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Daily News - Tuesday, 04 September 2007

Fernandez in NYC
President Leonel Fernandez is traveling to the US in mid September to attend Dominican Week and Counterpart International events in Washington, D.C. and New York City. President Fernandez is scheduled to speak in Washington, D.C. as part of the 15th Annual Dominican Week, organized by the Russin, Vecchi & Heredia Bonetti law firm with the aim of strengthening relations between the DR and the US. The President will talk on the subject of competitiveness and free trade on Tuesday, 18 September 8:30am to 9:45am at the US Chamber of Commerce in Washington, D.C. The event is part of a series of activities for the American Chambers of Commerce in Latin America (AACCLA)'s Annual Meeting/Businessmen and Policy makers from the Western Hemisphere.
See www.aaccla.org/events/detail.asp?EventID=135
On Wednesday, 19 September the President will be in New York City to attend the 2007 World Leadership Awards fundraising Gala that will showcase world leaders who have been singled out for their contributions to improving lives in their regions on Wednesday, 19 September 2007 at Guastavino's in New York City. President Fernandez is being honored by Counterpart International, in association with its Caribbean Media Exchange on Sustainable Tourism (CMEx), for "championing the cause of the needy and underprivileged." Other honorees are Senator Allen Chastanet, Caribbean Tourism Organization's chairman, David Finn, founder of Ruder Finn, one of the largest independent public relations firms in the world, and Paxton Baker, executive vice president of BET J for his pioneering role in launching music festivals across the Caribbean.
On Thursday, 20 September, in New York City, President Fernandez will speak to an audience of investors and financial sector representatives on business and investment opportunities in the DR at the New York Yacht Club (7:30-9:30pm).

Vietnam and the DR
Expanding co-operation with the Dominican Republic, in areas such as economy, commerce, investment, education, science and technology, is what Vietnam is seeking, stated President Nguyen Minh Triet, as reported by the Vietnam News Agency. The state leader made the affirmation while hosting Dominican Foreign Minister Carlos Morales Troncoso in Hanoi on 31 August. This is the first visit to Vietnam by a high-level Dominican delegation since the two countries established diplomatic ties in July 2005. President Triet went on to say that Vietnam and the DR should increase exchanges of visits at all levels and promote cooperation in areas that are the strengths of the two countries such as tourism, mining, engineering and transportation. For his part, Morales Troncoso said the DR is studying a plan to cooperate with Vietnamese companies in producing solar-powered batteries, buses, and information exchanges on tourism, agricultural equipment production and mining. He expressed hope that earlier talks held with Deputy Prime Minister and Foreign Minister Pham Gia Khiem would pave the way for the two countries' relationship to develop further.
During the meeting, the Vietnamese President asked Morales Troncoso to convey an invitation to President Leonel Fernandez Reyna to visit Vietnam. For more news from Vietnam, see

Pharmacies settle with SFS
The Representatives, Agents and Pharmaceutical Producers' Association (ARAPF) has announced that they have resolved their differences with the government on the issue of medical prescriptions. ARAPF vice president Fernando Ferreras says that doctors can now prescribe any medicine to patients, whether generic or name brand. Ferreras explained that doctors wanted the freedom to prescribe the medicine they thought most appropriate. Ferreras added that importers and producers would try to ensure that the agreement is being fulfilled. Importers and producers had expressed concern that the sector would be ruined if doctors were only permitted to prescribe generic medicines.
But even if some loose ends are still being tied up and officials seem optimistic about the new health plan's entry into effect, many patients still don't know their rights under the SFS, despite government efforts to explain the details. Hoy writes that yesterday things continued as normal and that specialist doctors at private clinics were charging as usual between RD$300 and RD$400 per consultation and that some were even charging to see lab results. The new system establishes that patients should see first an internist and pay only a RD$100 difference.
Hoy also writes that most people they interviewed didn't even know that the SFS had come into effect over the weekend. Public Health Minster Bautista Rojas Gomez admitted that the SFS was experiencing some problems but added that this was normal at this stage of the introduction process. Hoy reporters visited several clinics in Santo Domingo and found that things hadn't changed, to the point where the health risk administrators (ARS) haven't explained the changes to their affiliates. Hoy reporters asked a secretary at the Gynecological and Obstetric clinic about the "Receta Unica" (single prescription form), and the secretary replied, "What's that?"

