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Daily News - Wednesday, 16 May 2007

Problems with the IMF?
Economy, Planning and Development Minister Temistocles Montas is warning that there might be some problems with the IMF in the seventh review of the Stand-by arrangement that pretty much controls government spending. According to Montas, two legislative initiatives still need to be approved by Congress - the Criminalization of Electricity Theft and the Central Bank Capitalization. Montas said that the government is doing everything it can to get the legislation passed but if it does not go through, these two issues will have to be taken up with the IMF team that is arriving today to look at the country's progress. According to the MEPD minister, the IMF team will work out a new Letter of Intent that will be placed before the IMF board of directors in June. After the approval of the fifth and sixth Letters of Intent, the DR received a disbursement of US$57 million from the IMF and, according to Montas, US$228 million is still pending, which would be used to capitalize the Central Bank. The electricity theft bill was opposed by business and consumer sectors that complain it would increase the cost of doing business and was one-sided in the penalties applied for fraud.

Companies delay deductions
Because of the confusion surrounding the announced start-up of the SFS, the Family Health Insurance system proposed by the government, many businesses have chosen to not started deducting the 2.7% required by the law for the SFS. According to El Caribe, the business community has delayed these deductions until the next pay cycle. According to interviews conducted by the paper's reporters, employers said that they were delaying the deductions because of the uncertainty that the government plan would offer the services needed by the workers after physicians and clinics rejected the levels of pay they would receive. The leaders of the Dominican Confederation of Business Owners (COPARDOM) and the National Association of Young Entrepreneurs (ANJE) coincided in their agreement that businesses should wait until the situation is clearer before deducting monies from workers' salaries. Celso Marranzini, a former Business Council (CONEP) president concurred. According to the newspaper, of the fifteen businesses that were consulted only one said that they had made the additional 2.7% deduction.

Workers compensation deductions
President Fernandez has decreed the levels of workers' compensations deductions last night by decree 255-07. The decree establishes four levels of deduction for workers' compensation according to the risk level of the occupation. The deductions go from 0.10% to 0.30%. The funds collected will go towards the workers' compensation portion of the SFS, the Family Health Insurance system that the government still insists on implementing on 1 June. Companies with good safety records can apply for a reduction in the level of risk assessment and thereby reduce their deductions.

Slow funding foils plan
The president of the Free Zone Industrial Association, Aquiles Bermudez, has expressed his disappointment at the fact that the government plan to revitalize the textile sector of the industrial free zones has failed to work because the government has not disbursed the needed funding. Bermudez said that the textile sector had high hopes due to the government's promises, but nothing has happened to fulfill those promises. The industrial leader told Hoy reporters that the delays would have a domino effect as more and more businesses close. He reported that in the main Santiago Free Zone, three more business will close in the coming days. According to Central Bank figures the Free Zone industries have diminished by 12%, and there "is no light at the end of the tunnel." According to Bermudez, the billion pesos promised by the government to make the textile sector more competitive are stalled in bureaucratic red tape. "We hope that the funds will be released shortly because many factories have committed the promised resources to the purchase of materials." Bermudez was quoted after signing an energy-saving agreement with the National Energy Commission.

Ortega proposes a flat tax
Economist, negotiator and ambassador to Colombia Julio Ortega Tous has called for a simplification of the local tax structure and suggested a flat 10% tax on all imports, a 10% tax on incomes and a 10% VAT tax on everything, with no exclusions. This follows a similar proposal by US economist Victor Canto, who was one of late former President Ronald Reagan's economic advisors, and years ago by Frederic Emam Zade, today director of the Funglode think tank in Santo Domingo. Ortega Tous cited what is happening in the tobacco sector, where cigarette manufacturers are halting local production and importing product for the local market. "What is worse" according to Ortega, "is the risk of contraband and counterfeiting." Ortega used Ireland, a country that was one of the poorest in Europe 17 years ago, as his example. By simplifying the fiscal structure, Ireland has become a magnet for investors and is now one of the richest countries in Europe. In the past, income tax in Ireland could be as high as 76%, but today it is just 15%. Ortega pointed out that he was not looking to reduce the government's income levels but to simplify the system in order to guarantee current levels or even an increase of income. According to Ortega, the IMF does not see things the same way, and has not realized what has happened in the tobacco and alcoholic beverage sectors where the highest taxes have produced a decrease in collections.

