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Daily News - Friday, 24 August 2007

License plate hike dropped
President Leonel Fernandez has instructed Treasury Minister Vicente Bengoa and Tax Department director Juan Hernandez to suspend the application of new rates for license plate renewals on the grounds that Dominicans should not be burdened with more taxes. Fernandez says that he will submit a bill to Congress to modify Article 9 of Law 241-67 on Motor Vehicle Transit, which establishes the license plate taxes for vehicles. The government apparently now recognizes that only Congress can decide on new taxes. The increases had been disputed by the very influential passenger transport and cargo transport associations who refused to pay the new rates.
Transport union leaders Juan Hubieres of Fenatrano and Ramon Perez Figuereo of CNTU welcomed the President's decision, while commenting that the move was more to do with pre-electoral campaigning than genuine social policy. Earlier this week a Hoy-Gallup poll revealed that large percentage of Dominicans are unhappy with Fernandez's recent performance.
Diario Libre says that Dominicans will welcome the decision, while observing that it reveals that the government is improvising. "The same day, after distributing thousands of copies of a booklet explaining the new taxes, the government revokes the measure," writes the editorial. "It is impossible to separate the measure from President Fernandez's re-election efforts, but it is matter of concern that so many risky stances are being taken for the sake of the President's image of discipline, in a single week, during which the surprises have come one after another. The measure, without doubt, will be well received, but the possible interpretations make us worry," states the newspaper.
The government also announced that it would not allow insurance companies to apply the 30% increase on semi and full coverage vehicular insurance policies. The position of the insurance companies is that the government only regulates the price of the basic legal insurance

We're the reason for stability
Economic, Planning and Development Minister Temistocles Montas says that the government guarantees the country's economic stability even without the International Monetary Fund's interference. Montas says that economic stability has always been the hallmark of the current government. Bengoa said that during Fernandez's first presidency the PLD was characterized by stability even though there was no IMF agreement during that period.
Speaking at a press conference, the government's economic team said that President Leonel Fernandez is the only person who will decide whether or not to sign another agreement with the IMF. Montas said the President has yet to meet with the team to discuss the issue. Yesterday Vicente Bengoa, Treasury Minister, said that the country did not need another IMF agreement.

Not another Verizon
Treasury Minster Vicente Bengoa is warning that any group interested in buying Shell's shares in the Dominican Petroleum Refinery (REFIDOMSA) will have to pay capital gains tax. Bengoa said that he is warning any potential buyers to avoid a repetition of the impasse with Verizon when the telecommunications company was sold to a Mexican telecommunications group. Capital gains tax is levied on the difference between what the company was bought for and what it was sold for.

Jose Tomas back in the mix
Former presidential hopeful Jose Tomas Perez is back on the scene after being appointed director general of the Dominican Civil Aviation Institute (IDAC). Perez replaces Norge Botello, who was designated Minster without Portfolio. A former senator for Santo Domingo, Perez dropped out of the race for the PLD presidential candidacy to support President Leonel Fernandez.

Slow going for SFS
Employers have been slow going in paying the contributions to the government's new health plan, the SFS, which is due to go into effect on 1 September. According to Law 87-01 employers have until 5 September to make the payments towards the new insurance plan. Companies need to pay 6.67% of wages into the plan, and employees will see deductions of 2.86% of their wages. There are currently 1,040,000 companies affiliated to the SFS, which will cover 2.4 million people.
Vice President Rafael Alburquerque, in today's Hoy, gave an absolute guarantee the SFS will go into effect on 1 September. The plan provides extensive coverage for hundreds of thousands of Dominican workers and their families.

Flour mill buyout proposed
The private sector owners of the flour mill on the banks of the Ozama River have made a purchase offer for the government's 50% stake in the business. This news was revealed to El Caribe by Vinicio Mella, the president of Molinos de Ozama board of directors. According to Mella, the mill needs to inject hundreds of millions of pesos in new infrastructure and equipment in order to keep its stake in the local and export markets. Mella said that the government is not currently in a position to provide the cash due to its social commitments in other areas. The mill exports flour to Haiti and Puerto Rico. The offer to purchase the government's shares was made by Dionisio Gutierrez, the president of the Corporacion Multi-Inversiones, Molinos de Ozama's parent company.

Sugar quota brief correction
DR1 News erroneously reported on 21 August that the DR would be able to export sugar to the US with relatively low tariffs following a recent increase in the sugar export quota, as reported in Listin Diario. The US Trade Representative Office (USTR) increased the DR's sugar export quota to 185,335 metric tons per year. This came as the USTR designated sugar quotas for 40 countries for the 2008 fiscal year, which begins on 1 October. Listin Diario reports that the DR and Brazil were the countries that received the highest preferential quotas. Robin Johnson, of Balch & Bingham, LLP, corrected the report indicating that all raw sugar exported from the DR to the US is duty-free under the DR-CAFTA agreement. He explains that before DR-CAFTA went into force this year, all Dominican raw sugar exports were already duty-free under the Caribbean Basin Initiative that went into effect in 1983. The Dominican Republic has had the largest share of the US quota since restrictive country-by-country quotas were imposed in 1982. Johnson is the Dominican sugar industry's legal adviser in Washington DC and has been working with Dominican sugar producers for almost 30 years.

