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Daily News - Thursday, 23 August 2007

Severance for government workers
President Leonel Fernandez has sent a bill to Congress that could considerably increase the cost of government. In an election year, President Fernandez is proposing that the government should pay severance when firing government employees. If passed by Congress, the proposed law would make it very expensive to dismiss any government workers. The number of government employees is considered to be more than three times what is actually needed. The general practice is for governments to add jobs, not to dismiss employees. As a result, there are thousands of opposition party members on the government payroll who would benefit from the situation. The bill establishes that in addition to severance, former workers would receive life and disability insurance. A limit of 12 monthly wages is set to the payments.
President Fernandez also sent a bill to Congress that aims to establish how a first half of the year tax surplus of RD$11.05 billion should be used.

Aggregate extraction ban maintained
Newly appointed Environment Minister Omar Ramirez said he will enforce Resolution 16-007 that bans the extraction of construction materials like sand and gravel from Dominican rivers. Ramirez was deputy minister in charge of planning under his predecessor Max Puig who was appointed environmental advisor to the President. Ramirez said that he took part in the decision to ban the practice. For years, environmentalists have been saying that extraction is drying out the country's rivers and affecting fresh water supply to the population.
Under the first Fernandez administration, Ramirez was director of the Parks Department, the Ministry of Environment's precursor.
He said that the Environmental Police chief has been sent to the Nizao River to evaluate the damage and stop further extraction work from taking place. Residents in the area have complained that extraction trucks are covertly operating at night.

RD$30 million for the Malecon
The Mayor of Santo Domingo, Roberto Salcedo says that according to preliminary estimates, RD$30 million will be needed to repair the damage caused to the city's seafront avenue, the Malecon, from the effects of Category 4 Hurricane Dean, that passed some 160 kms south of the coastline on the weekend. He said he is requesting this budget from the City Hall, and informed that municipal workers have now cleared the highway. The Mayor said that work will now resume with tree planting, and repairs to the sidewalks and benches and the park areas. He said that renovation of the parks along the Malecon should be completed by December. On Saturday, strong waves caused by Hurricane Dean hurled hundreds of tons of garbage, debris, rocks and sand onto the highway. Salcedo said that 3,000 municipal workers concentrated on clearing the area to restore traffic flow on the avenue by Monday.

Is Bengoa over-confident?
Hacienda Minister Vicente Bengoa says that there is no reason for the country to sign another agreement with the IMF after the current stand-by arrangement expires at the end of January 2008. Bengoa is quoted in Diario Libre as saying that the government is up to date with payments on the public, external and internal debts and that there will be a budget surplus this year. He added that the external debt as a percentage of the GDP was at 19.6% in June, down from 34.2% in 2004. He says that the internal public debt has declined to 2.1% of the GDP. In 2004 the internal public debt was 2.7% of the GDP and in 2000 it was 1.8%. As for the public sector deficit, the Minister says that it was 7.71% of the GDP in 2004 and in 2007 it is at 1.7% of the GDP. He says that preferential interest rates are at 11%. Active nominal interest rates are at 16.23% and passive nominal interest rates are at 7.35%. Mortgage rates are at 13.28%. The Minister says that vehicle imports have increased by 47.6% during the current administration, for an additional 70,000 vehicles. Bengoa added that international cash reserves could reach US$2 billion and the exchange rate has been stabilized.

