President Leonel Fernandez is scheduled to speak at the opening of the 30th annual Caribbean Studies Association Conference, which will be attended by an estimated 350 delegates. Hundreds of Caribbean-oriented academics have registered for the event, as reported by Caribbean journalist John Collins. The theme of the conference is "Caribbean Cooperation in the Era of the Information Society" and how the region adapts to new technologies.
Speaking at the opening ceremony, in addition to President Fernandez and CSA president Emilio Pantojas Garcia (of the University of Puerto Rico - Rio Piedras), are Association of Caribbean States (ACS) Secretary General Ruben Silie, Chancellor of the UPR Rio Piedras Campus Gladys Escalona de Mota and Pablo Marinez, the Dominican Republic's ambassador to Mexico.
Highlights of the conference are on Wednesday evening when the works of "Great Thinkers of the Caribbean" will be discussed. Among those to be honored are the late President Juan Bosch of the DR; Eric Williams, the first prime minister of Trinidad & Tobago and the father of that country's independence; and Gordon K. Lewis, the late renowned UPR professor.
On Thursday the CSA will be honored by an address by Jose Miguel Insulza, the new Secretary General of the Organization of American States (OAS). Insulza, a minister in the Chilean government, conducted a tough campaign for the office against his main rival, the Mexican foreign minister. Journalist John Collins comments that the strong support from the English-speaking Caribbean and the Dominican Republic was a determining factor for Insulza's victory. The DR chose to back Insulza once the Central American candidate had retired from the race.
The event opens at the V Centenario Inter Continental Hotel.
The Integrative Fiduciary Assessment of the Dominican Republic carried out by the World Bank and the Inter-American Development Bank establishes that the Dominican political system is based on extensive presidential prerogatives with few checks from other sectors in government, to the extent that there is virtually no limit on the President's power to grant direct public contracts, without tenders, as reported in Hoy newspaper on Friday. "This authority is aggravated by limited controls, and can be used to repay favors to political allies and those making financial contributions," said the World Bank and the IDB.
Furthermore, the assessment indicated that many government posts are filled for personal reasons instead of being based on competitive recruitments and technical skills. The government does not have a professional civil service that has brought as consequence inefficient administrative practices, limited actions to fulfill the rules, generalized acceptance of the lack of fulfillment and a decline in public trust in the government. It comments that there is a legacy of authoritarianism in government that affects all aspects of government, creating vicious circles and making it difficult for the better practices to prevail and serve as catalysts for improvements in the system. The report indicates that there is little public access to quality information and low levels of responsibility in government, as well as proliferation of duplicated functions of departments that only rarely coordinate their efforts. It also points out cases of collapse of Baninter, which reflected the weakness of the regulatory controls, and the buyback of two power distributors.
The report was distributed at the Presidential Palace on Wednesday. As reported in the Listin Diario, the IDB's future funding program will depend on the authorities acting on the recommendations made in the report to make public administration more transparent, and to confront corruption. IDB representative Moises Pineda warned that "we cannot continue to work in the DR from now on if the principles that have been outlined in this document are not fully put into practice."
Meanwhile, the World Bank's Christina Malberg said that with the setting up of the Ethics and Corruption Combating Commission, the government has shown that the topics of governance and institutional strengthening are important and that the political and economic costs of not taking rapid action are incalculable.
United States Ambassador Hans Hertell, speaking before the American Chamber of Commerce in Santo Domingo, called for a rapid approval of the DR-CAFTA pact and the removal of the exchange commission on imported goods. The exchange commission is a 13% charge the government levies on the use of hard currencies in purchases of raw materials and other goods in the foreign marketplace. Hertell called the tax "inconsistent with the obligations the Dominican Republic has with the World Trade Organization." The ambassador also called for the elimination of the tax even before a tax reform that would be designed to provide equal funds to the government's treasury. According to Hertell, "The logical decision is that the desire of the Association of Industries, that the tax be abolished, should be approved at once by the Monetary Board."
