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Daily News - Tuesday, 06 March 2007

Fernandez at building site
President Leonel Fernandez will be visiting the Institute for Innovation and Business Competitiveness building's future site today. The building is being constructed with an RD$200 million donation by the Japanese government. Eddy Martinez, director of the Dominican Republic Center for Export and Investment (CEI-RD) explained that the ceremony would take place behind the CEI-RD offices located on 27 de Febrero and Luperon Avenues. Martinez took the opportunity to spotlight the work that CEI-RD is doing in the area of human resources in order to attract foreign investment, and spoke of the CyberPark development, where two new buildings are being constructed to house Network Access Point (NAP) del Caribe and a Indian-American company that produces electronic and auto parts.

Time for Arabian investments
Foreign Relations Minister Carlos Morales Troncoso was guest of honor of the government of Saudi Arabia yesterday. A Dominican mission is visiting in Riyadh. A dinner in honor of the Dominican delegation was held at the Residence of Prince Turki Al Faisal Bin Abdulaziz. Among those present were Prince Saud Abdullah Al Faisal, president of the Saudi Investment Group; his Excellency Hassan Yousef Yassin, of the Kingdom Consortium; Deputy Minister of Petroleum, His Excellency Abdulaziz Bin Solman; and Kalid Bin Saud Bi Khaled and Mohamed Bis Saud Al Saud of the Ministry of Foreign Relations.
Prince Turki Al Faisal has traveled to the DR on business and for pleasure and met with President Leonel Fernandez. There are plans to open a Dominican Embassy in Saudi Arabia and a Saudi Arabian embassy in the DR this year.
Others representing the Dominican government were Ambassador in Qatar Hugo Guilliani Cury, Ambassador in India Hans Dannenberg and energy businessman Rolando Gonzalez Bunster.

Energy distributors increase collection
The Cash Recovery Index (CRI) reached 58.8% in January, a 10% increase compared to the same period in 2006, as reported in the Listin Diario.
The CRI for the last six months, according to a report by the State-Run Electricity Companies (CDEEE) is at 56.21%. The increase in collection by the energy companies has been one of the International Monetary Fund's main stipulations. A report published today by the CDEEE establishes that the government expects to subsidize the electricity industry with US$400 million this year, down from US$545 million in 2006.
Energy companies billed users RD$2.9 billion in the month of January and collected RD$2.5 billion - an 85.7% collection rate, as reported in the Listin Diario. This does not include users in the Blackout Reduction Program (PRA) zones, where users participating in the program are billed a fixed sum, regardless of power consumed.
During January last year RD$2.6 billion were billed and the energy companies only collected RD$2 billion for a 77% collection rate.
Diario Libre reports that the distribution companies suffered losses because on average they only bill 69% of the power they purchase from the power generation companies.

JCE in Puerto Rico
Central Electoral Board (JCE) Administrative Chamber president Roberto Rosario has visited Puerto Rico to inform Dominicans resident there about JCE services that will soon be available on the neighboring island. Rosario announced that Dominicans living in Puerto Rico will be able to receive birth certificates from the JCE office there and will eventually be able to receive their cedula identity cards as well.

CEI-RD forecasts increased exports
The Dominican Republic Center for Exports and Investment (CEI-RD) is projecting an increase of US$17 billion in exports in the next two years, while warning of the need to improve the energy sector, production capacity and infrastructure, and financing in order to compete on the international markets. The report also points out that the DR needs to adopt a new export promotion model and also needs to become familiar with the demands of the markets the country is exporting to. CEI-RD is planning on implementing a development plan for exporting companies. The plan aims to train 100 companies in how to make the most of the DR-CAFTA free trade agreement. The construction of the new Business Training and Innovation Institute with the support of JICA, the Japanese International Cooperation Agency, is another element of this plan.

Businesses ready for CAFTA
According to a study by the BHD Bank, through the private consulting company ASE-CAFTA, 70% of Dominican businesses are ready to effectively compete as the new free trade agreement comes into effect. The report points out that the remaining 30% of businesses must undergo a transformation and restructuring process as well as improving their standards if they wish to compete. The study also explains that although some businesses need to restructure in order to compete in the context of DR-CAFTA, these businesses are part of sectors that were highly protected by the free trade agreement. The report looked at 530 small, medium and large businesses.

Hipolito and Danilo comment on FTA
Former President Hipolito Mejia says that the DR-CAFTA free trade agreement came into effect too late and that this delay has caused irreparable damage to the country's free trade zones. Mejia went on to say that President Leonel Fernandez was to blame for the delay because he believes that Fernandez wasn't convinced that the agreement was a "viable option" for the country.
Presidential candidate Danilo Medina is urging the government to implement a competitiveness plan in order to bolster national industries for the strong competition they now face from foreign markets. Medina warned that failure to implement such a plan will lead to the disappearance of many businesses and the loss of jobs for many Dominicans.

Importers wait 45 days for DR-CAFTA
Importers say that it will take 45 days for consumers to feel the effects of DR-CAFTA. According to Domingo Espinal Collado, vice-president of the Dominican Warehouse-owning Importers Association (ADAI) the public will not feel the changes to the same extent. Espinal explains that products coming from Central America will not experience price changes because according to him, a free trade agreement has been in effect for three years now. The Ministry of Industry and Commerce's Foreign Trade Director Vilma Arbaje disagrees with Espinal, who says that the effects of the free trade agreement would vary. Arbaje says that prices should drop in proportion to the tariffs that are being removed. Arbaje says that the public will feel the effects of the free trade agreement once businesses change their inventory.

