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Daily News - Tuesday, 15 May 2007

Government has big surplus
The Central Bank report points out that the fiscal sector registered a RD$4.64 billion surplus in the first quarter of the year. The surplus reflects the revenues derived from the January tax increase. The non-financial public sector also generated a revenues surplus of RD$862.9 million. The consolidated balance of the non-financial public sector was a positive surplus of RD$5,511.7 million. This is RD$211.7 million more than the IMF Stand-by arrangement had estimated.
Valdez explained that the government has comfortably met the monetary objectives set with the International Monetary Fund for the first quarter, and said that the government had a surplus of RD$7.05 billion that was used to strengthen the international reserves. At the end of March, international gross reserves were US$2.55 billion, for a US$296 million increase, compared to the level at the year's end of 2006. Liquid reserves were US$1.31 billion, for a US$176.7 million increase. "It is important to point out that the behavior of the international reserves is consistent with the global result of the balance of payments that was positive by US$261.6 million," said the governor of the Central Bank at a press conference held yesterday.
An IMF mission is currently in the DR for the seventh review of the Stand-by arrangement.

Economy grows 9.1% in first quarter
The Dominican economy, as measured through Gross Domestic Product (GDP), experienced a slight decrease in growth during the first quarter of this year, but continue to maintain a remarkable high growth pace. Preliminary estimates by the Central Bank indicate that between January and March, the economy grew 9.1% compared to a 10.9% growth during the same period last year. Central Bank governor Hector Valdez Albizu says that the figures demonstrate that the economy maintains its accelerated pace of growth. During a press conference Valdez Albizu pointed out four reasons for the growth of the economy at such a rate. The first was a 19.7% increase in imports, second was a 65% increase in exports, third was financing in the banking sector that had an absolute growth of RD$33.70 billion during this quarter. Finally, Valdez Albizu mentioned an 18.5% increase in investment. Bank statistics show US$333.1 million have entered the country in foreign investment.

Wall Street says DR outperforms
Wall Street has responded positively to the Central Bank first quarter news on the economy. Franco Uccelli of Bear Stearns described the country's economic performance as "quite strong", mentioning the 23% growth in financial sector, 21% in communications, 17% in commerce and 13% in public utilities. Likewise, the brokerage firm highlights the fact that real GDP expanded by a higher-than-expected 9.1% during the quarter, prompting the Central Bank to revise its growth forecast for 2007 as a whole to between 8%-9%, compared with a 6% initial estimate.
Uccelli comments that "economic dynamism during the first three months of the year was also underpinned by a sizeable increase in bank credit to the private sector, which has climbed by 23% over the past year, as well as by a 19% rise in foreign direct investment and a 9.3% upsurge in remittances during the quarter. Increased capital inflows, for their part, strengthened the currency and boosted net international reserve levels (IMF methodology) by 16% to more than US$1.3 billion, an all-time high."
Furthermore, he comments that the Central Bank also noted that preliminary evidence indicates that the country's key fiscal targets for the first quarter have been comfortably met, due largely to higher-than-expected collection levels. "While valuation considerations recently caused us to tone down our recommendation on the Dominican Republic's foreign-currency-denominated bonds to marketperform, we believe that its strong fundamental performance suggests that the risk is on the upside," he concludes.

Government could save RD$7.5 billion
The Dominican government could save some RD$7.5 billion each year, based on figures from the 2006 budget, if Law 340-06 was followed as approved by the legislature. This law, that deals with Purchases, Contracts, Public Works and Concessions, has been in Congress for over a year, and Eric Hazim, the director general of Public Contracts, said that at least 15% could be saved once the legislation is passed. Because Law 340-06 calls for complete transparency in all public spending, tender offers and concessions, there has been some slow-down in the application of the legislation as interests groups try and delay the end to their paydays. Hazim said that by following Law 340-06 to the letter, any supplier can acquire the necessary information on government purchases through the website at www.finanzas.gov.do

All is fine between DR and Venezuela
Minister without portfolio Miguel Mejia is denying reports that relations between Venezuela and the DR are tense and says that both countries remain strong allies. The minister downplayed the importance of 16 public work projects for the DR, which have not been approved by Venezuelan President Hugo Chavez. Mejia says that the delays are because approval of any project must go through a rigorous process. Possible tensions between the two countries could have developed late last year when the Dominican Republic, instead of supporting Venezuela's bid, decided to enter the running for an open seat on the United Nations Security Council, a position neither country won.

Everything goes up
Dominican consumers woke up on Saturday morning facing the highest prices, ever, for most fuels. Premium gasoline hit RD$158.10 a gallon and regular gasoline was pegged at RD$147.50 a gallon. LPG, the propane gas used in many homes for cooking came down RD$0.95 and diesel fuel came down RD$2.50. Officials at the Ministry of Industry and Commerce are blaming the increases on problems in the United States petroleum market. In the meantime, drivers of the little "conchos", those ubiquitous and rickety cars that serve passengers along Santo Domingo's major thoroughfares, have increased their fares from RD$10 to RD$12 in spite of warnings from local transportation czar and minister of state Diandino Pena. Meanwhile, the government announced the Fund for Development and Financing of the Transport Sector, a new plan to finance vehicles for transporters.

Congress back to work
After almost one month in recess, the Chamber of Deputies is going back to work today. Congress took a break because of the PLD primary election that was held on 6 May. The Senate resumed its legislative duties last week.