Deputies modify Penal Code
The Chamber of Deputies has approved the modification to the Penal Code proposed by former senator Jose Tomas Perez. These changes include, among other things, obligatory preventative custody for repeat offenders in cases involving violent crimes such as homicide, aggravated assault or rape. The changes also provide for 48-hour custody before filing charges, and for arrests without a warrant in cases involving anyone caught in the act or fleeing from the scene of the crime. These modifications were sent to Congress on 20 June 2006, and were then sent to a special Senate commission for study. The Senate passed the bill, but then it had lagged in the Chamber of Deputies until now.
The modifications approval coincides with this week's front-page headlines about an attack on the daughter of Supreme Court of Justice vice president judge Luciano Pichardo. The woman was relieved of her documents, RD$1,000+ in cash and her keys as her young children looked on. She had just arrived at her father's home in the Julieta neighborhood after doing her supermarket shopping at around 3pm on Sunday.
Shortly before, not far from there, seven people were wounded after three men dismounted from a Suzuki Gran Vitara and attempted to rob a sports betting store on Avenida Charles Sumner, Los Prados on the same day. The raid on the betting store was averted when one of the clients confronted the assailants, but was injured when one of the would-be thieves returned fire, injuring six other bystanders. In both cases, the assailants managed to get away.
Supreme Court vice president Judge Rafael Luciano Pichardo called for more drastic measures against crime after his daughter was robbed on Sunday. He attributed the increase in crime to the lack of penalties.
The Supreme Court, which oversees the judicial system in the DR, has itself been blamed for the crime rate because of leniency on the part of some judges who are notorious for their failure to convict drug traffickers.

Accounts mess gets messier
Three of today's major newspapers give prominence to the very scandalous pay raises at the Chamber of Accounts, the government's accounting office, in January. Diario Libre says that a total of RD$157.9 million will go to the accounting office's nine magistrates during their term in office, if the 72% pay increase they voted for themselves a month into their appointment, is maintained. By the end of the year, each magistrate will have received RD$4,049,948.52, and by 16 August 2010, each will have received over RD$18 million. The paper said that the magistrates increased their salaries from RD$188,000 to RD$449,000 with "a stroke of the pen". Other news reports say that with benefits, they are making upwards of RD$600,000 a month.
Chief magistrate Andres Terrero told the paper that the judges should handle the issue "internally and in harmony." The paper points out that many government officer salaries far exceed the RD$90,000 that President Fernandez receives. The Treasury Minister gets RD$740,000, the Banking Superintendent gets RD$705,000, the chief judge of the Supreme Court receives RD$600,000, and the administrator of the Banco de Reservas is paid RD$975,000 each month, plus benefits.
Hoy newspaper reports that last night Terrero told reporters that as soon as things settle down a bit, he will ask the magistrates to revoke the pay increase, since he considers it to be a violation of the Austerity Law. He also asked the director of the government's Reservas bank, Jose Manuel Guzman, to certify that he, personally, has not used a cent of the new salary.
Addressing a group of accountants, Terrero admitted signing the pay raise approved by most of the magistrates, but with the knowledge that it would have to be revoked. El Caribe's headline quotes magistrate Lora Ruiz, the only magistrate who refused to vote for the increase, as saying that the Chamber of Accounts is in "a state of emergency." Lora Ruiz is calling for a meeting of the entire chamber to revoke the pay raise that he opposed, and thus put an end to the scandal that has been headline news for more than a week.
The work of the Chamber of Accounts so far has been decorative and symbolic over the years, as the government has not acted on audits that have been carried out.

