and Caribbean Common Market (CARICOM) nations. Currently both Honduras and Nicaragua are demanding changes in the negative list before they will sign onto a crucial implementing protocol to the DR-Central American treaty. The Costa Rican decision reduces the pressure on the DR to make major concessions to Honduras and Nicaragua.
The Technical Rectification, which only came into effect last month, is a "correction" to the DR’s treaty commitments under the 1994 Uruguay Round trade agreements. The Uruguay Round accords, overseen by the Geneva-based WTO, included measures liberalizing imports of agricultural goods. The DR signed onto the accords, but when they were brought home for ratification, domestic agricultural interests protested that the commitments would ruin them. The then-Balaguer Administration launched negotiations with major agricultural trading partners for changes in its Round agricultural trade commitments under the guise of a so-called "technical rectification." The formula finally agreed sets import quotas on eight key items, such as milk products, rice and chicken, for which quantities the tariff levels agreed in the Round will be applied. Once the quota limit is reached, a variable (higher) tariff takes effect, depending on quantities imported.

Storm over bad milk continues
Nearly a week after over 1,000 public school students in the Cibao region became violently ill from drinking bad milk in the national school breakfast program, mysteries remain about the milk’s contaminants and supplier while irate parents and civic groups are clamoring for changes in the way the Education Ministry handles the program. Yesterday the national testing laboratories at the Dominican Institute for Industrial Technology (INDOTEC) revealed the results of its tests of the milk: it found at least 22 types of bacterial contaminants. INDOTEC will not deliver its final report to the Public Health and Education Ministries until today, after it has conducted a few more tests. The Education Ministry has been criticized for the incident, and a number of parents, civil and consumer groups have called on the Ministry to identify and punish the company that supplied the bad product and to begin having the school breakfast program supplied via public tenders that emphasize quality control guarantees (presently the contracts are awarded without taking bids). The Ministry has refused to identify the milk supplier. Yesterday the maker of Nutrilac, reported by many newspapers as the alleged supplier, took out ads in major dailies to deny the charge, stressing that it has never contracted with the Education Ministry. In recent days, parents and parish priests have come forward to claim that they have been complaining about the quality of the program’s food for months, but in the past were threatened by local Education officials to lose the breakfast program benefits if they did not stop criticizing the program.

Senate finally moves on Monetary/Financial Code
After umpteen delays and postponements, the Senate yesterday finally began serious wheeling-and-dealing in the open on the important and controversial draft Monetary and Financial Code. In a five-hour session yesterday afternoon, the upper chamber of Congress approved 130 out of the 345 articles in the draft Code. The Code is one of the major economic reforms sought by the Fernández Administration. It would change the rules governing the Central Bank, commercial banks, savings and loans, interest rates, financial transactions, issuance of public debt instruments (such as bonds), etc. Many of these rules are already in practice. Among the amendments made yesterday was one limiting the issuance of such instruments to certain specified instances (national emergencies, situations related to natural disasters, etc.) and only to certain parties. Among the issues purposefully avoided in yesterday’s debate were the rules governing interest rates (article 84) and the role of the Central Bank Governor in the International Monetary Fund (IMF), World Bank and Inter-American Development Bank (IDB) (article 101). Disagreements over those two articles resulted in a loss of quorum in Monday’s debate on the Code, creating another delay in work on the legislation.

