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Daily News - Wednesday, 30 May 2007

Health plan on hold for 90-days
In an address to the nation last night, President Leonel Fernandez announced the postponement of the startup of the controversial universal Family Healthcare System (SFS) for 90 days. At the same time, the President appointed a team headed by Vice President Rafael Alburquerque to oversee the successful startup on 1 September. The proposed health insurance plan had been widely criticized due to a lack of information about the workings of the system itself, and because doctors and medical facilities had not reached any definitions of pay schedules. The President cited the lack of information and lingering doubts about its benefits as part of the reason for the 90-day postponement. According to El Caribe and other newspapers, the main economic and health sectors reacted to the announcement with universal approval. Maribel Gasso, head of COPARDOM which represents management in a broad spectrum of businesses, told El Caribe that the President understood that the lack of information and service guarantees were powerful motives for the delay. Her reaction was echoed by Rafael Mena and Enriquillo Matos, heads of the private clinics' association and the Dominican Medical College, who emphasized the need to guarantee services and provide more information to the plan's intended users.
The President announced that during the 90-day period, efforts would be made to install mechanisms to avoid vertical integration between service managers and providers, avoid monopolies that impede citizens from exercising their right to choose the service producer, ban the sale of pharmaceuticals in hospitals (with the exception of government pharmacies) and create a fund to cover traffic accident victims. He also announced that the supplemental health plans that are sold need to offer different services, and not those already covered by the SFS plan.

A call for lower taxes
President Leonel Fernandez announced his administration would be flexible and would accept a reduction in tax tariffs. President Fernandez acknowledged that the January 2007 tax reform has produced on average RD$400 million more than the government had budgeted. The statesman explained that the NCF bill crosschecking system implemented this year by the Tax Department (DGII) was bearing fruit and had considerably reduced tax evasion. The business sector had forecast the government would receive a windfall from the registered tax invoices and that the increase in taxes as proposed and passed by the government was not necessary.
President Fernandez made the announcement during last last night's 22-minute speech where the focus was primarily on the SFS universal health plan.
The President proposed a tax amnesty for people who had not filed taxes, a reduction on corporate taxes, and taxes on beer and cigarettes. Fernandez said that he would send a bill to the Congress within the next few days aimed at reducing taxes on alcohol by 50% and on cigarettes by 80%. In addition, taxes on income, tax on corporations, individuals and businesses owned by a single person would be reduced from 29% to 25% as part of a gradual tax reduction program. Referring to the tax amnesty portion of the legislation, the President said that if this year's taxes were paid, all previous taxes owed would be pardoned.
Economy and Planning Minister Temistocles Montas had advocated for a reduction of taxes on alcohol and cigarettes, arguing that the taxes levied in January had resulted in a considerable reduction in sales, which translated into RD$6 billion less in government revenues. A reduction in the tax percentage is now expected to spur increased sales of beer and cigarettes, and produce more tax revenues for the government.

IMF urges "caution" with surplus
The International Monetary Fund (IMF) team that visited to review the government's economic program is reported to be pleased with the way the Dominican monetary authorities are carrying out monetary and financial policies. The IMF is supporting the program with a 36-month stand-by arrangement (in an amount of US$635 million). However, the team, headed by Andy Wolfe, did urge a "cautious" use of surplus tax monies, and pushed for these to be used in areas not assigned funds in the 2007 budget law.
"Looking forward, the mission urged the authorities to adopt a cautious stance in the management of the higher than expected fiscal revenues, given their cyclical nature, thus limiting any spending increase to well-defined areas not included in the 2007 budget and aiming to save a portion of the additional revenues," according to the IMF.
The IMF's resident representative in the Dominican Republic, Erik Offerdal read the press release. The mission congratulated the authorities on their prudent monetary and financial policies and the resulting favorable macroeconomic environment. Economic growth remains strong, the central bank is successfully containing inflation within the target band, despite a sharp increase in oil prices, the net international reserves of the central bank have increased well beyond the target for the year as a whole, and central government revenues have exceeded budget projections while spending is in line with the budget. The mission also noted as positive the advances in structural reforms; that the introduction of registered tax invoices has reduced tax evasion, that the financial position of the banking system continues to improve, and that the central bank has extended the maturity profile on its stock of certificates and lowered their interest rates.
The IMF report also looked at the good work carried out in the financial recovery of the electricity sector during the first quarter of 2007, but it also warned that for this to continue a strong effort was needed to reduce financial losses for the rest of the year. The IMF team also obtained promises for legislation that will criminalize electricity theft and approve the refinancing the Central Bank. The IMF will be preparing the documentation for submission to the IMF board of directors, and explained that the board discussion should take place in mid-July 2007.

