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Daily News - Wednesday, 29 August 2007

Tech centers opened in VA and Santiago
President Leonel Fernandez and First Lady Margarita Cedeno spent most of yesterday performing inaugurations and cutting ribbons. In Villa Altagracia (VA) and Santiago, the First Family inaugurated two hi-tech community centers that will provide Internet access to large sections of the population. Called Community Technological Centers (CTS), each one has 30 computer terminals that are free for the public. These two new CTSs bring to 42 the number of these centers created by the First Lady's Office. According to Hoy, the new centers cost RD$25 million. According to First Lady Margarita Cedeno, the centers are part of a governmental plan to "give equal access to educational opportunities as well as entertainment". She continued by saying that each computer terminal can become a classroom for each student, depending on interests and needs. Margarita Cedeno de Fernandez reminded the students attending the ceremonies that basic levels of education were available on-line, and a virtual high school program was also available for what she termed "bachinet", a play on the Spanish words for high school graduate and the Internet. Degrees earned on the Internet within the government's programs will receive certificates from the Ministry of Education.
While in Santiago, President Leonel Fernandez headed the inauguration ceremony for the new Multiuse Building on the PUCMM main campus in Santiago. The huge structure, built at a cost of RD$208 million, was financed by the university, the private sector and the government. During his keynote speech, the President highlighted the government's debt load as a major roadblock for more government investment in education. The presidential speech was titled "Digital revolution, the basis of the new education". Fernandez denied that his government was responsible for the massive public debt. He said that the national strategy for being competitive enables the nation to assist Haiti, since the DR cannot progress if Haiti is ever mired in poverty. He talked about the reactivation of the industrial free zones and reported that three such companies that had moved to China have announced that they are returning to the Dominican Republic.

Private sector and education
Seven important private sector groups have released a document that takes a long hard look at Dominican education. The consensus is that the deficiency in the national educational system is the country's greatest problem. The seven associations pledged to join forces to tackle it. The National Council of Private Business (CONEP), the American Chamber of Commerce (AmCham), the United States Agency for International Development (USAID), the Young Entrepreneurs Association (ANJE), the Pontifical Catholic University Madre y Maestra (PUCMM), the group Action for Basic Education (EDUCA) and the Foundation for Institutionalism and Justice (FINJUS) have announced the celebration of a "Business Forum for Quality Education" to be held on 4 September. The idea is to create a social pact in which the private sector will get involved in improving the Dominican educational system. Their press release says that the group will also provide follow-up on the conclusions that were reached during the Presidential Forum for Educational Excellence that was held at the beginning of the year. According to the CONEP's Lisandro Macarrulla, the group will work closely with governmental institutions including the Ministry of Education and INFOTEP as well as international agencies. Christopher Paniagua, the AmCham president, told reporters that most private companies feel that the only way to successfully enter the global marketplace is to strengthen basic education.

Dominican textiles most hurt
While textile exports from other Central American nations have fallen, none has seen the decrease suffered by the Dominican Republic, as reported in Diario Libre. Both the total value and the overall volume have been reduced in the face of the new global realities. Of the five Central American nations, only two, Guatemala and Costa Rica, saw their textile exports drop by 8.3% and 3.7% respectively. In contrast, the situation is much more serious in the Dominican Republic. Exports fell by 24% in the DR, while they grew from 5.4% to 22.2% in countries like Honduras, El Salvador, Haiti and Nicaragua. The figures published by the Dominican Central Bank show that the DR was the most prejudiced nation as a result of the reduced demand for textiles from United States buyers. Local manufacturers told Diario Libre that the lack of competitiveness, caused by the appreciation of the Dominican peso against the US dollar is the principal cause of the current situation.

SFS is OK-ed, sort of
The Family Health Insurance Plan (SFS) got the "go ahead" from the Dominican Medical Association (CMD) and the National Association of Private Clinics despite several unresolved issues. According to Diario Libre, the medical laboratories are still at odds with the government and are waiting their turn to present their proposals for payment for laboratory services. Vice President Rafael Alburquerque and his commission still have to meet with the doctors to discuss the fees for hospital visits and follow-up treatments, which must be guaranteed to be no lower than those contained in the Sisalril agreement. Sisalril is the Superintendent of Workers' Health Risks. CMD president Dr. Enriquillo Matos told the reporters that doctors were free to take part or opt out of the program. The medical laboratories are complaining that the tariffs proposed by the HMOs are at least "50% below those proposed and approved by Sisalril.
Meanwhile, there is the concern that many are being left out of the nationwide health plan. Superintendent of Health, Fernando Caamano, estimates that as many as 700,000 people, including heads of households and their dependents, will be left out of the National Family Health Plan (SFS) simply because they are not registered at the Social Security treasury office. According to Caamano, generally speaking, a lack of documents, or changes in jobs or a reduction in the coverage of the different health plans (AFS) are the causes for leaving so many people without coverage. The superintendent told reporters from Hoy that the list will be reviewed over time and that people with jobs would be inserted into the program.