The following day, Presidential Minister for Technical Affairs, Temistocles Montas, told reporters from the Listin Diario that it was impossible for the government to get rid of the tax, especially without tax reforms that would allow the government to recover by other means the billions of pesos in revenues that the exchange commission generates.
As reported in Hoy newspaper on Friday, Montas said the government could not reveal how the tax burden will be redistributed, as he recognizes the surcharge eventually needs to go. First is ITBIS with RD$40 billion, income tax with RD$25 billion, exchange surcharge with RD$21 billion, customs tax with RD$15,000 billion, petroleum tax with RD$14 billion, and selective luxury tax with RD$9 billion.
During his talk, the US ambassador expressed his optimism that DR-CAFTA would be passed by the US Congress by July. He highlighted the benefits of permanent access to the US market, requirement of tenders for purchases of goods and services, and the strengthening of the legal system.
United States ambassador Hans Hertell continued his push for a quick approval of the DR-CAFTA by the Dominican Congress as he told reporters that one of the reasons that there is gathering support for the treaty in the United States Congress is that there are many sectors in the US that see the treaty as a buffer against the onslaught of Chinese exports. Hertell told El Caribe reporters that one of the reasons that the textile industry added its weight to the legislation was because it understood that the FTA represents a strategy that will allow it to compete with China. The ambassador pointed out the great advantage local textile manufacturers have in being geographically so close to the United States and using textiles made in the US. Hertell called it "joining forces in order to compete with China."
Late last Wednesday the DR-CAFTA agreement received a large boost when the chairman of the House Agriculture Committee, Bob Goodlatte, declared that he was in favor of the deal. Goodlatte said that the DR-CAFTA would be good for US farmers, pointing out that the US exports US $1.7 billion to the FTA countries and imports US$2.4 billion from them. Robert Portman, the USTR, and Mike Johanns, the Secretary of Agriculture were present at Goodlatte's announcement. In another chamber of the Congress, Republican representative Roy Blunt together with John Engler, the president of the National Manufacturers Association, announced that the failure to pass the DR-CAFTA agreement would be a blow that would stun US manufacturers, and recovery would be very difficult. Engler said that he had 15,625 good reasons to pass the bill: This is the number of US manufacturers that that export to the six countries covered by the DR-CAFTA agreement.
Finance Minister Vicente Bengoa told reporters that the government was negotiating more flexible limits on some of the fiscal goals established by the IMF Letter of Intent. According to Bengoa, the IMF was mistaken in some of its estimates.
He cited inflation as one area in which the government has surpassed the IMF estimate, which was for inflation to hit 14%-15% this year. Current estimates place inflation closer to 10% for the year. With regard to the GDP, the IMF estimated an increase of just 2%, and, according to Bengoa, current indicators would seem to predict a GDP increase closer to 4%. Finally, the Finance Minister said that the most eloquent indication of recovery and the need to loosen some of the restraints on fiscal policy is the recovery of hard currency reserves. From a negative US$19 million left by the former administration, Bengoa cited a current gross reserve of US$1.4 billion.
The Economist features a story on the DR's economic recovery, highlighting that the country is half way back to recovery. The magazine comments that Leonel Fernandez took office after four years of profligacy under his predecessor, Hipolito Mejia, including a dubious bank bail-out, that had doubled the public debt and wrecked what was one of the Caribbean's success stories of the 1990s. It credits the Fernandez government with restoring confidence in the currency by what it describes as an "austerity program involving cuts in public-sector jobs, tax rises and tighter monetary policy." It mentions that this was enough to secure a US$665 m loan from the IMF in February, and that this month the government completed the restructuring of two sovereign bonds with a face value of US$1.1 million. The Economist ponders that as a result of these measures, capital flight has abated and inflation has fallen. In the first quarter of this year, the economy grew by 4% compared with the same period last year.
The magazine cites that the next tasks for Fernandez to remain popular are to tackle corruption and poverty. It mentions that stop-start investigations into past scandals have tested public patience, and also points out the reality that the President needs the support of Mejia's party in Congress, and is treading cautiously.
