President Leonel Fernandez's Press Office reports that former US President Clinton has agreed to join the DR-CAFTA lobby that seeks support to convince US legislators to pass the bill. President Fernandez met with former President Bill Clinton and New York Senator Hillary Clinton at their home in Chappaqua, New York yesterday. He visited Clinton together with the Dominican ambassador in Washington, Flavio Dario Espinal, architect Eduardo Selman who was appointed liaison between the government and the Dominican community abroad, and businessman Rolando Gonzalez, president of EGE-Haina.
As part of his US FTA lobby tour, President Fernandez was scheduled to meet with the New York Times and Wall Street Journal editorial writers in New York City, as reported in El Caribe. He is also scheduled to speak at a luncheon organized in New York by the US Chamber of Commerce, the American Chamber of Commerce and the Dominican American Business Network and Dominican American National Roundtable at City College. Fernandez traveled to New York on Monday seeking support from leading figures in New York, and is scheduled to travel to Washington today. President Fernandez is scheduled to return to Santo Domingo on 13 May.
Inflation in April was barely 0.31% according to the Central Bank. Accumulated inflation for the first four months of the year is 1.07%, well below the 25.24% level of inflation reported for the same period last year. Twelve-month inflation is at 3.9%, in significant contrast with the 62.98% inflation for the same period in 2004. For more details, see http://www.bancentral.gov.do
Franco Uccelli, of Bear Stearns reports that the Dominican government announced last night the results of its bond exchange offer "showing a surprisingly high rate of investor participation". The final outcome, as reported by Uccelli is: "The aggregate principal of existing bonds tendered totaled US$1.03 billion, equivalent to approximately 93.6% of the total bonds outstanding. Of the US$500 million in 2006 bonds outstanding, some US$456 million were tendered, representing approximately 91.2% of the total. Meanwhile, of the US$600 million in 2013 bonds outstanding, US$574 million, equivalent to 95.7% of the total, were tendered." Uccelli explains that the exchange offer expired on Wednesday, 4 May, and settlement is scheduled for Wednesday, 11 May 2005.
This means that on Wednesday, the DR is due to deliver US$456 million in new 9.50% amortizing bonds due in 2011 and US$574 million in new 9.04% amortizing bonds due 2018 to participating investors.
He concludes: "Completion of the exchange should put an end to a long and tedious process during which the Dominican government successfully justified and executed a market-friendly bond exchange that should help the country emerge from its current liquidity jam and satisfy the comparability of treatment requirement imposed upon the Dominican Republic by the Paris Club in exchange for bilateral debt relief. All in all, good results and improved prospects for the Dominican Republic."
Olga Diaz Mora, advisor to the Central Bank on National Accounts, told Diario Libre that free zone exports during the first three months of the year were US$1.03 billion, not the US$668.9 million reported by the Center for Exports and Investments (CEI-RD). She said the source for the data is the US Department of Commerce. Diario Libre reports that exports for the same period in 2004 were US$1.02 billion. Free zone sector spokesman Arturo Peguero has disputed the Central Bank's claims, reporting that the sector grew 3.5% during the first quarter.
Tourism Minister Felix Jimenez complained that there are sectors that "are against everything". He was referring to the opposition by the National Hotel & Restaurant Association to the government imposing a US$5 surcharge on all airfares to the DR sold abroad as of 1 August. Jimenez alleges that the tax would bring in US$20 million a year that would be used for necessary infrastructure works, until the government can undertake these. He argues that at present, the government has to spend 32% of all its revenues to repay foreign debt. Jimenez commented that Asonahores also opposes the derogating of the tourism incentives law, which he said represented RD$1.3 billion in revenues for the sector.
Jimenez again commented on what he called is a strange coincidence between the opposition of environmentalists to the hotel development of the Bahia de las Aguilas biosphere reserve area and the interests of drug smugglers who prefer the southwest to remain sparsely populated.
Luis Carvajal, of the Coalition for the Defense of Protected Areas, told Hoy newspaper that attempting to undermine the defenders of the protected areas is the only way the government officer has found to defend the flagrant violation to Law 64-00 and 2-02 of Protected Areas.
On Friday, as reported in Hoy newspaper, Jimenez accused the Coalition of having suspicious interests, implying connections to the drug trade, for opposing possible investment in the southwestern beach area of Bahia de las Aguilas. He was responding to a letter that the Coalition sent to the Confederation of Andalucian Businessmen, where they alert the Spaniards of the illegality of building in lots that fall under the protection of the law.