Changes in transport directors
President Leonel Fernandez has appointed Franklin Beltre Cabral to replace German Pena Guadalupe at the Land Transport Office (OTTT). He also appointed engineer Pedro Diaz Paniagua to head the new Fondo de Desarrollo del Transporte Terrestre (FONDET), the Fernandez administration's transporter assistance fund, which has been dubbed Plan Renove II. Diaz, the former executive director, now replaces Milciades Perez Polanco. Transport is being reorganized with directives issued by the Office for the Reorganization of Transport (OPRET), under engineer Diandino Pena. OPRET is also responsible for the construction of the first metro line.

Bernardo Vega criticizes government
Interviewed on Channel 11 TV's El Telematutino program yesterday, economist Bernardo Vega criticized what he described as excessive governmental spending. He said that President Leonel Fernandez has followed his predecessor, President Hipolito Mejia's example. He addressed the increased the public payroll and spending despite President Leonel Fernandez having told the nation in his inaugural speech that he would apply austerity.
Vega said that while the government has improved its revenue collection mechanisms, "what it is not doing is spending it well," as reported in Hoy. He commented that no one in the PLD administration remembers the example of austerity set by party founder Juan Bosch. He said that the day after Bosch was sworn in, he fired several government workers, and served coconut water instead of expensive beverages in the Presidential Palace.
Vega expressed disappointment at the fact that public investment is focused on non-priority works such as the Santo Domingo metro instead of small projects needed by communities.
He recommended that the government enter into a "shadow program" with the IMF, which does not include financing, and thus does not impose strict conditions.
Vega says that the Dominican tax system is regressive, and the poor pay relatively more taxes on their income compared to the rich. For instance, he mentioned that under Law 158-01, if someone purchases a tourism property and sells it two years later, even if they doubled their income, they do not have to pay taxes. On the other hand, most consumer goods are taxed a hefty 16%.
Vega forecasts a high abstention rate in the 2008 presidential election. He says the candidates' lack of political programs make the election less attractive to non-partisan voters. He forecast, nevertheless, that lots of money would be spent on the campaign, which he described as insipid. He predicted that the vote would go for Fernandez because the alternative he considers very bad.
Vega said that the PLD decision to attract second and third party leaders to the reelection cause creates the impression that the government is desperate for votes and that the quality of government is deteriorating. He believes the government loses more votes than it gains with the move. He commented that the people would like there to be a change in the quality of government officials, but this was not achieved with the changes. "On the contrary," he said. He singled out the case of former Environment Minister Max Puig. "What a way to reward the one who fought for the national interest!"

War on corruption
A group of civil society organizations have begun a campaign to engage citizens about the need to fight corruption. Rafael Madera, spokesman for the group, said yesterday that their campaign focuses on large and small-scale corruption. He said that studies carried out show that small-scale corruption cost Dominicans RD$6.2 billion in 2006. Madera said that corruption has become an obstacle to the country's development.
For activities organized by the group, see www.lalucha.com.do

Political prostitution
Temple University professor Rosario Espinal analyzes the changes in Dominican electioneering in Hoy today. She says that in politics there is always the big risk that pragmatism will annihilate idealism. She says that the PLD is now on this road, the same way as the PRD in the 80s, when it abandoned its democratic ideals without apologizing to the people. She says that the notion of party-market reached its maximum expression in 2000-2004 when Hipolito Mejia distributed government funds to lure his principal opponents.
"In recent days, the new appointments confirm that the pragmatism of profiteering is the ideology that guides political decisions as politicians from big and small opposition parties have been appointed to government. "Partycracy reigns and political prostitution proliferates," she writes in Hoy.
She speculates that the appointment of the small party leaders is a move to impede that a Fourth Way option, where a fourth candidate would garner sympathies of voters without allegiances to the PLD, PRD and PRSC candidates, could come forth. She also explains that the appointments are a message to all Dominican politicians that the doors of government are open to everyone who wants to support Fernandez's reelection. The downside of the strategy is that sectors that had hoped for an improvement in government with the appointment of outstanding officials were left waiting and could no longer support the PLD. But then she says that discontented voters are unlikely to vote for the PRD or PRSC candidates. "Many will abstain, and their discontent will not damage the PLD in the polls," she concludes.
"It is very probable that those pragmatic calculations are behind the recent appointments, which could lead to electoral gains. But with these acts, the PLD confirms that it is using a strong pesticide to eliminate the idealism that created the party. Maybe when they want to retake their political ideals it will be to late to convince a battered population, which is what happened with the PRD. We understand that politics is a struggle for power. But there are many ways to secure this, some more worthy of praise than others," she concludes.