Pro Haitian migrants campaign
Listin Diario columnist Orlando Gil points out that a major propaganda effort is under way to promote new benefits for illegal Haitian immigrants in the Dominican Republic. "Not even the civil rights situation in the US, or apartheid in South Africa, nor what happened in Rwanda or the former Yugoslavia, produced such a major showing of films as extraordinary as what has been secured for the Haitians who live in Dominican territory," he writes. Films will be shown in several French cities, presenting the case of poverty of Haitians living in the DR. Gil points out that the film festival will open in Marseille, Toulouse, Lille, Lyon, Nantes and Rennes, as well as in other cities. The films were produced by Brian McKenna of the Canadian Broadcasting Corporation, Robert Cornellier and Raymonde Provencher of Extremis TV and Macumba International. Also being screened are films produced by Hispanic TV's Univision. Pierre Ruquoy and Christopher Hartley, two priests who the Dominican Catholic Church asked to leave the country will also be taking part. Ruquoy left shortly after it was revealed that he personally had adopted Haitian children in order to illegally secure Dominican nationality for them. Hartley, who has ties to the Spanish nobility, was asked to leave by the Dominican Catholic Church due to irregularities in his work in defense of Haitian migrants. Upon leaving the country, Belgian priest Ruquoy did not take his "children" with him.
Gil points out these have not been low budget films. Several of the films that focus on the lives of the Haitians in the DR have won major film awards. Gil mentions that Hartley's film "The Price of Sugar" is narrated by Paul Newman.
None of the films focus on the plight of Haitians in Haiti, the reason why Haitians migrate the DR. Gil mentions that the campaign against the Dominican Republic, that many speculate seeks to force the country to legalize the status of the illegal Haitians living in the DR, is heavily funded. Gil wonders: "How come Haiti itself does not garner the solidarity as a nation that the Haitian migrants to the DR have secured? There are still people who have not awakened and noticed that this is a well-orchestrated conspiracy, and while occasional hysteria does not resolve matters, when protests take place here, meanwhile the lies are spread abroad...."
The Dominican government over decades has adopted a laissez-faire policy towards illegal migration from Haiti, with the nation increasingly taking on a greater share of the social burden of the neighboring country's impoverished population.
See: http://www.listin.com.do/app/article.aspx?id=13105

Chamber rejects charges in France
The Dominican Republic Chamber of Deputies has formally rejected the accusations of slavery that discredit and defame the nation. The documentary film made by Hill Haney that features many scenes from Dominican sugar fields, cane cutters communities known as "bateyes", and sugar mills accuses the Dominican Republic of practicing slavery against Haitian immigrants who work in the cane fields. According to Diario Libre, a formal protest will be lodged against the film, which promotes a boycott against Dominican sugar in the United States. The film also urges European tourists not to visit the country by bad-mouthing the foreign investment climate in the DR. The Deputies are asking the government to support the efforts of the sugar industry to put a restraining order on the film due to the serious consequences such a documentary could have on the tourist industry and sugar exports. The resolution passed by the Chamber of Deputies was written by Deputy Victor Bisono and was backed by all the political parties.

The plight of Haitians in Haiti
Former Dominican Republic trade negotiator, former ambassador in Canada and current ambassador in Colombia, Julio Ortega Tous proposed the creation of a Development Fund for Haiti with 5% of the foreign debt resources paid by Latin American countries. He said the fund could be managed by the UNDP and the IDB, together with the Haitian government. He said that while there has been talk of donations to Haiti, the money has not been disbursed. Speaking at a Listin Diario breakfast meeting, Ortega said that Haiti had started out as one of the most prosperous countries in the Western Hemisphere. He commented that the situation in Haiti is the result of the colonial struggles between France and Spain, and Haiti's own independence in 1804. He said that in 2002 the Haitian government demanded that France return the resources it had made Haiti pay after its independence, leaving it in a state of bankruptcy. He said that the Haitian state was founded on ruins from which it has never been able to recover, and the present situation is the fruit of the dramatic legacy of the slave wars that destroyed the land's productive and security structures. He told Listin Diario that the DR does not have the resources to carry Haiti's social burden. He commented that 56% of Haiti's population lives on less than a US$1 a day, which means that 80% are living in extreme poverty, with the highest levels of illiteracy. He called for more than a Plan Marshall for Haiti. He said that in addition to a massive reforestation program, a major plan for distribution of propane gas to the population would be needed.