ANJE criticizes lack of austerity
The Young Entrepreneurs Association (ANJE) says that the government hasn't fulfilled its promise to reduce expenses and control public spending. ANJE president Joel Santos said that the government is not following law 497-06 on austerity and is defaulting on its promise to reduce spending by RD$17.5 billion this year. Santos, quoted in Clave Digital, says that instead of replacing employees, the government has created new positions, adding to burgeoning expenses. Santos also points out that the government hasn't reduced public officials' cell phone use, salaries or expenses. In fact Santos says that costs have increased by 14.5%, RD$11.5 billion, in the first seven months of the year in comparison to the same period in 2006 when costs were at RD$9.34 billion. He says payroll payment has increased by RD$1.3 billion, for a 5.8% increase and that non-staff services have increased by RD$881.4 million, for a 13.7% increase.
Santos said that ANJE has been monitoring government spending closely since January 2007. Yesterday, speaking on the Nuria and Huchi CDN Radio afternoon talk show, Santos predicted that government spending could get worse since the controls that come with the country having an IMF arrangement may be relaxed now that the government has decided to work without IMF surveillance as of February 2008. Santos explained that since there will be no agreement next year, the results of the year's end IMF review are meaningless and the government could have already stepped up spending.
Santos explained that the increases in government subsidies and the payroll are more significant because the base level at the start of 2007 was already too high.

Exports up
Exports from June 2006-May 2007 show a 55.22% increase over the previous year, according to a report released by the Dominican Center for Export and Investment (CEI-RD). The most commonly exported products are minerals, mainly ferronickel, with an 88.86% increase, while non-traditional (agro-industrial, craft, etc.) products increased by 21.73%, putting them in second place. Ranked third were traditional commodities like sugar, tobacco and coffee, with a 14.4% increase.
Most Dominican exports go to the United States, with a relative increase of 59.59% over last year. In second place is Holland, while exports to Belgium, Japan, Costa Rica and Russia are also substantial. According to the report, the Dominican Republic has shown positive export growth in relation to the United Kingdom, Spain and Jamaica, while negative growth was reported with South Korea, Haiti and Puerto Rico.
www.dr1.com/trade/documents/exportsfirsthalf2007[1].pdf

Half-year Central Bank report
According to the Central Bank the Dominican economy remained stable showing a 7.9% increase during the first six months of the year. The CB's report provides details of agriculture (2.6%), mining (1.4%), local manufacturing (0.3%), free trade zones (-11.3%) construction (-0.3%), financial services (48.0%), communications (18.6%), commerce (14.0%), energy and water (9.8%), hotels, bars and restaurants (6.6%), transport (6.3%), housing rentals (3.7%), public administration (1.6%), education (4.0%), health (3.0%) and other activities (6.7%). The GDP experienced a 14.3% growth while accumulated inflation was at 4.38%. The report indicates that sales of consumer goods increased by 33% and raw materials sales increased by 10%. The growth in the economy is due in part to the 65.1% increase in exports. www.dr1.com/trade/documents/Informe BC-2[1].doc

DR loses apparel market share
The DR's market share of total clothing exports to the US decreased by 1.7% in the first semester of this year from 2.4% for the same period in 2006, as reported in Hoy. This reduction is due partly to the increase in Chinese, Indonesian and Vietnamese exports to the US. China increased its apparel exports to 27.5%, up from 19.6%, to the US. Indonesia increased its share to 6.0%, up from 5.3% and Vietnam went from 4.7% to 5.3%. Since the elimination of tariffs for Asian exporters, the DR has faced stiff export competition and this explains the 15.1% reduction of apparel exports to the US between January and June 2007, in comparison to the same six-month period in 2006. This however is a continuous trend as apparel exports for the first six months of 2006 compared to the first six months of 2005 decreased by 14.3%. Dominican textile exports decreased by a value of US$701.6 million in the first six months of the year. Apparel exports were valued at US$825.9 million in 2006 and US$963.5 million in 2005.