Pressure mounts on accounts office
Over the past week or so, pressure on the Chamber of Accounts (CC) has increased with citizen groups calling for the resignation of the entire panel of magistrates. The Chamber of Accounts is responsible for overseeing the government's management of funds, and earlier this year the magistrates voted a huge salary increase for themselves, despite a Presidential decree on austerity. On Tuesday, Citizen Participation, the Ce-Mujer group, the Women and Health Collective and the Citizens' Forum went to the Senate to hand in a memorandum requesting the resignation of the Chamber of Accounts. The groups accuse the CC of having lost credibility for the exercise of its functions. The document was signed by thirty civil society organizations and more than 170 individuals. The group disagrees with Presidential legal advisor Cesar Pina Toribio or the director of the Department for the Prevention of Corruption (DEPRECO) Octavio Lister, who both suggested pardoning the members of the Chamber of Accounts since they had "rectified their mistake in time."

Only 12 are accredited
Following yesterday's news about the astonishing number of consuls, vice-consuls and assistants earning salaries in the United States, investigative reporters Huchi Lora and Nuria Piera revealed that only 12 of the 182 appointees are actually accredited by the US State Department. The CDN Radio program that airs from 5 to 7pm on weekdays shocked its audience by revealing the salaries and the RD$40 million monthly budget for these 182 political appointees. According to the reporters, accreditation by the State Department follows Article 22 of the Vienna Convention, which says that, "citizens and legal residents of the United States cannot be accredited to serve as consular officials of a foreign government." A major problem was uncovered as former deputy minister for Foreign Relations and an expert on consular affairs, Jose Alejandro Ayuso called the program and told the reporters that any document or ceremony executed by a non-accredited "consul or vice-consul" was null and void. Obviously the ramifications of such a situation could be enormous, since vice-consuls regularly substitute for consuls and execute birth certificates, passports, marriages, and legalize documents. The seriousness of the situation is only emphasized by the fact that architect Eduardo Selman, the recently appointed Dominican consul in New York City, was not on the list of accredited officials. Selman could not be reached for comment.

Tourism arrival numbers slow a bit
Number of arrivals in the Dominican tourism industry slowed a bit in 2007, according to recently available Central Bank statistics for the first four months of the year. From January to April 2007, 1,510,341 tourists had arrived, compared to 1,488,912 for the same period in 2006. The stats show a 1.4% increase in the number of visitors. The Ministry of Tourism explains that the numbers in part reflect the switch to a predominant US market share of most resorts, and the effect of the new US passport requirement on last minute decisions of travelers. Airport closures due to storms also brought about many cancellations from US ports. Canadian arrivals were up 41,436 passengers for the period, while US arrivals declined 18,392 when compared to the same period in 2006. Travel from the UK, France and Germany is also reported down. This is explained by the reduction in long haul flights to the Americas in general from those countries. Regardless of the numbers, the DR tourism industry has never financially done better. Record real estate development sales, including the first Trump development that generated US$300 million when it was launched on the market in May, have produced major inflows of hard currency.

The minister is upset
Yesterday's Diario Libre revealed that Minister of Tourism Felix Jimenez was an interested party in the zoning code that governs construction along the Dominican east coast. The paper pointed out that Ministry of Tourism Resolution 154-04, emitted by Jimenez, descriminates on the density of hotel rooms per hectare. In the areas where the minister did not have any personal interests, there was a limit of between 25 and 40 rooms per hectare. In those areas where the minister did have interests, such as Stanza Mara and Pueblo Bavaro developments, the density was raised to 70 rooms per hectare. The areas not containing properties belonging to the minister are allowed an average of 37 rooms and the areas where the minister is involved are allowed 70 rooms. According to today's Diario Libre the minister was upset at the revelations and began calling the morning news shows at 5:30am yesterday, denouncing what he called a campaign by Diario Libre executives to discredit him. He admitted that he was the owner of properties that benefited from the decree but could not, according to the paper, explain the disparity. As reported by Diario Libre, the minister argued he had been a real estate developer for more than 30 years.

Now Almeyda looks to Ford
In another continuing saga, it appears that Interior and Police Minister Franklin Almeyda is going to seek direct assistance from the Ford Motor Company in Spain to solve the problem of the out-of-service police cars. The cars were purchased directly from Spain, by-passing the local Ford concessionary. The police vehicles are diesel models and the local Ford dealer only imports gasoline-engine cars. Almeyda is balking at paying the 5% concession fee the local dealer is asking as the price for servicing the vehicles. Almeyda says that he asked local exclusive Ford representative Viamar to service the vehicles on a pay-as-you-go basis, but Viamar wants its 5% fee, a total of US$59,250 up front. Minister Almeyda said that he would go directly to Ford for assistance if Viamar did not help. Another part of the story is that the minister is blaming the Chief of Police for the lack of maintenance, but the chief sidestepped questions from reporters, saying that patrols were working since there were no violent crimes over the past 24 hours.

Mortgages good for pension funds
If pension funds invested in mortgages they would be more profitable, according to a report in Hoy newspaper. The Superintendent of Banks told reporters that an investment in mortgages would increase the profitability of pension funds because mortgage paper could earn 9% versus the 1% to 5% earned on deposits in savings accounts in commercial banks. Rafael Camilo said that the superintendents of banks, pensions and stocks agreed that mortgages would guarantee the investments for the Social Security program. Due to a historical general distrust of the government's ability to pay, the different entities suggest the use of mortgage bonds as a way of guaranteeing the system's ability to pay its beneficiaries. However, the mortgages would be for state infrastructure projects, because confidence in the manner in which the government is operating the economy has increased, making the operation viable.