Franco Uccelli of Bear Stearns concludes that the first quarter numbers confirm that the consolidation of the economic recovery continues. "All in all, DR's external performance confirms that the country's recovery continues and that external liquidity conditions are improving," he writes.
Uccelli explains that while much of the focus has been on monetary and fiscal out-performance and better-than-expected growth levels, the country's external accounts are also recording impressive results. He mentions that tourism revenues were up by almost 26% during the first quarter, total exports grew by 5% boosted by strong growth in non-free zone exports, and imports were up by 22%, with non-free zone imports, a proxy for private consumption, expanding by more than 33%. Although remittances were virtually unchanged during the quarter, their contribution of some US$550 million to the national economy still ranks them as one of the country's foremost generators of foreign exchange.
Uccelli explains that despite a larger merchandise trade deficit (the result of growth in imports outpacing export expansion), a higher services surplus and healthy current transfer levels allowed Dominican Republic to record a current account surplus of 6.2% of GDP.
He points out that there has been a notable improvement in the country's capital account deficit, which declined by 74%, supported by a 46% increase in FDI inflows and lower levels of new external indebtedness, combined with a dramatic reduction in capital flight (as measured by the errors & omissions balance, which dropped from -US$310 million in 1Q04 to -US$17 million in 1Q05) and the aforementioned robust current account surplus to underpin a whopping 62% increase in the country's foreign reserve position. Net international reserves have continued to accumulate since the end of the first quarter and now total more than US$1.1 billion (Central Bank definition), an 87% improvement on end-2004 levels.
The United States will be providing technical assistance to the Tax Department (DGII) in an effort to stymie tax evasion in the Dominican Republic. Juan Hernandez, the head of the DGII hailed the agreement with the Office of Technical Assistance of the US Treasury Department as the end of the "era of the sacred cows."
Hernandez was obviously referring to the criticisms made by economist F. Jose Luis Aleman, S.J., that the tax collectors rarely bother to more than "tickle" the really important economic powers of the DR. The new efforts by the DGII will consist of coordinating audits, as well as analysis and training of the tax service. The program will last for seven months.
Writer-economist and former ambassador to the United States Bernardo Vega takes on the exporting of corruption in his Op-Ed piece in today's El Caribe. Vega points out that for there to be corruption there has to be two parties: Those who offer the corruption and those who accept it. He says that in the Dominican Republic, many of the cases of corruption come from international loans provided by private banks that finance goods and services that are overvalued and whose promoters bribe local officials in order to gain approval. Shooting at all of the actors, Vega says that the corruptor is the foreign supplier that hands over the bribe money, the private bank that financed the deal as well as the state agencies, such as CESDE from Spain or the Exim Bank from the US, that guarantee the loans against political risks and without whose support the deal would not go through. Vega says that the last two entities mentioned do not hand over the bribe money, but they do wink at the little transparency and large overvaluation of what is being sold. The banks want to make money and the state agencies want to promote exports for their countries.
For years now, according to the former ambassador, the European Union has had an agreement to stop this type of activity, but it has been ignored by all. In the United States there is the Foreign Corrupt Practices Act that is more efficient in its application and is the explanation as to why US companies build few public works projects in the DR. Under the DR-CAFTA agreement, the country will be obliged to hold transparent international bidding for public works and government purchases, but if the Europeans and the Brazilians give out bribes and the Americans don't, these bids will be rigged.
In Europe, Vega says that there have been attempts to compile a "Black List" of companies that promote corruption in Latin America, and the recent ALCATEL scandal in Costa Rica is moving this forward.
The important NGO Transparency International is pushing the concept that the industrialized nations had best clean up their own houses before insisting that the Third World does the same. Another proposal from TI is how to make it more difficult for the corrupt to launder their bribes. Both the World Bank and the IDB have opened offices to insure the honest use of the monies they hand out.
There is a fear that China with its massive and efficient sales efforts in Latin America, together with its practices of bribery will make the European, American and international efforts all the harder.