DR finally ready for San Jose Pact?
Diario Libre reports that the DR has fulfilled its part of the deal and is now ready to receive US$201.8 million in soft interest loans from Mexico, as part of the San Jose agreement. Treasury Minister Vicente Bengoa made the announcement but did not say when the country would receive the funds. Bengoa says that the delay is due to the fact that the country has is already at its ceiling for taking on debt. Bengoa also said he needs to speak to Foreign Minister Carlos Morales Troncoso and discuss the details of a conversation that President Leonel Fernandez had with Mexican President Felipe Calderon. Calderon and Fernandez met while both were attending the Rio Group summit in Guyana on the weekend. If the soft interest loans do materialize, this part of the agreement would have taken 27 years. Contrary to Venezuela, Mexico demands commercial banking conditions for the loans. The San Jose accord was signed on 3 August 1980 and is a regional fuel supply agreement for the purchase of oil at preferential market prices from Mexico and Venezuela. The two countries agreed to provide soft loans for development projects for 20-25% of the purchase price of the oil. So far, only Venezuela has honored this part of the deal.

Sugar production slows
Figures released by the Dominican Sugar Institute (INAZUCAR) reveals that during the 2005-2006 sugar production season the DR only produced 490,350 metric tons of sugar, which wasn't enough to cover domestic demand or fill the export quota to the United States. This collapse is blamed on a lack of capital.

Darys Estrella to Bolsa de Valores
Darys Estrella, one of the founders of Dominicans on Wall Street, has been chosen to take the Dominican Bolsa de Valores, the local stock exchange, to a new level. Currently, the DR stock exchange primarily works with commercial papers. The Financial Times was the first to release the news, with a brief in its 19 February issue where it commented on Goldman Sachs' push for domination of the world financial system. As the FT points out, The New York Stock Exchange, today run by ex-Goldmanite John Thain, is about to gain control of the stock exchanges in Paris, Brussels, Amsterdam and Lisbon. "Now another is falling into the Goldman maw. Darys Estrella, who has worked for Goldman Sachs in New York for five years, is off to run the Bolsa de Valores de la Republica Dominicana," writes the newspaper. The comment ends with a "What next? The US Treaasury?"

Rockash funds will be used for clean up
Although some sectors in Montecristi and Samana provinces want to see the compensation money from the rock ash case invested in their communities, Environment Minister Max Puig says that it will be used to pay for the rock ash removal. According to Puig, the removal of the substance will ultimately benefit the surrounding areas. Puig explained that the funds that the AES Corporation has agreed to pay, US$6 million (RD$200 million), will be deposited into a bank account in the United States and will be used to pay the companies that were contracted to clean up the fly ash. Saturday's Listin Diario reported that the AES Corporation and the Dominican government had reached a settlement, thus ending the court case being heard in Virginia Federal District Court. AES Corporation was on trial for dumping more than 50 tons of the rock ash, also known as fly ash, in Samana and Montecristi provinces.

Vicente Fox visits DR
Former Mexican President Vicente Fox was in the Dominican Republic over the weekend, representing the Christian Democrats of America Organization at the Social Christian Reformist Party's (PRSC) Second Congress named in memory of their late leader, former President Joaquin Balaguer. Before his departure, Fox commented that the Dominican Republic needed to be governed by a humanist center party with a Christian democratic ideology. Fox also called for an increase in stability and a better distribution of wealth in the country.

Hubieres: "anything can happen"
National Transport Federation (FENATRANO) president Juan Hubieres is claiming that the government has broken its pact with union leaders and warns that as from this moment anything, like the stoppage of bus services or a national protest, could happen. Hubieres said that drivers could increase fares to RD$ 20.00 tomorrow, and that they hadn't done so up till now because of prudence. Hubieres denied that the transport unions were at fault in the collapse of talks with the government, because according to him the drivers are always willing to negotiate. Hubieres also accused the Transport Reorganization Office (OPRET) sub minister of bribery and says that government employees have been trying to bribe union leaders in the provinces of San Cristobal, Bani and Azua. Hubieres also warned that if they increase fare prices and the government intervenes, all bus services would cease.

Naming the "jevitos"
Jevitos are what Dominicans call the youths that drag race on main city roads late at night. The races have killed several that were in the wrong place at the wrong time. For the first time, the Police announced yesterday the names of eight youths that were arrested for racing on the Mirador del Sur Park avenues. The arrested are Pedro Alfonso Correa, Orlando Javier Arias Baez, Roberto Acosta Abreu, Yeremi Alonzo Alonso, Willy Pastrono Hernandez, Gaby Ramirez Perdomo, Osvaldo Valdez Sanchez and Marcos Encarnacion Mendoza. While penalties are minor because of what is established in the law, this is the first time that the names of those that will be accused of reckless driving are published in the media.

Rains expected
Heavy rains across all areas in the Dominican Republic are expected on Tuesday and Wednesday as the front moves northwards across the DR. Recent reports also indicate that temperatures have continued to increase and remain between 30 and 33 degrees Celsius (86 and 91 Fahrenheit), which is unusual for this time of year.

Sosa, Horford and Mejia get honors
Edgar Sosa and Sammy Mejia have been honored for their splendid play on the hardwood this season. Sosa, a point guard at Louisville has started all but two games for the Cardinals and was included in the Big East All-Rookie Team. He was also named player of the week in the Big East. Mejia, who is in his final year at DePaul University, has averaged 14 points, 6 assists and 3 steals per game this year. He was included in the Second Team All Big East. Finally Al Horford, Tito Horford's son, reached a milestone at the University of Florida when he scored his 1,000th point. He is the 41st Gator to accomplish the feat. Horford is averaging 13 points, 9 rebounds and 2 blocks per game and is leading favored Florida to the NCAA tournament where the Gators look to defend as national champs.
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