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Daily News - Friday, 07 September 2007

Leonel promises help
President Leonel Fernandez has announced that in the next few days he will implement some new measures aimed at strengthening new opportunities available in the textile sector, with the intention of creating jobs in the country's free trade zones. Fernandez, as reported in Diario Libre, said that ways of making the most of new opportunities are being studied so that they are beneficial to Santiago, the Cibao region and the country in general. Fernandez added that his administration is studying the changes in the textile sector, which, according to him, are reflecting positive trends. The President made his statement after a meeting with Dominican Free Trade Zones Association (Adozona) president Fernando Capellan and Adozona directors.
The President announced that a new commission would be looking into Santiago's free zone problems. Clave Digital reports that during a similar visit to Santiago on 4 September 2006, the President named a previous commission to be presided by then Secretary of the Presidency Danilo Medina.
El Caribe reports that during that meeting Treasury Minister Vicente Bengoa and Customs director Miguel Cocco refused the FTZ sector's request that the authorities devaluate the peso because it would have negative effects on the economy. Yesterday President Leonel Fernandez inaugurated apartments at the Villa Magisterial housing project and supervised the public works projects that are taking place in the Arroyo Hondo and Cristo Rey areas of Santo Domingo. The apartment project was completed with an investment of RD$78,978,422 and includes 936 apartments in 117 buildings. The complex also has a 300,000-gallon water tank to ensure that residents have water.

US is big winner of DR-CAFTA
According to US International Trade Commission statistics on trade between the US and the DR for the first half of the year, the United States is the big winner in the start of the implementation of the free trade agreement, DR-CAFTA. US exports to the DR are up 12.67%, from US$2,487.5 million from Jan-June 2006 to US$2,802.6 million for the same period in 2007. Dominican exports to the US, nevertheless, have declined from RD$2,162.5 million for the first half of 2006 to RD$2,060.2 million for Jan-June 2007, for a 4.73% decline. The DR had a negative balance of US$742.3 million with the US for the first half of the year, up from US$325 million for the first half of 2006.
In 2004, the DR had a favorable merchandise trade balance of US$185.5 million with the US. This slid to a negative balance of US$104.9 million in 2005 and US$818.8 million for all of 2006.
The growth of the trade deficit stemmed principally from the decline in apparel exports due to competition from China. A strong peso and increasing local production costs also affected the capacity of the country to compete with US imports from Asia, following the elimination of quotas in 2005.
The DR is the seventh largest importer of US goods in the western hemisphere, after Canada, Mexico, Brazil, Venezuela, Colombia and Chile. It is the 11th largest exporter in the western hemisphere, after Canada, Mexico, Venezuela, Brazil, Chile, Colombia, Ecuador, Peru, Argentina and Costa Rica.
For more information, see www.itc.gov

Business wants say in electricity ruling
The president of the National Association of Young Entrepreneurs(ANJE), Joel Santos is calling on the government to involve private business in the preparation of the ruling for the application of the recently modified General Electricity Law. El Nuevo Diario reports that Santos also called on the government to fulfill the Freedom to Public Information Law 200-04 and its ruling. Law 200-04 establishes that the ruling needs to be submitted to public scrutiny.
The business sector has complained that the CDEEE seeks to prepare the ruling unilaterally, without the active participation of the business sector. The businesses challenge the fact that the government continues to subsidize consumers who do not pay for the service, and the power distribution companies have not significantly increased the number of paying clients. Instead, users who pay for the service are constantly levied with increases. Santos said that according to reports, the government subsidies will be RD$200 million over the level established with the IMF, which he says creates a distortion in the market.
Santos criticized that sectors in government are trying to limit the participation of the business community in matters that directly affect their production costs. The new law establishes a 10% surcharge on power purchased directly from the generators by non-regulated users as well as raising the levels at which large companies can purchase directly from the generators, bypassing the power distribution companies.
The Association of Industries of the Dominican Republic (AIRD) says that the government wants to apply the 10% surcharge to companies that are already authorized to purchase directly from the generators.
The AIRD says the charge should only apply to companies that become non-regulated users now, not those that already are. They explain the new surcharge would have a very negative effect on manufacturing in the DR, which they say is already stagnated, as reported in Hoy.
Central Bank statistics indicate the industrial sector grew by only 0.3% in the first half of the year.
AIRD explained that in Costa Rica, industries have access to power at US$0.04 kWh, while in the DR, the cost is US$0.11 kWh.