Vega does have a bright light, and it is the power of the press. He calls it the best vaccine against corruption. However, he observes, it does not necessarily stop all of the wrongful activity. He cites the campaign carried out by the El Caribe newspaper in 2001 and 2002 against dozens of loans from Spain, Belgium, and the United States. More loans were approved (for helicopters, Plan Renove, and the multi-use buildings than were halted (houses for military personnel and teachers, the Livornio loan, the Jamco hospitals etc.), and it was during the administration of Hipolito Mejia that not only did the country become, for the first time in its history, a debtor to commercial banks for the purchase of military hardware, but also for the first time it negotiated corrupt loans with the US Eximbank.
See http://www.elcaribe.com.do/articulo_multimedios.aspx?id=51180...
President Leonel Fernandez comes second in the ratings for regional presidential job performance for the first semester of 2005, according to a CID-Gallup Latin American poll. President Antonio Saca of El Salvador has the highest rating with 62% followed by Fernandez with 48%. Others in Central America are Abel Pacheco of Costa Rica with 40%, Ricardo Maduro of Honduras with 32%, Enrique Bolanos of Nicaragua, Martin Torrijos of Panama with 26% and Oscar Berger of Guatemala with 16%. This is one of the results from the latest public opinion surveys conducted by CID Gallup in seven countries in the region during the first semester of 2005. At least 1,200 adults were polled by telephone in the DR.
The polling company comments that Fernandez is in a honeymoon situation "because like Saca, he is also relatively new to the job." Nevertheless, it points out that Fernandez's popularity is plummeting daily. According to CID-Gallup, "even though the majority of respondents in the DR still have a favorable view of Fernandez's performance, his evaluation index fell by 30 percentage points between December 2004 and April 2005." The poll attributes the decline "in part to his inability to solve the country's economic problems and failing to address the lack of electricity supply in the DR."
http://www.cidgallup.com/cgi-bin/noticias.fwx?la=en
Businessman Frank Rainieri, president of Grupo Punta Cana, asked the Ministry of Tourism to revise its proposal to impose a tax of US$5 on airfares of tickets purchased abroad as of August. Rainieri believes that the measure should be one of consensus. He said that between 2003 and 2004 Punta Cana airport alone generated more than U$110 million for the state, which has not yet invested a cent in the Punta Cana area. He wondered how the state is going to develop another tourism area if it does not back the existing ones, as reported in the Listin Diario. Ministry of Tourism has given priority to the promotion of the opening of a new tourism destination in the southwest.
"That is why I say that we have to think this over, that it cannot be an impulsive or unilateral decision, it has to be a measure of consensus. He said that President Leonel Fernandez has been characterized as a man of consensus. Rainieri was interviewed at the close of the American Chamber of Commerce luncheon on Wednesday.
He said that it was now time to evaluate the country's performance, and stated that competition has grown faster in the cases of Cancun, Cuba and Jamaica that show better growth than the DR. He added that the country should look within and study the reasons for this situation. "We are calling on the Ministry of Tourism to engage in a dialogue on the US$5 measure and we believe it is time to sit down with legislators and discuss fiscal reform."
In the National District (Santo Domingo city), the municipal government has identified 200,000 families that are vulnerable to flooding from rivers and creeks as well as possible landslides. According to the head of the Center for the Prevention and Assistance for Disasters (CEPREMID), Jose de los Santos Gil, the government will spend RD$2.9 million in order to warn these families. The situation becomes more intense with the approaching hurricane season, which this year is predicted to be more active than normal.