The Coalition for the Defense of Protected Areas considered "extremely unfortunate" the statement made by Felix Jiemenez who accused sectors of having dubious interests linked to drug smuggling, for opposing tourism investment in the Bahia de las Aguilas biosphere reserve area.
The president of the Academy of Sciences, Nelson Moreno Ceballos said that the government officer should retract his statements or present proof that environmental groups are linked to drug smuggling. He said that if Jimenez chooses to maintain his accusation, he should present the evidence.
"As Felix Jimenez should know, the Coalition for the Defense of Protected Areas includes dozens of organizations, such as the Consorcio Ambiental Dominicano, the National Hotel & Restaurant Association and the state university, UASD," he said. In his opinion, the motivation behind linking drug trafficking to efforts to defend the nation's natural and cultural heritage shows a lack of respect and is completely inappropriate, as reported in Hoy newspaper. He also commented on the opinion that the Coalition seeks to halt progress, stating that the DR only protects 16% of its national territory, including just 300 kilometers of coastline, out of a total 1,500 kilometers. "It is evident that our only intention is to guarantee respect for the few protected areas that still remain, which are precisely the backbone of progress in our nation," stated Moreno Ceballos. He rejected that the tourism minister disqualify local environmental professionals to justify the need to hire foreign technicians to design the Development Plan for the Southwest.
The National Hotel & Restaurant Association has expressed its opposition to the proposed US$5 tax on airfares sold abroad. The spokesman for the Hotel Association of the East, Ernesto Veloz, and the spokesman for the Hotel Association of Puerto Plata Jesus Almanzar, criticized the announcement made by Tourism Minister Felix Jimenez. The measure is set to go into effect in August. Almanzar, of Puerto Plata, says that airfares are already burdened by around 40% of fares paid in taxes and surcharges. He says this affects the country's competitiveness.
Almanzar said that there is no guarantee that the funds generated by the tax will not be allocated to the general budget of the nation and used for other purposes. This has occurred in the past with other taxes on the sector that supposedly were to be reinvested in tourism infrastructure. Felix Jimenez has proposed the creation of the new tax to carry out requested infrastructure in Puerto Plata.
The Puerto Plata hotel sector urges that the government invest in Puerto Plata's infrastructure. Almanzar says that the private sector has done its part by remodeling the hotels, and attracting investors to build complementary attractions. They say that Puerto Plata generates 30% of the tourism sector's hard currency. "Then, is it not possible that with that kind of money that we generate that Puerto Plata be allocated US$70 million for infrastructure without having to create a new tax?" he asked, as reported in Hoy newspaper today.
"Ernesto Veloz of the eastern tourism region, as reported in the Listin Diario, said that the tourism sector cannot be seen as a golden cup. "We are a cracked cup that at any moment, if they continuing creating more taxes and abusing it, will break," he said. He highlighted that the government has invested minimally in the eastern region.
The rejection of the new taxes is also backed by the hotel associations of La Romana-Bayahibe, Samana and Juan Dolio.
"A Time to Choose, Caribbean Development in the 21st Century," dated 26 April 2005 was released during the Caribbean Forum Development taking place in Barbados. Prepared by the Caribbean Country Management Unit of the World Bank, the report highlights that the Caribbean is at a development crossroad. It urges that to adapt to the demands of the new world the region will require a much greater focus on sustaining and improving growth and competitiveness calling for political leadership and strong national support.
In its Executive Summary, the report highlights that growth in tourism has slowed over the last decade, attributing this to the maturing of the region's sun, sea and sand product.
"However, growing demand in product areas such as adventure and cultural tourism provides an opportunity for the region to revitalize the tourism sector and move into areas that could deepen linkages with the rest of the economy. It urges that Caribbean governments improve the investment climate by managing and marketing the sector more effectively, improving destination and product quality, and addressing skill deficiencies. The report stresses: "Careful management of the environment is, of course, paramount to achieving and maintaining competitiveness in both new and old product areas. Governments must carefully steward the region's resources to mitigate environmental damage and risk while not compromising environmental standards to attract investment."
To read the full report, go to http://web.worldbank.org/WBSITE/...