It pays to be a legislator
It pays to be a legislator, in the DR, anyway. Diario Libre writes that Dominican legislators have higher salaries than legislators in Brazil, Chile, Colombia and Mexico and compete with the salaries of legislators in Europe, who are among the world's highest paid.
Congressmen receive a basic wage of RD$125,000, RD$50,000 in expenses, RD$25,000 for expenses and a RD$3,500 per diem every time they attend a session, for about RD$203,500 a month, or US$6,166 a month. But to that, one must add the RD$400,000 to RD$900,000 (US$12,000-US$27,000) provincial fund over which they have discretionary power. This brings wages from US$18,000 to US$33,000. The legislators are considering giving themselves a 100% wage increase, to bring their basic salary to RD$250,000 a month, more in line with high-ranking officials' salaries in the Fernandez government.
The numbers could be even higher. Clave Digital notes that in addition, senators have access to a Senate Budgetary Allocation Fund (Fondo de las Asignaciones Presupuestales del Senado) that provides them with RD$25,000 for an image advisor, RD$60,000 for assistants, RD$30,000 for a secretary, RD$15,000 for an assistant secretary, RD$10,000 for a messenger, RD$15,000 for two drivers, RD$45,000 for a project advisor, RD$37,000 for four security staff, for a total additional allocation of RD$371,000 a month per senator.
Diario Libre points out that according to a recent report in Spanish newspaper El Mundo, an Italian legislator makes EUR12,000 plus benefits for a monthly EUR25,000. Spanish legislators receive US$6,400 a month, including benefits. In Brazil, legislators earn US$11,448 a month. In Chile, the wage is US$7,568 and in Colombia it is US$7,600 a month.

Political musical chairs pt. II
The new round of government appointments continued on Wednesday as President Leonel Fernandez appointed Major General Vinicio Adolfo Hernandez Mendez as director of Police internal affairs, replacing Major General Daysi Antonia Liriano Paulino. Retired Major General Raul Almonte Lluberes was appointed director of the National Police reserves, replacing Brigade General Guarionex Duval Feliz.
He also appointed Julio Cesar Arias Mota as deputy minister of Labor. Arias Mota served as prosecutor and a PRD deputy with links to the party's Rafael Subervi Bonilla faction.
President Fernandez also appointed former director of the Santo Domingo Water Corporation (CAASD), Richard Martinez as the Executive Branch advisor on potable water and the Presidency's environment cabinet coordinator.

Second round needed?
The most recent opinion poll results show that there will be a need for a second round in next year's presidential election, as none of the candidates are showing a strong enough standing. The 9-13 August Gallup poll published in Hoy reveals that President Leonel Fernandez (PLD) would be the winner in the second round. 47% of Dominicans eligible to vote would favor Fernandez, compared to 39.3% for Miguel Vargas Maldonado (PRD). According to the poll, if the election were to be held today, none of the presidential candidates would obtain the minimum 50%+1 vote needed to win in a first round. President Fernandez would receive 42.3%, Vargas Maldonado 35.3% and Aristy Castro 14.1%.
Fernandez has stronger support in the prosperous tourism region of the east with 43%, and the metropolitan (Santo Domingo) area with 41.7%. Meanwhile, Vargas Maldonado's strongest support is in the north with 32% and the southwestern region with 29%. Aristy has 19% support in the east, where his daughter is mayor of Higuey and for years he has been elected senator of the province, only to subsequently turn down the position to occupy his present post at the helm of the Dominican Municipal League.
1,200 Dominicans took part in the poll that has a 2.8% margin of error.
When asked who would be the next President, 43.8% responded President Leonel Fernandez, 28.6% responded Vargas Maldonado, and 10.1% responded Aristy Castro.
Interestingly, 54% of voters polled considered it possible that one of the candidates could win in a first round, while 33% do not think so. When voters were subsequently asked which candidate could win in a first round, 49.4% responded Fernandez, 36% Vargas Maldonado and 9% Aristy Castro.