The United Nations Development Program 2005 Human Development Report says that education in the Dominican Republic is inefficient in spite of increased spending that has gone mostly into salaries, and proves that "greater spending does not provide better results in the system." According to the UNDP, it takes 28 years of spending to produce a single high school graduate, and "this is too inefficient to produce positive results just by increasing expenditures." The program says that it is worrisome that so little attention is given to secondary education. The report says that not only is there a relative insufficiency in the amount spent (on secondary education), but there is also a marked inefficiency in how it is spent. The World Bank established that the educational sector in the Dominican Republic suffers systemic deficiencies. This implies that greater expenditures would not necessarily lead to better results. The WB says that one indicator shows that 50% of those that enter first grade only manage to reach the fourth grade, 22% complete the elementary 8 year cycle and only 10% finish high school. As a result, the country has to spend a lot of money to produce an educated citizen or a qualified worker. The report further blasts the amount spent on education in the D.R. "Compared to 137 countries, the Dominican Republic registers expenditures on education as a percentage of the GDP that is half of what is expected (4.6% is expected) according to world standards. In Latin America only Ecuador and Guatemala spend less on education than the Dominican Republic.
Six days after an army sargeant confessed that he had murdered Joel Diaz Sarmiento and Yaniris Ruiz Sanchez and that deacon Meregildo Diaz y Diaz was the intellectual author of the crime, the Roman Catholic Church religious congregation, Terciarios Capuchinos announced the deacon would be expelled. Diaz y Diaz was director of the Centro de Educacion Infantil Hainamosa. Family lawyer Pedro Duarte Canaan says that this was a turnaround by the congregation that since the arrest of the deacon occurred they had "protected, defended him before the press and accompanied him to the prosecutors office. He criticized the congregation for not acting when the Ministry of Education's psychology department sent them a report in 2003 that described Diaz and Diaz "as a psychopathic personality."
In addition to the murder of the couple, Diaz y Diaz is accused of sexually abusing four youths. Diaz y Diaz is in jail.
On Corpus Cristi Thursday, the archbishop of Santo Domingo, Cardinal Nicolas de Jesus Lopez Rodriguez, asked for forgiveness for 'abominable and criminal" deeds that have involved members of the Church. Without mentioning any case in particular, the cardinal said that the events had caused pain, death and un-repairable moral and spiritual damages, and he called upon the judges to be severe in their decisions for these "most serious" offenses.
With the Archbishop of Santo Domingo, Cardinal Nicolas de Jesus Lopez Rodriguez, calling for abortions to be classified as crimes under the Penal Code, and the director of the Caribbean's largest maternity hospital, el Hospital de Maternidad Nuestra Senora de la Altagracia, asking that abortion not be legalized, the issue is once again on the forefront of public opinion. According to El Caribe, there are 300 abortions a month are performed at the maternity hospital in Santo Domingo, the nation's largest health care facility for pregnant women. Dr. Juan Cid, the hospital's director, said that if abortions were legalized, there would be thousand upon thousands of abortions by women that simply did not want their pregnancies to come to fruition.
And, at the hospital, even their statistics are not all that clear. Young women seldom admit provoking an abortion and usually say that "they fell," thus producing the loss of the fetus.
A pastoral letter from the Dominican Council of Bishops is asking the Congress to modify articles 225, 226,227 and 228 of the Penal Code. The bishops said that "we Dominicans should never vote for a legislator that does not defend life and that promotes the culture of death." The letter also wants to change the name of the crime from "Illegal Interruption of a Pregnancy" to "the Crime of Abortion." Some NGOs are requesting that abortions be permitted under special circumstances.
An estimated 85,000 abortions are carried out in the DR a year.
Tune in on Monday, 30 May at 9 pm to Telemicro (Channel 5 on Telecable) to watch three Dominicans vie for the Miss Universe title. Representing the DR is six-footer Renata Sone. But Italy is represented by DR-born Maria Teresa Francville, daughter of a Dominican mother and Italian father. This is Francville's second time representing Italy in the Miss Universe pageant. Aruba is represented by Luisana Cicilia, whose mother is Dominican. In 2003, the Dominican Republic won its first Miss Universe title with Amelia Vega in Panama. This year, Claudia Cruz of the DR was the runner up in the Miss World pageant. See photos of the contestants at http://www.globalbeauties.com/universe/2005/gallery/PSGowns/PSGowns.htm
In this page, Miss DR Renata Sone receives favorable comments from several pageant observers.
See http://www.globalbeauties.com/universe/2005/u05_7wonders.htm
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