Bengoa denies increase in spending
Treasury Minister Vicente Bengoa has denied the Dominican Association of Industries (AIRD) claim that there has been an increase in public costs and spending and that this violates the Austerity Law. Bengoa, quoted in Listin Diario, said that instead of increasing public costs the government has reduced costs and is below the benchmarks set by the IMF. Bengoa defended the government by saying that government revenues have increased and that there has been increased investment as a result, but that it is lower than had been projected. The Minister says that the Dominican economy is doing well and has the highest rate of growth in the region. Yesterday, leading AIRD members criticized government overspending in violation of the 2007 Austerity Law in an interview with Hoy newspaper. AIRD president Manuel Diez, vice president Ligia Bonetti, and executive director Circe Almanzar said that increased taxation and spending could bring about an economic crisis.

Refunds begin Monday
On Monday, 14 September, the Tax Department (DGII) will begin the process of refunding RD$40 million to about 36,000 vehicle owners who paid for their license plate renewal prior to the President's decision to revoke the 2007 sticker price increase. Drivers who have already paid will be able to go to the BanReservas and get cash back or credit for next year's license plate renewal.

AILA getting radar
Dominican Civil Aviation Authority director Jose Tomas Perez says that within one month the radar at Las Americas International Airport (AILA) will be back in service. Perez says that the radar is 15 years old and was damaged by lightning. Perez added that communications equipment valued at US$18 million has been purchased and will be installed at the country's airports as part of the safety requirements set by the US Federal Aviation Authority.

It pays to give advice
Congress is spending RD$26,593,628 annually on special "advisors" who, according to Diario Libre, do little more than collect their checks. Most of the advisors are just political appointees or public relations moves. The Chamber of Deputies spends RD$875,719 monthly on advisors for a yearly tab of RD$10,508,628 while the Senate spends RD$1,372,500, an annual bill of RD$16,470,000. In the Chamber of Deputies the highest salary paid to one of these advisors in RD$46,718 and the lowest salary is RD$5,000. In the Senate the highest salary is RD$60,000 and the lowest is RD$15,000. The group of technical advisors is made up of 19 professionals working various fields but the rest of the "advisors" are accredited as PLD, PRD, PRSC, PPC and UDC members.

Let's party
In her recent column published in Hoy and Clave Digital, Temple University professor Rosario Espinal comments that politics in the DR is a national pastime. She tells the story of a carpenter she hired several months ago who complained that times were boring because there was no election campaigning going on, explaining that he missed the music and gift giving that come with the elections.
"From now to 15 May there will be many parties, disco lights and caravans, the candidates will be giving out hugs and kisses, and many gifts to keep people enthused and motivate those who are not, and their photos will be everywhere," she writes, commenting on the premature start of the campaign. She says she is not against elections, and feels that they are crucial for citizens to have some influence in choosing their government. "But the form and content of our elections does not contribute to improving democracy," she states.
"The pseudo show prevails. Candidates and parties do not debate substantial proposals and they do not have the track record to convince the population of the promises they make," she writes.
"Poll after poll, most Dominicans say that they do not trust the parties. Nevertheless, together with the churches, they are the most successful organizations when it comes to mobilizing Dominican society," she writes.
"Before the 80s, the parties mobilized people for ideas. Now they do so for clientelism," she explains. And then she remembered her carpenter and a light bulb came on. She concludes that the reason why so many Dominicans continue to vote, even if the parties and the candidates who come to power do not contribute to improving people's living conditions, is that they are entertained.
"I propose then, now that all the candidates are campaigning without the official start of the campaign, that the Central Electoral Board modify its mission statement. Instead of establishing rules that will not be met or accounted for, it should ensure the level of entertainment.
"I propose the creation of the Central Electoral Board (JCE) Department for Campaign Animation, with the collaboration of all the parties and the media.
"The political slogans in newspapers, radio and TV (paid or donated) will be varied and colorful. Participating journalists and news commentators will receive special compensation for contributing to the animation. All can be carried out without fear or risks. There is no room for a military coup in Dominican territory in the next few years. So, let's party."