JCE tells generals to put up or shut up
The chief magistrate of the Central Electoral Board, Julio Cesar Castanos Guzman, has asked the group of high ranking former officers of the Dominican Armed Forces to provide evidence that the government is planning to commit fraudulent acts during the upcoming elections. Castanos Guzman also predicted that the complaint filed by the Dominican Revolutionary Party (PRD) before the Organization of American States (OAS) will not prosper. The chief magistrate guaranteed clean elections and reassured the local reporters that the JCE is always on the lookout for possible problems. Castanos Guzman said, "I would appreciate that anyone who makes an accusation such as this, has to give proof, because making accusations without proof hurts the Dominican democratic process".

Codetel president interview
Oscar Pena Chacon, the new chief executive of the largest Dominican telecommunications company, Codetel, has praised the business climate in the DR and announced that this year the company would be investing US$250 million, in their first year of their operation of the former Verizon operation. As reported in El Caribe, the company is investing in new infrastructure technology and expansion of its fixed and mobile lines nationwide. They are also working to expand their broadband internet services and optical fiber installations.
Codetel said that the company continues to be the national leader in telecommunications, with 50% market share in mobile phones and 75% of the fixed lines. The company's goal is to increase its market share to 80% in the next few years. The DR has 750,000 fixed line clients and 2.5 million cell phone clients.
Pena, nevertheless, said the country needs to advance in strengthening its institutions and legal system. He complained about the major losses the company has suffered due to thefts of fuel and cabling. He estimated losses in fuel at RD$10 million, with some 400 cases. He said that cases of theft have increased since 2004. Regarding cables, he said the company has suffered more than RD$45 million in losses. He said the level of theft had reached alarming levels. The theft of fuel occurs from the 600 telephone stations they have nationwide, that have been robbed for resale of the fuel.
Pena also criticized the high taxes on telecom services. At present, telecom services are taxed: 16% VAT (ITBIS), 10% Selective Tax on Consumption, 2% Tax to Telecom Development, for a total of 28%, which ranks it third in companies paying taxes for telecom, behind Brazil and Argentina. He backs the proposal from Indotel that suggests that the government should gradually reduce the Selective Tax on Consumption. He understands that telecom services are the nervous system of an economy, and if this is made more accessible it will operate better. Pena said that last year they paid RD$8 billion to the government in direct and indirect taxes.

Inexhaustible but not clicking
In a 13 August release, TiVo says that the Dominican Republic Tourism brand has distinguished itself for making the TiVo Stop||Watch Commercial Rankings in the "Least Fast-Forwarded" list on multiple occasions. The DR made the top 5 of the list in May and again in June for its "inexhaustible" campaign. In the more recent June ranking, the DR tourism brand placed 2nd in the Least Fast-Forwarded category.
The Ministry of Tourism recently published it has spent US$60 million to advertise the Dominican brand abroad in the past three years.
TiVo follows advertisements on networks, daytime and primetime to measure viewership.
TiVo is the creator of and a leader in advertising solutions and television services for digital video recorders. Other categories tracked are Total Viewing of Top Programs, Timeshifted Commercials compared with Timeshifted Programs.
See http://investor.tivo.com/releasedetail.cfm?ReleaseID=259351

Cigar tax case makes Chicago Tribune
Today's Chicago Tribune focuses on how thousands of jobs are at risk in the DR because of US legislation that will hike taxes on cigars to help fund an expansion of children's health insurance. The newspaper explains that a US$10 cigar would pay US$3 under the Senate bill. Producers in the DR, Nicaragua and Honduras are concerned that the 30 to 40% price hikes would be devastating, because many consumers would simply stop buying cigars.
As reported, the US bill would primarily affect the DR, which sends about 55% of all imported cigars to the US. The newspaper explains that when Congress reconvenes in September, it will try to reconcile House and Senate versions that aim to extend the State Children's Health Insurance Program. The House bill is more favorable to the tobacco industry, capping the tax at US$1 for each cigar.