SD Metro usurps funds
The Santo Domingo Metro project continues to usurp public funds and Hoy is reporting that in July the government allocated more money to the Metro than to eight ministries combined. Education (RD$203,837,832.88), Public Health (RD$138,654.80), Armed Forces (RD$12 million), Sports Ministry (RD$28,770,693.34), Culture (RD$50 million), Agriculture (RD$5,164,519), Environmental Ministry (RD$4,329,617) and the Presidential Administrative office (RD$8,884,587.95), combined, received less money than the Metro. In July the Office for the Reorganization of Transit (OPRET), who oversees the Metro project, received RD$400 million in July and for the first six months of the year has received RD$2.85 billion. The only public office that received more funds than the Metro was the Ministry of Public Works, which received RD$400,978,348.

Plate tax reduction approved
The Chamber of Deputies has approved the bill that would effectively leave the cost of vehicle license plate renewals taxes for 2007 at the same level as they were in 2006. Congress gave the bill priority treatment and President Fernandez must now sign it into law. The bill was submitted by President last week and explained that Dominicans should not be burdened with more unnecessary taxes. The bill modifies the January 2007 tax reform that had established license plates would fluctuate from RD$1,200 to RD$98,000. Now cars that are five years old or older will pay RD$1,200 and all other cars will pay RD$2,200.

Women dominate the classrooms
Although women's presence in the political arena is still relatively small in comparison to men, the presence of women in the classroom overshadows that of their male counterparts and could have interesting effects in the future. Listin Diario writes that 61% of all students in the country's universities are women, as opposed to 38% male participation. The increase in female participation in academia could be a positive sign towards increasing the levels of equality between the sexes. According to Elba Franco, Education Director at the Ministry for Women, the reason behind this trend is an increase in self-esteem among this generation of women. Franco says that women have proved that they are just as capable as men and must be respected and valued. But there are still strides that need to be made. According a 2005 Central Bank report, the unemployment rate for women was 28.8% compared to only 11% for men. Income disparity is also a key issue. The report indicates that 43% of women make an average of RD$4,000 less than men. The report indicates that women make less money than men even when working in the same jobs.

Fitch Ratings: Positive Outlook
Fitch Ratings says that the Dominican Republic's foreign currency and local currency Issuer Default Ratings (IDRs) are currently at 'B', with a Positive Outlook. In a report issued today, Fitch also classified the country ceiling at 'B+' and the short-term foreign currency IDR at 'B'.
According to Theresa Paiz Fredel, a Senior Director on the Fitch Ratings sovereign team, "The Dominican Republic's ratings are supported by the strength of the economic recovery, progress on the structural reform front, as well as a manageable debt service profile.
"Nevertheless, in spite of achieving macroeconomic stability, a still fragile liquidity position that can be exacerbated by a less benign external environment or a loss of confidence and ensuing capital flight constrains the ratings to current levels at this time". As the country's Stand-by arrangement with the International Monetary Fund expires in January 2008, Fitch is also concerned that "without the program as an anchor, it may be more challenging for the government to complete its structural reform agenda and prudently manage public finances, particularly in an election year, which could have implications for maintaining confidence.
"The government has faced delays implementing its structural reform agenda as required by the Stand-by arrangement with the IMF. However, as expected, notable progress with respect to the fiscal and financial sectors has occurred since the government gained the majority in Congress last year. Structural reform efforts have targeted fiscal sustainability, the institutionalization of the budgetary process and improvements in the efficiency of expenditures. The financial system's supervisory and regulatory framework has been strengthened. Passage of the electricity sector law was also secured this month. Additionally, the authorities finally implemented a plan to recapitalize the central bank and address the quasi-fiscal deficit problem earlier this year.
"The vigorous pace of economic growth continued in the first half of 2007, reaching 7.9%, while inflation has remained in single digits. Fiscal consolidation is back on track, reflecting better than anticipated revenue growth and expenditure restraint. Unlike prior years, the authorities should easily meet, if not surpass, the targeted non-financial fiscal surplus of 0.5% of GDP this year. A favorable balance of payments performance, underpinned by remittances, tourism receipts, as well as strong FDI flows, continues to support a steady recuperation of foreign reserves and an improvement in the country's liquidity position. The country's liquidity ratio has increased to 145% this year from a low of 36% in 2003. However, this ratio remains significantly below the 'B' median of 210%, and when adjusting the liquidity ratio to include banks' resident foreign currency deposits, it declines to 76%, highlighting the vulnerabilities associated with high dollarization". Furthermore, Fitch estimates that the country's overall external financing needs as a proportion of international reserves are 92% this year, more than twice the 'B' median of 38%. "Scheduled amortizations for the non-financial public sector, however, are almost entirely with official creditors this year and are covered by commitments from multilateral and bilateral sources as well as treasury deposits".

