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Daily News - Wednesday, 26 September 2007

Fernandez lobbies for UN seat
President Leonel Fernandez and Foreign Minister Carlos Morales Troncoso are waging an intense lobbying campaign for the votes of Latin American, African and Middle Eastern nations during their participation in the UN General Assembly, as reported in El Caribe. Yesterday, Fernandez met with ministers from the Rio Group and members of the Gulf Cooperation Council. He also met with the presidents of Senegal, Mauritania, Nigeria, Morocco, Honduras and El Salvador.
The DR needs to be nominated by its regional caucus, Latin America and the Caribbean (that regularly has two seats on the Council), and then approved by the UN General Assembly. The Dominican Republic, one of the original signatories of the United Nations Charter, has never sat on the Security Council.
President Leonel Fernandez is in New York on the last leg of his 13-day visit to the United States.
Over the last few months, the Dominican government has spent millions on its campaign for a two-year seat on the 15-nation UN Security Council. President Leonel Fernandez has attended world summits as part of this campaign, and Foreign Minister Carlos Morales Troncoso has traveled the world to meet with anyone who might vote for the DR. Costa Rica is the other contender for the seat, and the Central American country has already held the position. The election for the seat will take place on 16 October in New York and the position becomes available on 1 January.
The prestigious seat makes it possible for a country to take part more actively in world affairs, boosting its diplomatic importance, as well as a way of bringing a country's foreign policy priorities (for instance the plight of neighboring Haiti) to the attention of the world community. Nevertheless, there can be a high financial cost attached to it, also, according to a June 2006 study released by two Harvard University economists.
According to the study by economists Ilyana Kuziemko and Eric Werker, there may or may not be benefits to be had.
"We find that a country's US aid increases by 59% and its UN aid by 8% when it rotates onto the council," indicate the economists. "This effect increases during years in which key diplomatic events take place (when members' votes should be especially valuable) and the timing of the effect closely tracks a country's election to, and exit from, the council. Finally, the UN results appear to be driven by UNICEF, an organization over which the US has historically exerted great control."
Nevertheless, the same study explains that, "there are several reasons to doubt that countries systematically get more aid while on the council" and concludes that "because non-permanent members of the Council do not have veto power, they may not be worth bribing at all".

DR improves on business ranking
The DR has climbed 18 steps up and now is 99th on a list of 178 countries in the World Bank ranking for ease of doing business, up from 117th last year. Countries are ranked by ease of: starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
The improvement came after the National Competitiveness Council (CNC) pushed forward efforts to reduce Dominican government red tape to enable a company to be formed in 22 days, down from 73 days.
Andres van der Horst, director of the CNC said that it would become easier in 2007. He announced the installation of a system whereby companies will be able to be formed via the Internet in a matter of hours. The system would put the DR at the vanguard in Latin America. He says they have been working on recommendations in a USAID-funded Chemonics consultancy study, and are implementing these in coordination with the Center for Exports and Investments (CEI-RD).
Van der Horst also pointed out that the DR improved its ranking in support for foreign investors, going from 135th position to 122nd, or moving up 13 steps.
In Latin America and the Caribbean, the DR is ranked 19th amongst 31 countries.

A bill to limit "extras"
The National Administration and Personnel Office (ONAP) is working on a bill to limit some of the expense account "extras" so abused by officialdom. According to Diario Libre, ONAP's proposal will limit per diem payments to 10% of salary as a way to put a halt to high-ranking officials' juicy expense accounts. Each person will have to provide expense receipts and make sure they don't exceed the set limit. Only the President and Vice President will be exempt from this requirement.
The legislation will also require that high-ranking presidential appointments will entail full-time dedication and therefore the appointee will not be allowed to have any other income except from teaching or for serving on a board of directors for a public or private entity.

Worries over who holds the CDs
Two local economists, Arturo Martinez Moya and Guillermo Caram are expressing concern about just whom owns Central Bank certificates. They tended to question the bank's decision to increase the amount of certificates in the hands of foreign investors. They called the move "risky and possibly dangerous" since the certificate owners can, at any time, request their money and place significant pressure on the local currency. Currently about 20% of the Central Bank's CDs are in the hands of international investors. Martinez Moya pointed out to reporters that the recent problems in the sub-prime lending area in the United States could move investors to extract their funds from the Dominican certificates in order to cover their deficits. Economist Guillermo Caram called on the Central Bank to explain just why it has more than US$1.0 billion in foreign-held certificates. He recalled what happened in Mexico when foreign investors decided to withdraw their money. Both economists are identified with opposition parties, and when reporters pointed out that the certificates were for fixed periods of time, they said that foreign investors had used the secondary market to change their dollars into pesos to purchase the CDs, and could easily access the same market to retrieve their dollars. This would put a lot of pressure on the exchange rate and oblige the government to use some of its reserves in order to avoid any abrupt shifts in the exchange rates.

CONEP and the SFS
The president of the National Council for Business (CONEP) said that the fledgling Family Health Insurance (SFS) program is still plagued with issues concerning the services it is offering the public. According to the CONEP, the services do not justify the amount of money being contributed to uphold the system by workers and management. CONEP president Lisandro Macarrulla told Diario Libre and other papers that over a billion pesos has already been paid into the SFS system, "more than was paid under the previous system", and he said that "there are really many deficiencies and lack of services" considering what is being paid into the system.
He said that the business sector was trying to cooperate with the government authorities in order to work out the difficulties one by one, but the government has to guarantee a level of service proportional to what is being paid into the system. CONEP's stance is that if there is an improvement and the problem areas are resolved, they will continue to work with the authorities, "but we are going to demand a quality service for our employees because we have paid for it." Company workers have seen their benefits considerably reduced, while companies are paying more for medical services, and the workers are being asked to pay more to see specialists. The president of the Dominican Medical College, Enriquillo Matos says that the explanation is that the ARS that manage the family plans want the employees to purchase complementary insurance that would restore the benefits they previously enjoyed.