Traffic expert Hamlet Hermann says the government has a six-month solution on hand to resolve the north-south traffic problems of Santo Domingo. He proposes that the government extend Ortega y Gasset Avenue until it reaches Villa Mella and then set it for north-south traffic, while converting Maximo Gomez Avenue to exclusively south-north traffic. He says this will considerably reduce traffic jams in the city. "We understand there is no need for pharaonic works that will only indebt the country during the entire 21st century. The city has lots to give before we start inventing," he told El Caribe newspaper. Hermann, a founder of the Metropolitan Transport Authority, is a fierce critic of the Santo Domingo underground metro promoted by former Public Works Minister Diandino Pena, currently the 'Metro Minister' in the Fernandez cabinet. His proposal would require adding one kilometer north of the present avenue so as to link into the Villa Mella thoroughfare and another south from 27 de Febrero to link into George Washington. Hermann says that the cost of this expansion would be just a "tip" compared to the mega cost of building the metro. He said that with half of the cost of the studies of the metro (an estimated RD$755 million), the avenues could be extended. The government would have to expropriate around 10 dwellings or buildings to complete the highway. He said the works could be completed in six months time.
Hermann bases his recommendation on findings of a study carried out during the previous Fernandez administration. Other proposals to make traffic more fluid are to convert the Isabel Aguilar and the Luperon into one-way streets. To extend the Albert Thomas to Santo Domingo Norte to Maria de Toledo, Tiradentes and Dr. Delgado to reach the Malecon. In the case of Dr. Defillo and Privada streets, he proposes that these be made one way. In this case, a tunnel would be built under the Mirador del Sur park, as in the case of the Nunez de Caceres tunnel.
Hermann says that the implementation of one-way streets would enable the city to return to the use of exclusive lanes for buses.
He says he has presented the project to the mayor of Santo Domingo and the public works minister.
The Public Health Minister Sabino Baez announced the construction of a Health City at Avenida Charles de Gaulle, in the eastern Santo Domingo province. As reported in an editorial in Hoy newspaper today, the minister announced the construction of the hospital complex without a tender being called. Since the minister has announced construction would begin in 30 days, the editorial writer speculates the builders have already been chosen. Furthermore, the editorial writer speculates that the hospital center will be built by borrowing the US$90 million budgeted cost from foreign commercial banks, further indebting the country, "given that the government apparently considers that what we owe is not enough". The editorial writer also comments that there has not been information on who the owners of the 100,000 lot where the center would be built are, nor what has been paid to the owners. Public Health Minister Sabino Baez has been in the press for his activism in securing US$25 million government injection to complete construction of the Homs private hospital going up in Santiago. Press reports have indicated that the minister is a shareholder in the hospital. The Homs hospital aspires to become the first Dominican hospital to serve US Medicare affiliates.
The number is important: 54% of employees do not have an eighth grade education. With just 46.5% of its work force at less than the eighth grade level, the Dominican Republic is a country with one of the lowest educational achievements in Latin America.
In 2004, the nation had 1.5 million workers that had not reached the eighth grade, according to Central Bank statistics. To this, another 8% with no schooling whatsoever must be added. The total of 54.4% of the workforce is amazing. The reality has negative implications with regards to productivity at a time when the Dominican industries will be entering the opening phase of the free trade agreement.
Concerning the Industrial Free Zones, the implications were measured in the study "Caribbean Rim: Costa Rica, Dominican Republic and Jamaica." The study was carried out by the Program of Cooperation for the Local Economic Development and Employment (LEED) of the OCDEE nations. The result of the study was that it pointed out that the productivity of local workers in this sector was between 60% and 80% of that registered by workers in the home countries of the foreign investors, and the cause was the low education level. President Fernandez pointed this out last week when he said, quite bluntly: "Only education will save this country."
The good news is that things are getting better. Between 1996 and 2002, the figures hovered around 57% of the employed population. University graduates increased from 12/% in 1996 to 18% in 2004.
The trend among women is also positive in that only 37.1% of the women have just a primary education, compared to 51% of the men. However, women with university degrees have a higher unemployment rate than men 19.6%, versus just 10.6%
A Santo Domingo court ordered the suspension of the city hall's approval by resolution 62-2005 allowing construction of the 13-level Laurel III tower to Constructora Molina. The Helios de Bella Vista Oeste neighborhood group had debated the construction of the skyscraper. Constructora Molina is known for submitting plans for one height, and eventually building several more floors. This time, the neighbors argued that the builders had taken 400 meters of neighborhood green area without authorization, with the intention of including it in the projected apartment complex. The construction is stopped until an appointed chamber of disputes reviews the case. Harry Messina, spokesman for the neighborhood group, was thrilled. "This is a victory for the community and shows that we were right. This proves that you can't act against the law, even if you are municipal legislators," he said. Julian Roa, president of the municipal legal commission, said, "This is an example of how things can be done correctly in this country." The city hall, presided by Gabriel Castro, had authorized the construction despite the urban planning department of the Santo Domingo Municipality having given its opinion against the construction.
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