Aristy Castro must resign Senate post
Despite his promises last week to do so, Amable Aristy Castro (Reform Party - PRSC) has yet to resign as Senator for Altagracia Province, raising the specter of a new public row about the leadership of the Dominican Municipal League (LMD). The Senate Presidency has reminded Aristy Castro that Article 18 of the Dominican Constitution specifies that Members of Congress must resign their seats when they take another public office. Yesterday Interior and Police Minister Ramón Andrés Blanco Fernández agreed that Aristy Castro must resign his Senate seat if he wishes to continue claiming the Secretary-General’s (SG) post at the LMD. Several lawyers as well as Dominican Revolutionary Party (PRD) leaders have publicly opined that as long Aristy Castro retains both positions, his decisions as LMD SG can be considered as without legal basis and if he does not resign soon, his election and rule can be challenged in court as unconstitutional.
On Tuesday, January 26th, two parallel "assemblies" of municipality representatives were held which elected two different SGs. PRD and allied delegates met in Santo Domingo’s Embajador Hotel and "re-elected" Julio Maríńez Rosario after "nullifying" the designation of Minister Blanco Fernández as President Ex-Officio (and convenor) of the General Municipal Assembly, the body normally charged with electing the organization’s SG. PRSC and Dominican Liberation Party (PLD) sympathizers meanwhile met at the Macorix Hotel in San Pedro de Macorís and "elected" Aristy Castro after "amending" LMD rules to allow any prominent national politician to stand for the SG position, whether a college graduate or not (Aristy Castro does not have a university degree).
At stake in this political battle is the League’s control of 4% of the national budget, currently RD$6 billion (about US$400 million at current exchange rates). PRD wants to retain control of the League, arguing that it is rightfully theirs after they won most of the nation’s municipal elections in 1998. The PRSC, which since the last elections has controlled no major national political institution, sees this post as insurance that it will remain a major political force.
Aristy Castro is not the first member of Congress to be affected by Article 18. For example, current Vice President Jaime David Fernández Mirabal had to resign as Senator for Salcedo in 1996 in order to become second-in-command of the Fernández Administration. Dr. Altagracia Guzmán Marcelino had to resign as a federal Deputy in 1997 to become Public Health Minister. José Ramón Fadul also resigned his seat in 1997 to head CORDE, the government holding company for a number of state-owned enterprises.

Expand JCE by two?
On Monday Senator Milton Ray Guevara (PRD-Samaná) submitted a bill to expand the number of seats on the Central Election Board (JCE) by two. The Senate President, Ramón Alburquerque (PRD-Monte Plata), immediately created a special committee to consider the proposal which is chaired by Senator Milagros Ortíz Bosch (PRD-Distrito Nacional). [It should be noted that Ms. Ortíz Bosch would be one of the politicians possibly directly affected by such a reform, since she is seeking the PRD nomination for the presidential elections of the year 2000, and the JCE will manage those elections.] Yesterday current JCE President Manuel Ramón Morel Cerda announced that the JCE would not fight any such increase in its numbers as long as it is mandated by law. Five of the PRD members seeking the party presidential nomination also announced their support for the idea (the sixth "pre-candidate," Senator Abinader, is traveling abroad). In contrast, Dominican Liberation Party (PLD) Secretary-General Lidio Cadet rejected the idea altogether. Speaking at a press conference held yesterday to announce new members of his party’s Central Committee, Cadet insisted that the PLD would accept nothing short of either a "complete restructuring" of the JCE or its expansion by four (not two) seats. In either case, he said, members should be appointed after the three major parties agree by consensus on the nominees, as they did for the Board that ran the 1996 and 1998 elections.
The Senate proposal and the quick endorsement by JCE President Morel Cerda has raised an eyebrow or two in Santo Domingo. Just two weeks ago the news daily Listin Diario reported a rumored deal brokered between Morel Cerda and PRSC President Donald Reid Cabral to break the long political crisis about the current JCE. According to the newspaper, the two men had hammered out a pact that would expand the number of Board members by two and would see two former JCE members, Luis Mora Guzmán and Alejandro Asmar Sánchez, appointed to fill the new seats. The report was hotly denied by both Morel Cerda and Reid Cabral at the time.
The JCE crisis started last August, when the PRD-controlled Senate appointed the current five JCE members without first consulting the PRSC or PLD. The PRSC swiftly challenged the appointments in court, claiming that several members, including the new Morel Cerda, were PRD activists and therefore could not be impartial as the law calls for.