Legislators incensed over Puig
When Minister of the Environment Max Puig told reporters that legislators were fronting for special interest groups interested in obtaining over 35 square kilometers of beachfront property in La Altagracia Province, he apparently touched on some nerves. In yesterday's Diario Libre, Puig told reporters that legislators were involved. Today's edition of the paper says that that the news hit the Chamber of Deputies like "a bombshell", and chamber president Julio Cesar Valentin has asked Puig to reveal the names of the legislators involved in this attempt to appropriate part of the National Park of the East. Valentin said that, "we ask the Minister of the Environment to be responsible and identify those legislators, because his statements are in the press, and failing to clear this up would be an act of great irresponsibility." The legislator said that if Puig does not identify the legislators, he will "use his constitutional powers and summon the minister to his office in order to question him about the legislators' identity, in the presence of reporters." While admitting that the minister's statements were very serious, Valentin said that he did not know of any legislation currently before Congress that was addressing the issue of changes in the Protected Areas Act. Senate president Reinaldo Pared Perez called the statements "irresponsible and reckless." Pared Perez said that it would have been better to identify the individuals concerned in a more responsible manner.
According to Diario Libre, Puig said that he was prepared to present proof of the intentions to modify the Law on Protected Areas. "I would be happy to inform the president of the Senate if he invites me," said Puig.

Dominican dies in Iraq
Dominican born Junior Cedeno Sanchez, 20, has been reported dead in Iraq. He was killed by a dynamite explosion during a war mission. A graduate of the Puerto Rico Aviation Academy, he had been in Iraq for two months. The recent US Army recruit had spoken to his parents on the phone on Sunday. He resided in Fordham Road, The Bronx, New York and was an only child. His parents said that his death had wiped out half of their lives. As reported in Hoy, this death brings the number of US military personnel who have died in Iraq to 116 in May. Since the war began in 2003, 3,467 US servicemen and women have been killed. Cedeno Sanchez will be buried in the Dominican Republic.

Forty six years ago
On this date in 1961, members of Generalissimo Rafael Leonidas Trujillo y Molina's inner circle carried out their assassination plot, killing the dictator and ending his 30-year iron-fisted rule. With only two exceptions, all the men who were involved in the plot went on to be killed by Trujillo's sons or their accomplices. In many towns and cities, this date is commemorated as a holiday and traditional games are played in public parks. It is called "Independence Day" in the newspapers.

Rains damage bridges and homes
The intense rains affecting most of the region have damaged several bridges, killed at least one person and ruined hundreds of homes. The areas of La Vega, Bonao, Puerto Plata, Valverde, Cotui and Santiago have been worst affected. According to Listin Diario reporter Andres Vasquez, at least five bridges in the area around Cotui have been damaged. In Puerto Plata, all major rivers burst their banks and hundreds of houses were flooded. In La Vega, the bridge connecting the city with Villa Tapia was damaged, and in Moca, the village of Canca la Piedra lost the bridge that connects it with Tamboril in Santiago province. In Valverde, the bridges that cross the Amina and Mao rivers were damaged. The highway between Navarrete and Puerto Plata was closed to traffic due to landslides, but these were removed within a short period of time. Diario Libre reports that over the last 36 hours nearly six inches of rain fell along the north coast, and slightly less fell in the Cibao Valley. The floodgates of the Tavera Dam were opened to reduce the pressure on the dam. The floodgates were discharging 170 cubic meters of water per second, and the CDEEE, which had ordered the gates opened, forgot to tell the National Emergency Center.

Pan Am men's volleyball
The Juan Pablo Duarte Olympic Center Volleyball Pavilion will be hosting seven teams for the Second Men's Pan American Cup from 3-8 June. The tournament is a qualifier for the 2008 America's Cup in Brazil. Participating are Canada, Mexico and Puerto Rico in Pool A and Cuba, Panama, Trinidad & Tobago and host Dominican Republic in Pool B. The event is dedicated to Public Works Minister Freddy Perez who secured RD$2 million for the event. The event is part of the North, Central and Caribbean Volleyball Confederation circuit.
To follow the games, see http://www.norceca.org/endex.htm

Best of handball
The Pan-American Team Handball Federation, the Dominican Ministry of Sports and the Dominican Handball Federation are sponsoring the Pan American Championship Senior Women's Elite tournament from 31 May to 4 June 2007.
Playing in Group A are Argentina, Uruguay, Puerto Rico and the host Dominican Republic. Playing in Group B are Brazil, Canada, the USA and Paraguay. The top four teams will qualify for the 18th Women's World Handball Championship to be held in December in France after this competition. Jose Duval, president of the Dominican Handball Federation, is optimistic that the DR will be among the four qualifiers. The event begins this Thursday, 31 May at the handball pavilion at eastern Santo Domingo's Parque del Este sports center.
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