Number of cell phones
INDOTEL informs that 64% of the population is connected by a telephone, for a 5% increase over 2006. In all, there are 5,763,949 telephone lines operating in the DR, according to a report in Listin Diario. There are 900,084 fixed lines, of which 607,507 are residential, 255,277 are business lines, 22,734 are wireless fixed phones and 14,566 are public phones. There are 4,863,865 cell phones. Cell phone accounts issued increased by 258,206 from January to March.

Cardinal attacks drugs
The Dominican prelate, Nicolas de Jesus Cardinal Lopez Rodriguez, has issued his most resounding condemnation of drug trafficking and drug use, calling it the greatest problem in the Dominican Republic and Latin America. He complained that no government is capable of facing up to the scourge alone. Referring to the local scene, the Cardinal asked local magistrates to "act with courage, bravery, and don't use kid gloves." He said that drug dealers should be seated in the courtrooms and get sentences that serve as examples to others. Lopez Rodriguez admitted that no single government has the wherewithal to be successful against the drug gangs, which are "well funded and well organized." According to El Caribe, the highest-ranking prelate of the Dominican Church condemned the fact that small planes were landing drugs on the south coast highways. The Cardinal was speaking to reporters after the mass celebrating the V Latin America Episcopal Conference currently being held in Brazil.

DNCD recovers drugs
The National Drug Control Department (DNCD) has announced the recovery of 360 kilos of either cocaine of heroin found floating in the Caribbean Sea, 40 miles off the coast of Barahona. The DNCD, as reported in Listin Diario, explained that the drugs were wrapped in 12 bricks weighing 30 kilos each. The DNCD says that an airplane had dropped the drugs into the Caribbean Sea. The drug operation was intercepted because the drugs were sighted by a British helicopter prior to their pick-up by the drug traffickers. Manolo Soto, Ramon Carrasco Carrasco and Epifanio Matos Rochitt have been arrested in connection with the case and Listin writes that Matos had previously been questioned in a case involving 372 kilos and 260 kilos of drugs. DNCD head Major General Rafael Radhames Ramirez Ferreira also reports that Florencio Feliz Feliz and Jairo Ortiz Carrasco were arrested because they tried to retrieve the drugs from the ocean a few hours earlier.

Fort Terrenas?
A series of robberies has led people to believe that the beautiful haven known as Las Terrenas, on the northern side of the Samana Peninsula, might be turning into something more like the well-known Fort Apache in the south Bronx. Diario Libre reports that two men dressed as policemen were captured by security cameras as they robbed the Pinos de Austria Hotel. The Samana Tourist Services Business Alliance reported that eight armed robberies have taken place in Las Terrenas over the last few days including one incident in which a female tourist was injured. Hotel owners showed copies of photographs to the authorities and announced rewards for information leading to the capture of the criminals. Because of the increase in crime, Police Chief General Bernardo Santana Paez has ordered the transfer of the local police commander, but the local business community is considering taking things into their own hands by reinforcing security around their properties. The local citizen security program is being guided by Fernando Tapia, a retired general and an expert in the field, as well as a former defense minister of Colombia.

Amelia Vega in US TV reality show
Dominican Miss Universe 2003, Amelia Vega is credited with the ratings success of Azteca America's La Academia/Suegras reality show aired on US TV. In the show, Vega counseled 12 women, six who were ready to marry men and their mothers as they share living space. In the last episode scheduled for 20 May, the winner will ask one of the three remaining mothers for her son's hand in marriage. TV Azteca is a major contender with Univision for the Spanish language television market in the US.
"Amelia was selected for her exceptional talent, and we expect her national stature and Dominican heritage to serve as a bridge to all Hispanic audiences, especially given the spectacular participants, who represent a broad array of Hispanic American cultures," said Bob Turner, president, Network Sales, Azteca America.
The participants' heritage is diverse with representatives from Cuba, Colombia, Mexico, Puerto Rico, Uruguay and Venezuela. According to promotional materials, weekly challenges for the men and women, as well as the potential mother-in-law participants, reveal motives, habits and possible conflicts.
 
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