Free zone exports down by 25%
Exports from the formerly vibrant industrial free zones in the Dominican Republic have fallen by 35% in the textile sector. The sector is certainly going through its worst moments. According to data from the United States Department of Commerce, Dominican textile exports fell to just US$275.2 million in the first quarter, down from US$368.1 for the same period in 2006. Not only was the value of the exports much lower, but also the amount of material, which fell by over forty million square meters of cloth. While the DR is the most affected by the changes in the textile sector, all of the nations in Central America experienced smaller losses. China and Vietnam are the two big winners in the textile race.
See http://otexa.ita.doc.gov/prelimadmin/msrcty/a2470.htm
As reported in Clave Digital, The Federation of Industries (FAI) is urging Congress to pass laws that would help save half a million manufacturing jobs. Ignacio Mendez mentioned the laws President Fernandez recently presented to Congress aimed at boosting the competitiveness of local industries - Industrial Competitiveness and Innovation, Commercial Associations and Individual Limited Responsibility Companies, Regime for the Development of Micro-, Small- and Medium-scale Companies, and Mercantile Restructuring and Legal Liquidation.

Orange provides new service
Orange Dominicana is offering a new service that will allow its customers to transfer all contact information to another user with just one click of a button. The new service, available from today, will allow a user to create a profile that includes name, number, address and other information. When the user finishes a call they will be asked whether or not to send the profile so that the person who just received the call doesn't have to manually type in the information. The receiver will then receive an instant message with the sender's info and they can then choose to save the information on their phone.

INDOTEL closes shops
The Dominican Telecommunications Institute (INDOTEL) has closed down two cellular phone shops that were reactivating stolen cell phones in violation of Indotel regulations. The stores were closed temporarily and their equipment confiscated. The closures were in Herrera, and Los Mina, both in Santo Domingo. David Comunicationes, d'Morenaje Comunicaciones and K.P. Comunicaciones were found to be in violation of Telecommunications Law # 153-98. Indotel director Jose Rafael Vargas promised to continue the fight against places that reconnect stolen cell phones.

Macarulla fears anti-DR campaign
The National Council of Private Business (CONEP) is claiming that there is an international campaign to discredit the DR. CONEP feels that it is also a direct attack on the country's sugar industry. Although CONEP president Lisandro Macarulla refused to name the particular entity he was talking about, he did say that the country doesn't discriminate against Haitian or Dominican laborers and that there is no wage difference between the two. Macarulla then referred to a documentary about the Dominican Republic that is being shown in France this week and said that the film is damaging the country's image. He said that legal action should be taken against the producers.

US officials deny intervening
The US Embassy press attache Dale Largent is denying claims that the United States tried to influence Dominican nationality policy. Largent made his statements in a letter sent to Hoy newspaper in response to comments made by President Leonel Fernandez during a meeting with the Corripio Group on 3 May. Fernandez said that the United States tries to impose nationality policies on other countries and as a response the DR should come up with constitutional mechanisms that go beyond the "jus solis." Fernandez said that the US has its own nationality policies but tries to impose them on everyone else. As a response Largent said that the US strongly respects other countries' sovereignty. Largent said that the DR is misinterpreting the situation and says that this misunderstanding is due to the different, non-related issue of the registering and documentation of non-resident foreigners.

US Embassy donates equipment
Acting US ambassador to the DR Roland Bullen has donated equipment and uniforms to a baseball team from El Seibo that will be traveling to New York later this month. The children are part of the Police Athletic League, sponsored by Police Chief Bernardo Santana Paez. The US Embassy Anti-narcotics unit, which is run by Joseph Hooten, made the donation. The children, between the ages of 13 and 14, will use the equipment during the first International American Cup Games, being held in Corona, Queens, New York on 18 to 28 May.

Confiscated Viagra was headed for DR
The French authorities have confiscated a shipment of Viagra that was destined for the Dominican Republic. The shipment contained 50,000 boxes of fake Viagra pills and Diario Libre writes that that the pills were manufactured in India. The pills had an estimated sales value of EUR3 million.

Inmates learn skills; get paid
Female inmates at the Najayo prison in San Cristobal are learning useful skills and will be getting paid for their work, according to Attorney General Radhames Jimenez Pena. Jimenez, who was in Najayo yesterday touring the prison installations, commented on the work being done by the women who work in a cafe, a small shop and in a bakery located inside the prison. The facilities, which were also inaugurated yesterday, could provide products that can be sold within the jail and to people in the surrounding area. Jimenez said that this is part of the new penitentiary model that seeks to rehabilitate inmates.

Kids get help in Santiago
16 children with heart problems were operated on at the Arturo Grullon Children's Hospital in Santiago de los Caballeros last week. The operation was organized by Corazones Unidos del Cibao and the Public Health Ministry. All told, some 500 children have benefited from the program called "A Heartbeat for Vanessa" according to Juan Ramirez, the organization's president. The program has the support of doctors from Albany, New York and Lansing, Michigan who came to the city for the fifth time. The doctors work with their Dominican colleagues on these operations. All in all, 25 children were evaluated and sixteen were subjects that required operations. The value of the operations is far beyond most parents' capacity to pay, costing over RD$300,000 each, or a total of RD$4.8 million.
 
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