Exports to Haiti decrease
For many years Haiti has been the second largest recipient of Dominican exports, second only to the US, but Diario Libre, quoting a report by the Center for Exports and Investment (CEI-RD) and Customs, explains that exports to Haiti have decreased by 9.7% during the first six months of the year. During that same period Holland, South Korea and Belgium all overtook Haiti as recipients of Dominican exports. The report also indicates that exports for the first six months were valued at US$1.18 billion, for a 65% increase in comparison to the same period in 2006, although the increase in terms of volume was only 18.7%. The increase in exports was due in large part to the increased exports of nickel, sugar, bananas, hand-made cigars and metal rods. The US imported US$378.3 million, Holland imported US$135.9 million, South Korea imported US$134.1 million, Belgium imported US$67.2 million, Haiti imported US$66.1 million and Puerto Rico imported US$57.3 million worth of Dominican goods. Puerto Rico also slipped down the list of major importers of Dominican goods. Last year it was in fourth position, but this year it went down to sixth.
The report indicates that trade with countries with which the DR doesn't have a free trade agreement also increased significantly. For the first six months of 2007 Japan imported US$48.7 million in Dominican goods compared to US$9.4 million. Also on the list of major importers of Dominican goods are China (US$42.75 million), the UK (US$33.20 million), Spain (US$27.34 million), Taiwan (US$$24.81 million), Canada (US$20.38 million) and Cuba (US$13.18 million).
Traditional exports grew by 13.87% while mineral exports grew by 125.39%, with a value of US$620.89 million and non-traditional exports grew by 31.78% with a value of US$441.20 million. Nickel experienced the largest growth with a 127.79% increase, valued at US$613.73 million. Sugar experienced a 20.80% increase, valued at US$67.81 million for the first six months of the year. Cacao experienced an increase of 17.48% for a total value of US$27.49 million.
As for January-June 2007, the country is reporting a US$802.3 million trade deficit, due primarily to the increase in imports attributed to the DR-CAFTA and the overvalued Dominican peso.

Jorge Mera goes to OAS
Orlando Jorge Mera has gone to the Organization of American States (OAS) claiming that President Leonel Fernandez is using public funds for his presidential campaigns and adds that the President is responsible for the deterioration of institutionalism in government. He says that an example of this was when he used public funds in his campaign against then presidential hopeful Danilo Medina. Mera also accused the President of undermining the democratic process and handed OAS country representative Paul D. Durand a document highlighting the PRD's concerns. Durand says he will pass on the documents to OAS headquarters in Washington, D.C. The document focuses on the creation of 40 new political posts, in violation of the government's austerity law, as well as the use of inauguration events for presidential campaigning. The Secretary says that the creation of these posts, which were filled by opposition party members, was done with the purpose of strengthening the President's re-election campaign. Jorge Mera has also asked the OAS to monitor the 2008 presidential elections.

A daring political strategy
Public Works Supervisor for the Presidency, Felix Bautista, recognized as one of the leading campaign strategists for President Leonel Fernandez's re-election campaign explained what's behind the wave of government appointments of third tier politicians. As he explains in a contribution to El Caribe newspaper, it is all about a show of "daring politics". He explains they are reprising a similar strategy of strengthening ties with minority forces, which has worked for the PLD in the past. Bautista says they are relying on the minority party vote to win in a first round. "Now, for the May 2008 election campaign, President Fernandez, continuing with the process of reaching out to minority forces begun in 2003, has achieved that the PQDC, PRN, PUN, PPC, PDP and PNVC with an estimated combined total of 105,942 voters (2004 election), equivalent to 2.93% of the total of valid votes, participate with the PLD in a grand national coalition," he writes. The PLD is already relying on the support of the BIS, APD, PTD, UDC, PLRD and FNP, with 292,494 votes, equivalent to 8.1% of the valid votes, that together with the vote of PRSC leaders under the Progressive Block, led to the PLD's victory in the May 2004 election with 57.11%, he explains.
Now, adding up those and the new minority party votes, for 11.03%, with the 44% the polls grant the PLD, is enough for a 55.03% win in the first round. He explains with the support of these parties, the photo of the candidate of the PLD would be in 13 voting ballots. "The incorporation of important figures to the PLD's presidential project together with its 12 allied parties, is a demonstration of political daring," he concludes.
Victor Martinez writes in the El Nacional opinion page yesterday on Felix Bautista's new role in government.
"The supervisor of public works of the state is not only the man whom President Leonel Fernandez has entrusted with the construction of most of the works he is inaugurating, but he is also played a key role in recruiting the support of opposition party members and known personalities," he writes, citing sources in the Presidential Palace.
He explains that the office that Bautista directs has undertaken many works that previously would have been entrusted the Ministry of Public Works. "This officer [Bautista], together with Diandino Pena, director of the Transport Reorganization Office (OPRET), are the executing arms of the government in regards to construction, relegating the Ministry of Public Works," he explains. "Even though he does not appear much on TV, over recent months, this officer has carried out work similar to that former Secretary of the Presidency, Danilo Medina," he writes. "This is the man that gets things done for the President. When the President wants a community work to get done, he entrusts it to Felix Bautista" He also explains that the Presidency has assigned the construction of the Internet high tech centers throughout the nation to Bautista.