The sad side of re-election
In an article in Clave Digital, former rector of INTEC University Rafael Toribio speculates that the recent changes in the cabinet, which he says most of the population received with surprise and indignation, are moves that could end up losing more votes than they would gain for President Leonel Fernandez, who seeks to be reelected in the May 2008 election. He says the government had been urged to make changes in order to breathe new life into government, and especially since several officials had been strongly criticized for their performance, in some cases for serious conflicts of interest.
"The appointment of new faces to the government team was suggested to give the feeling that there would not be more of the same in the new government once reelected," he writes. He continues, "But no. Instead of replacing his close allies, he rotated them and the new ones are well-known old faces whose loyalty could be bought. The opportunity is instead used to prove adherence to clientelism and primitive and denigrating political electioneering, both for whoever offers and whoever takes.
"Instead of a cabinet that will put the government back on track, what has been put together is a sort of Re-election Front, based in the Presidential Palace, which is also in charge of managing government.
"All this amidst the repeated insistence that we are immersed in a democratic revolution that consists of institutional strengthening, a rational, efficient and modern state, when instead we are increasing the government payroll, paying for eventual political loyalties with a government job, favoring political leaders with no-one to lead.
"While there is talk of rationality and modernity, the state is Balkanized handing over parts of it to political defectors, who will administer it for their own benefit and for their followers, in exchange for supporting re-election.
"Do these appointments add or subtract? Those appointed will add little, because they have never had many followers. The percentage of citizens that is not committed to a party, which grows larger by the day, and which uses its vote to reward or punish actions and behaviors, I do not believe can be satisfied with these appointments. And I think neither can be many in the PLD party, whether they are in the government or not.
"Unfortunately for the country, for the PLD and even for the President, we will have to continue watching and putting up with more decisions like these. They are contradictions on the road to re-election.
"If that is what 'e palante que vamos' (we are going forward) means, how unfortunate!"

Abortion stirs strong feelings
In the second and final public forum held in Congress, opponents and supporters of legalizing abortion have voiced their opinions. Of the 127 scheduled to speak, only 50 got the chance but there was no shortage of passion. Diario Libre writes that Jose Ricardo Taveras, who heads the committee that studied the proposal, had to intervene several times in order to take control of the heated debate at the National Assembly Hall. Gynecologist Lilliam Fondeur argued that abortion should be legal during the first 90 days of pregnancy when the mother's life is in danger or if the pregnancy is the result of rape or incest. Writer and campaigner Chiqui Vicioso said that the abortion issue is riddled with class and racial discrimination because most of the women affected are poor and black. She called for men to be more responsible. The Catholic Church, represented by father Luis Rosario, maintained its traditional anti-abortion stance. Rosario said that he is against the legalization of abortion, regardless of the way that some have disguised it.

Truck driver survives
Truck driver Armando Concepcion Guzman survived a horrific accident yesterday after his truck flipped over and fell off the side of the Juan Pablo Duarte Bridge. There were no injuries as a result of the accident and Concepcion was only treated for minor scrapes and bruises. The accident led to traffic jams on the bridge and onlookers said that the cause of the crash wasn't mechanical failure, but Concepcion's bad driving.

Fishermens' bodies recovered
Rescue crews have recovered the missing two bodies of five men who drowned when their boat capsized after they chose to go fishing on Sunday in the lake at the Tavera Dam, despite the nationwide hurricane warning. The fishermen were from Santiago province. Three men survived the accident. Boat captain Danilo Antonio Valdez, one of the survivors, said that a strong rain shower accompanied by strong winds fell suddenly, resulting in the boat capsizing. He said that the men who survived did so because they were good swimmers. Ten teams of divers worked on this dramatic operation. Another man died when he was swept away by a wave after getting dangerously close to the shore on the Las Americas Highway when spectacular waves were hitting the coastline, bringing the total DR death toll to six as a result of Hurricane Dean, which passed about 160 kms south of the DR.

Censorship might be an option
Dominican rappers El Lapiz and Jo-A have come out in defense of their musical genre after the National Drug Control Department (DNCD) and the Attorney General's office announced that they have joined forces in an attempt to ban reggaeton music dealing with drug-related themes. These organizations, along with the National Drug Council and the Children and Young People's Advisor at the Attorney General's office want reggaetton with lyrics that encourage drug taking to be censored. El Lapiz, the most popular Dominican rapper of the moment, says that artists are singing against drug use, not promoting it, and says that if they have offended anyone they will try to raise the standards of their lyrics. Radio DJ Raffy El Negro says that the whole genre shouldn't be banned but that songs about drugs should be removed from the airwaves, while good songs should be allowed airtime.
 
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