ADP calls national strike
The Dominican Teachers’ Association (ADP) has called a 48-hour national teachers’ strike for next Monday and Tuesday, February 8th and 9th. The ADP says that the strike is necessary to force the Education Ministry to pay the incentives it has long promised teachers, stop deducting certain "unjustified discounts" from teachers’ salaries and to "comply with the law." For its part, the Ministry has called on ADP to dialogue rather than strike, particularly since a strike would adversely affect the testing cycle currently underway in most elementary schools.

Sea swells spark advisories for North Coast
Unusually high sea swells on the DR’s Atlantic Coast flooded slum area streets in western Puerto Plata province yesterday and occasioned a precautionary regional advisory from the National Weather Office. High seas flooded the barrios of Aguas Negras, La Viara, Los Coquitos, Playa Oeste and Via Férrea and destroyed three homes, severely damaged six others and caused some damage to about 20 others in the barrios. As a precaution, Civil Defense has declared a state of emergency in the affected areas and asked families nearby to evacuate their homes. Also as a precaution, cargo ships were removed from Puerto Plata’s harbor and beach-goers on several popular North Coast beaches are being cautioned about swimming in the rough seas. The National Weather Office says winds on the North Coast have been between 15 and 30 knots, raising wave levels from a normal 4-7 feet to 10-12 feet. Winds in Samaná Bay have reached 23 knots, creating waves of up to 9 feet. The high waves and flooding sparked local rumors of a tidal wave, which Civil Defense and the National Weather Office have dismissed as completely baseless.

JLG to finance one of the new public clinics
Public Health Minister Dr. Altagracia Guzmán Marcelino announced yesterday that Dominican recording star Juan Luis Guerra has agreed to finance the construction of one of the Ministry’s new neighborhood family health clinics. In an interview with the news daily El Siglo to discuss Ministry plans to create a series of neighborhood-based "Family Health Teams" throughout Santo Domingo, Dr. Guzmán revealed that the popular Dominican artist has agreed to finance the construction of a model clinic to be located in El Café de Herrera. [In his new album, JLG has a song decrying the state of public health care in the DR.] Each of the "Teams" will try to provide primary health care to 500-700 families through neighborhood clinics equipped with small laboratories and manned by a doctor, a nurse, a social worker and a health educator. The clinics will offer vaccinations, pediatric attention, dental care and general check-ups. The concept is to take primary care to families turned off by crowded and poorly-equipped clinics at public hospitals, and in the process create a sort of "early warning system" to detect emerging health problems in the barrios. Clinics are already planned for the barrios of Domingo Savio, El Capotillo, Gualey, La Zurza, Maria Auxiliadora, Simón Bolívar and 24 de Abril.

DR whips Venezuela in first Series match
The Dominican Republic destroyed Venezuela 10-2 in the opening match of the Caribbean Baseball Series yesterday afternoon. Venezuela scored its two runs in the first inning, after which the game was controlled by the Dominicans. The most valuable offensive player of the game was undoubtedly Nefi Pérez, whose home run and single accounted for four of the ten Dominican runs. The match was played in San Juan’s recently remodeled Hiram Bithorn Stadium before over 6,000 cheering PR-resident Dominican fans attending the game. The Licey Tigers, winners of the Final Series of DR’s Winter Professional Baseball Tournament, are representing the DR in the Caribbean Series. Licey has gone to the Caribbean Series eleven times and has returned victorious seven. Today they face Mexico at 4:00 pm, while Venezuela faces the tough Puerto Rican team at 8:00 pm. Pitching for the DR today will be Darío Pérez, selected in part for his experience in playing the Mexican leagues. The rest of the Series schedule is as follows:
  • Thursday, Feb. 4th: Venezuela v. Mexico, 4:00 pm; PR v. DR, 8:00 pm
  • Friday, Feb. 5th: Venezuela v. DR, 4:00 pm; PR v. Mexico, 8:00 pm
  • Saturday, Feb. 6th: Mexico v. DR, 2:00 pm; Venezuela v. PR, 6:00 pm
  • Sunday, Feb. 7th: Mexico v. Venezuela, 2:00 pm; DR v. PR, 6:00 pm

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