Closing arguments for Baninter
Prosecutor Francisco Garcia began to present the closing arguments for the state yesterday, representing the Superintendence of Banks and the Central Bank lawyers versus collapsed bank Baninter. Accusations and proof against Ramon Baez Figueroa, Marcos Baez Cocco, Vivian Lubrano, Jesus Maria Troncoso Ferrua and Luis Alvarez Renta were outlined in the first day of closing arguments from 10am to 7pm on Tuesday. The case is based on a Central Bank statement issued on 13 May 2003 whereby Baninter was found to have RD$55 billion worth of irregular or fraudulent operations. The accused are being tried for hiding operations and documents, altering documents and abuse of confidence. The prosecutor presented 14 cases related to the use of funds for bank president Ramon Baez Figueroa's personal gain, and described the procedures as "a fraudulent chain of operations". Nine of the cases were related to the purchase of media (Telecentro-Channel 13), RNN, Channel 27), Antena Latina (Channel 7), Super Canal (Channel 33), Isla Vision (Channel 67-53), and Red Radiodifusoras Centrales using a company, Gaperan, S.A. by means of Baninter accounts overdrafts.
The authorities intervened the bank in 2003 and this is estimated to have cost taxpayers upwards of RD$74 billion when the Mejia government chose to pay back all depositors' money, including funds in offshore banks.
As reported in El Dia, defense lawyers for Ramon Baez Figueroa said they were pleased with the conclusions, which they say ensure that they will be able to prove their client's innocence.
Following the court case closely are members of the Coalition for Transparency and Institutionalism, comprising the Young Entrepreneurs Association (ANJE), Community Action for Progress (ACOPRO), Ecumenical Planning and Action Center (CEPAE), National Council for Private Business (CONEP), Institutionalism and Justice Foundation (FINJUS), Citizen Participation and World Vision.
Interviewed on the Nuria & Huchi talk show on CDN, Servio Tulio Castanos Guzman of FINJUS concurred that such a serious situation would not have been possible without the complicity of the authorities in charge of banking controls.
The coordinator of Citizen Participation, a leading civil society group, said yesterday that anyone who has broken the law must be sent to trial. Rodriguez made the comment after Luis Alvarez Renta, who is standing trial in the Baninter case, asked why Porfirio Rodriguez was not mentioning the former monetary authorities that in his understanding violated monetary and financial law. Rodriguez stated: "Our position is not selective. Everyone who committed violations of the law should be tried, and in this case the bankers have been tried, but also the monetary authorities that violated the law should be taken to court and the legal processes should continue to the last consequences," stated Rodriguez. He called for an end to private and public impunity in the country.
The closing arguments are scheduled to conclude around 7 September, which would then give around 20 days for the judges to issue their verdict and then the period for an appeal would be open. Once this case is over, proceedings for the collapsed bank Bancredito and Banco Mercantil are scheduled to open.

Haitians hired for online prostitution
Acting on a complaint from a Haitian woman, District prosecutor Jose Manuel Hernandez Peguero searched and closed a pornography website production happening in a city apartment. In the search, the prosecutors released 12 Haitian women who were allegedly performing in pornographic movies by German Lutz Robert Gunther Meyerding.
The anonymous Haitian woman said she had been hired for a video showing the women masturbating and engaging in other sexual acts, and the images were then sold on the Internet.
Investigations were carried out by the prosecutors who were sent to search apartments 601 and 602D of a building located at Cesar Nicolas Penson 58, and 2A of a building located on Avenida Bolivar. Hernandez Peguero says there is an arrest warrant out for Gunther Meyerding. The investigation carried out by Judge Keyla Perez Santana determined that Gunther operated an illegal business to attract Haitian women to engage in pornography for online broadcast. He apparently charged viewers US$2 per hour. Hernandez Peguero also contacted Haitian ambassador Fritz Cineas to look into the matter.

Big drug bust in Higuey
The National Drug Control Department (DNCD) and the Dominican Air Force have announced that they had found a burned out twin-engine airplane and 150 kilograms of cocaine in a field in Higuey, the capital of La Altagracia province. According to the report several people were being held for questioning. Colonel Guillermo Manueta, the DNCD head for the eastern region, said that the small plane had been pursued since the day before yesterday night, and was located yesterday, burned up, but with Venezuelan markings clearly visible on the tail. The aircraft landed in the cane fields near Batey Campo Nuevo, and the 150 kilograms of drugs were found and the suspects detained three kilometers away. The aircraft, a Cessna, carried the number 642360 and the Venezuelan flag on the tail rudder.
Major General Rafael Radhames Ramirez Ferreira of the DNCD announced yesterday that two DNCD agents have tested positive for drugs and were expelled from the department. Adolfo Nunez Rojas was the first to receive a dishonorable discharge, and is to be followed by agent David Taveras Reyes.
In the war against drugs, Ramirez said they have arrested a group of Dominicans who were deported from the US after serving jail time for drug trafficking there. These are former convicts Manuel Emilio Mella Naranjo, Jose Andres Brito, Alberto Armando Ramon and Ramon Antonio Malero Jimenez. Ramirez said that their associate in the DR was Luis Alberto Paulino Cruz/Luis Lorenzo Perez, with whom they dealt with, sending large quantities of cocaine and heroin to the US. Paulino Cruz is on the Police records for vehicle theft and homicide. The group was detained when a black Mitsubishi SUV, plate G119397 was stopped by DNCD Intelligence Operation officers. In this case, Cesar Ramon Robles Cid is on the run, as reported in Diarioadiario.com
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