US donates boats
The US has given the DR two high-speed boats that will help in the fight against drug trafficking. In a ceremony to hand over the boats, US Embassy Charge d'Affaires Roland Bullen praised the work being done by Dominican officials to fight the drug trade. Bullen, quoted in Listin Diario, said that the donations represented a permanent commitment towards the Dominican government to help protect Dominican sovereignty and the security of maritime traffic in the Caribbean. The two boats are part of a four-boat donation made as part of a Southern Command project. The project is valued at US$7.5 million for training and equipment for Dominican personnel.

JMMB in the DR
Jamaican company Jamaica Money Market Brokers (JMMB) has announced that it will be starting operations in the Dominican Republic. Diario Libre reports that JMMB's interests are motivated by the country's economic and political stability and geographic location. JMMB has established relations with the BDI and the American Credit Corporation. Guillermo Aranciba, JMMB general manager, explained that JMMB has 15 years of experience and has begun operations in five different countries. He added that the DR offers special advantages like stability, location and growth and also has a developing stock market which offers special opportunities for diverse national and international investments.
For more information, see www.jmmb.com/jmmb_dom.php

Defendants blame Mejia
Defense attorneys for the accused in the Baninter bank fraud case continue to argue that the Mejia government's monetary authorities discriminated against Baninter, and are the ones who should be blamed for the bank's collapse and the ensuing economic crisis. Lawyer Juarez Castillo Seman stated, "In this court we have to clarify who is responsible for the immense damage inflicted on the country, who destroyed the immense value of Baninter's assets, who used the people's money unlawfully to pay back all the depositors and liquidated Baninter without accountability," stated Castillo Seman. He said that evidence presented by the defendants seeks "to prove that the multi-million peso damage caused to the country was not the work of Ramon Baez Figueroa but of the criminal authorities that took control of Baninter on 24 March 2003 and sabotaged the bank's proposed merger with Banco del Progreso, removed the auditors that that bank had sent, all for the embarrassing political and monetary advantage of a group, of a band of wrongdoers," he stated.
Yesterday, the defense presented Julio Ortega Tous who said that the version of the RD$55 billion fraud was like a work of detective fiction by the Mejia government's economic advisor Andy Dauhajre, and that there is no audit that can prove this version. Ortega Tous, former leader of the Fernandez government's economic team, said that a bank's operational loss is not fraud. "If this were the case then all the governors of the Central Bank should be in the dock because by 2002, before the Baninter crisis, the Central Bank's losses exceeded RD$150 billion," stated Ortega Tous.
The defense has maintained that Hipolito Mejia's government and its bad economic policies were what led to the 2003 banking crisis, beginning in 2002 with the case of Baninter against former colonel Pedro Julio Goico for the so-called Pepe Card, a credit card issued by Baninter to the former President's security chief for presidential expenditures abroad.
The defendants are also alleging that the monetary authorities violated the law by paying depositors beyond the ceiling established by law, including returns of RD$551 million to the Baninter treasurer.

Reckless driver goes to Najayo
The driver of the city public transport bus who caused the death of a woman earlier this week has been sent to Najayo jail for three months as he awaits trial. Juan Antonio Dominguez, who turned himself in to the police yesterday accompanied by transport union leaders Juan Hubieres and Antonio Marte, was driving a public bus when he ran a red light. Antonia Castro Vargas, who had just got on the bus, was thrown clear and died instantly. After the accident Dominguez and the fare collector fled the scene. Dominguez claims he ran because he feared for his life.
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