Oil prices worry IPPs
The Independent Power Producers (IPPs) and the electricity distributors are worried about the recent increases in the price of crude oil. A barrel of crude traded at over US$80 on the New York Stock Exchange for most of last week. The electricity distributors have to work with consumer prices "frozen" by the government and most admit to 40% losses in transmission, theft and fraud. All of this is working to reduce their once ample profit margins. Coal and natural gas generation is looking better and better for the generators. Preliminary calculations indicate that generators can save around US$22.6 million per month with these fuels, rather than use fuel oil #6, the current fuel of choice for 60% of the nation's generation capacity. For example, a million BTU of coal costs US$2.28; the same amount of energy by natural gas would cost US$6.43; and fuel oil #6 would cost US$9.30 for the same million BTUs. Currently, only AES-Andres uses natural gas at the Andres and Los Mina generating sites.

Election math
Today's A.M. editorial on page two of Diario Libre was written by Adriano Miguel Tejada, who did his graduate studies in Political Science. The lawyer, who is also editor of the newspaper, says that one of the best- studied areas of political science is the impact that candidates have on electoral mathematics. This refers to the impact a new player can have on the other candidates. The Dominican electoral system requires two rounds of voting if a candidate does not obtain 50% plus one of the votes cast. Normally, this means a second round of voting where one of the two candidates will certainly obtain the required 50%. When there are three candidates in the first round, there are a lot of possible combinations, most of which will only affect the leading vote getter. Tejada observes that the third candidate usually takes votes from the second-ranking vote getter and not the first. He cites two recent elections as examples of this. Then the editorialist asks what happens when there is a fourth candidate, such as Eduardo Estrella in this case. His idea is that everything will depend on just how polarized the electorate is in any given election. For the May 2008 elections, if there is a polarization between Leonel (Fernandez) and Miguel (Vargas Maldonado), it won't matter much that the reformist votes are divided between Amable (Aristy Castro) and Eduardo (Estrella). The editor then poses the idea that "if the electorate's feeling is that they do not like any of the three main candidates, then Eduardo (Estrella) as an "outsider" could take votes from all three and create the conditions for a second round of voting. Tejada says that he puts forth the simplest combination so that readers can appreciate the impact of a candidate that is not part of "the system" in any given election. Just what role the "outsider" would play in a second round of voting would depend on whether the outsider got to the second round or whether he would have to form a coalition.

Forty-four years ago yesterday
Members of the ruling PLD party commemorated the military coup that removed Juan Bosch from power 44 years ago. Several other groups also remembered the event with floral tributes and small public gatherings near the Presidential Palace. Politicians and students listened to speeches that reminded the audience of how the army had ended the seven- month administration of the first president to be freely elected after the death of dictator Rafael Trujillo in 1961. Minister of Education Alejandrina German took part in some of the activities. As a result of the coup, the DR's transition towards democracy was thwarted for two years, resulting in an armed conflict in 1965 that divided the nation, and military intervention by the United States under the auspices of the Organization of American States (OAS).

Hearing on new US ambassador
The US Senate's Foreign Relations Committee has initiated hearings on the nomination of Robert Fannin to the post of US Ambassador to the Dominican Republic. The hearing proceeded without any controversy or problems for Fannin, and Senator Robert Menendez even had words of praise for the Dominican Republic and President Fernandez. It is expected that the committee will emit a favorable opinion on the nomination and the complete Senate will vote on it in the not-too-distant future. Fannin is a senior partner at the Steptoe and Johnson law firm in Washington. According to Diario Libre, he has experience in financial services, real estate, oil, technology, transportation, insurance and health.

NASA astronaut visits UASD
Dr. Ellen Baker, part of the first United States astronaut crew to visit the Russian spacecraft MIR, will take part in the V World Junior Science Congress at the Autonomous University of Santo Domingo (UASD). Baker will speak on "Living and Working in Space". Also invited to the Congress are Illinois physics professor Anthony J. Leggett, who won the Nobel Prize for Physics, and the director of the Max Planck Institute, Juan Ignacio Cirac, a winner of the Prince of Asturias Prize for Scientific Research. The congress is designed to support and promote the development of science and technology in the Dominican Republic and other countries.

Teen tech thieves to Najayo
The judge at the National District Permanent Jurisdiction has sent two teenagers, accused of cloning cable access modems, to preventive custody at the Najayo Model Prison in San Cristobal. Magistrate Keila Perez Santana decreed three months preventive custody for Jean Luis Pina Castro and Luis Eduardo Cordero Collado, both accused of cloning modems to access the Tricom Internet service. The prosecutor presented five Motorola modems that had been cloned to access the Tricom Internet service.

EXPO Cibao 2007 opens today
The Expo Cibao 2007 opens at the Sports Complex at La Barranquita in Santiago today. This year's event is dedicated to the Cibao Savings and Loan Association, which is celebrating its 45th anniversary. More than 200 commercial entities will exhibit their products and services and more than 450 stands will be located on the grounds. Some 250,000 people are expected during the five-day show. This afternoon, high-ranking government officials will officially open the exhibition, which includes stands from Venezuela, South Korea, St. Lucia, Puerto Rico and Brazil. As usual, there will be outstanding cultural and artistic events each night and visitors can obtain excellent buys on many of the items on display.
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