Lawyers: billions in compensation
Lawyers representing the Central Bank and Superintendence of Banks are demanding 6 to 20 years in jail and compensation payments worth RD$100 billion, plus a RD$2.5 million fine for the accused in the Baninter case, as reported in Clave Digital. They are also demanding the confiscation of all assets owned by the accused, including the Editora Listin Diario and Editora Ultima Hora that had been excluded from the conclusions presented last week in the special banking expert prosecutors' closing arguments. The state prosecution case against bank executives and advisors Ramon Baez Figueroa (20 years jail plus RD$2.5 million fine), Marcos Baez Cocco, Jesus Maria Troncoso Ferrua, Vivian Lubrano de Castillo (six years jail and RD$2.5 million fine) and Luis Alvarez Renta (20 years jail and RD$2.5 million fine) continues today.
The lawyers also asked the court to order Baez Figueroa, Vivian Lubrano and Marcos Baez to pay RD$45 billion in compensation to the Central Bank, and RD$50 million to the Superintendence of Banks. Likewise, they should pay RD$18.7 billion to Baninter, along with Alvarez Renta who should pay RD$5.6 billion, for a total of more than RD$63 billion among the accused.
The trial now moves to the presentation of closing arguments by the defense, which are due to start today.
The Central Bank accused the Baninter executives of fraud in 2003, which lead to a fiscal deficit of RD$55 billion, and consequential spiral of devaluation and inflation that is said to have impoverished 1.5 million Dominicans. At present, the Central Bank authorities estimate the cost of the fraud at more than RD$74 billion.

Crime down
Interior and Police Minister Franklyn Almeyda says that crime rate is down. He said it has declined from 25.2 crimes per 100,000 inhabitants in 2004 to 20.2 crimes in the first seven months of the year. The Minister also announced that mixed patrols by military forces, at night, would increase, and that the Barrio Seguro program will be expanded to 10 neighborhoods in Santiago and 9 in the province of Santo Domingo. Almeyda says that the alcohol decree, limiting the sale of alcohol, will stay in place seeing as it has led to a decrease in crime. Almeyda added that the presence of the Auxiliary police on the streets would continue.

Tragic bus accident
A 36-year old bioanalyst, Antonia Castro Vargas, who was on her way to work from here home in Villa Mella, was thrown from a public commuter bus and died instantly of severe head injuries at 6:30am yesterday. The accident took place at the corner of San Martin and Ortega y Gasset Avenues, as reported in El Nacional. The woman had just boarded the bus and had not had time to take her seat when the crash occurred. Castro was carrying RD$35, a credit card, makeup, perfume and two photographs. The front of the bus was completely destroyed.
The accident has caused outrage as fellow passengers reported that the bus driver was racing another Fenatrano bus along the route. His reckless driving led him to cross a red light, and then crash into a car, finally coming to a halt at a lamppost.
The car passengers escaped injury thanks to functioning airbags. Sister Isaura Martinez, of the Marillac School located at the site of the accident, said that if it had occurred a little later it would have caused a larger-scale tragedy because of the large number of people who congregate near the entrance of the school. She told El Nacional that the accident was a crime because bus drivers "show an incredible lack of respect for life". She complained that AMET officers were ineffectual in confronting this behavior. El Nacional says the comment of the day was AMET agents and their alleged permissiveness towards public transport vehicle drivers.
The new director of AMET, General Latif Miguel Mahfoud Rodriguez said this accident is a criminal act. He instructed agents to act drastically against drivers that cross a red light, as reported in the Listin Diario.

Pedro wins; gets 3,000 K
If you thought his career was over, you couldn't have been more wrong. Dominican pitcher Pedro Martinez made his first major league appearance of the year at Shea Stadium yesterday and didn't disappoint. Martinez, who hadn't pitched since last September after undergoing career-threatening shoulder surgery, pitched five innings, giving up five hits and three runs and striking four on his way to his 3,000th career strikeout. Martinez is the 15th player in MLB history to reach this milestone and the first Dominican to do so. This has been a year for Dominican comebacks. Earlier this year outfielder Sammy Sosa, who many thought was out of baseball, came back and hit his 600th career homerun, consolidating his place in the Cooperstown Baseball Hall of Fame.
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