Richard Bernal bullish on EPA
Caribbean trade negotiator Richard Bernal praised Dominican-side negotiations leading into the Economic Partnership Agreement the Caribbean would sign with Europe. "The Dominican Republic is up to speed with its commitments, has participated fully and is not one of the countries that is still working on completing their tariff proposal," said the director general of the Caribbean Regional Negotiating Machinery.
The region needs to unify tariffs and complete negotiations for rum and sugar schemes in time for the year's end deadline when preferential treatment under the Cotonou Agreement runs out.
"If negotiations leading to the EPA aren't completed by December, Bernal says the Caribbean would be left with the less advantageous regime of the Generalized System of Preferences that also benefits many strong competitors.
According to Bernal, the smaller countries might have a tougher time changing their stance on things since they feel they have "more" to lose. "It is a sense of vulnerability that drives opposition, but the EPA's are looking to tackle that issue head on," he says.
He believes the negotiations will try to get the best deals for all countries involved.
He explained that the delays have been that most Caricom nations don't have or are only recently creating tax structures so that income sales taxation would bring in most revenues, as is the case in the Dominican Republic already.

DR supports Taiwan
Yesterday the DR and the Central American countries supported Taiwan's bid to re-enter the United Nations. Taiwan was kicked out of the UN in 1971 after continued pressure from China. Costa Rica was the only Central American country not present, as it has broken off ties with Taiwan and chosen to initiate ties with mainland China. Although the Central American Presidents attended the meeting, President Leonel Fernandez was unable to make the trip and Clara Quinones from the Ministry of Foreign Relations went on his behalf.
The decision was announced after a five-hour meeting between Taiwanese President Chen Shui-bian and leaders from the region. In return for its recognition as a sovereign nation, and supporting its bid for re-entering the UN, Taiwan has expressed willingness to provide assistance for Central America and the DR. Talks of a free trade agreement between the DR and Taiwan are ongoing. Currently only 25 countries recognize Taiwan's status as an independent nation.

DR enters FEALAC
The DR has joined the Forum for East Asian-Latin American Cooperation (FEALAC), an interregional organization with the unanimous vote of 33 member countries in Brasilia. Foreign Minister Carlos Morales Troncoso represented the DR. Speaking about the role of FEALAC in boosting fledgling trade ties and building links between the far-flung regions, Japanese Foreign Minister Taro Aso said FEALAC would be "the greatest ocean-connecting bridge."
"Our two-way trade is now 3.5 times as big as it was in 1998, from US$53 billion to 183," he said. "The canals connecting the two oceans, both wet and dry, must be made broader."
South Korean Trade Minister Kim Jong-Hoon said "there is synergy between our two regions." He said that at the moment Latin America accounted for "only 3.0 percent of the total amount of East Asia trade with the entire world. Seen from Latin America, the corresponding figure is a mere 9.6 percent."
The East Asian members of the bloc are: Australia, Brunei, Cambodia, China, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, Thailand and Vietnam. The Latin America members are: Argentina, Bolivia, Brazil, Colombia, Costa Rica, Cuba, Chile, Ecuador, El Salvador, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela and now the Dominican Republic.

US honors military attache
The United States government has awarded Major General Hugo Rafael Gonzalez Borrell with the Legion of Merit medal, degree of Officer, for years of service (July 2003 to November 2006) as Dominican defense attache in Washington, D.C. Roland Bullen, acting US ambassador, gave Gonzalez the medal in a ceremony led by Minister of the Armed Forces, Lt. General Ramon Antonio Garcia Aquino. Gonzalez Borrell was honored for his meritorious efforts to strengthen mutual cooperation and relations between the US and the DR.

Fourth candidate is possible
Hoy continues to report the findings of the 9-13 August Gallup poll. Apparently, 47% of Dominicans feel that a fourth candidate could be attractive for voters. The so-called Cuarta Via (Fourth Way) candidate was proposed to consolidate runner-up candidates from the PLD, PRD and PRSC. PRSD president Hatuey Decamps made the proposal after a meeting with Danilo Medina, Eduardo Estrella and Milagros Ortiz Bosch. All three have been keeping a low profile after having lost their primaries.
The Gallup-Hoy poll also asked that if a new candidate were to enter the mix, who should it be. 21.3% would prefer Estrella, 19.8% prefer Medina, 15.7% prefer Ortiz Bosch, 11.8% favor Pedro de Jesus Candelier and 3.8% Decamps. 17% are undecided.

Dominicans really not happy
According to a Gallup-Hoy poll, 57% of Dominicans would leave the country to live and work elsewhere if they had the chance. This percentage increases to 60% in the southern and eastern parts of the DR.
Only 45% of Dominicans feel they are better off than their parents, 23% feel they live in the same conditions and 27% feel they are worse off than their parents.
The poll also showed that 55% of Dominicans feel they are poor while 27% feel they are middle-poor class and 15.5% feel they are middle class. Only 2% considered themselves middle high class and less than 1% considered themselves high class.
Racially speaking, 55% Dominicans considered themselves to be "Indio" while 16% considered themselves to be mulatto and 12% considered themselves white. And only about 12.5% of the population considered themselves black except for those located in the eastern part of the country where 37.5% of those polled viewed themselves as black.
The Dominican ID card no longer specifies the holder's race, and ethnicity is not a requirement on most official documents.

DNCD tests itself
The National Drug Control Department (DNCD) carried out surprise drug testing for about 1,000 of its own personnel yesterday, as reported in Hoy. DNCD head Major General Radhames Ramirez Ferreira says that regardless whether the DNCD employee is a civilian or a member of the armed forces, or from a high or low rank, if they are found to have tested positive they will be expelled from the department.
In other news Ramirez clarified that the DNCD doesn't want to censor or remove the whole reggaetton genre from the airwaves, only songs that promote drug use. He says he is only fighting against performers who sing about doing illegal things. He plans to meet with radio company heads to select the songs that could have a negative effect on young people.
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