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Investment Climate (1-4)

Economic Aspects (5-9)

Situation and Perspective N O V E M B E R

2 0 1 1

Political Aspects (1012)

Legislative Aspects (13-15)

1- Dominican Republic offers US$250 MM in international bonds

IN THIS EDITION: D.R . offers bonds

1

Investment climate in DR praised

2

Casa de Campo renews

3

Barrick creates jobs

4

IMF asks for higher electric charges

5

DR exports vegetables

6

Tributary costs rise

7

Economic situation

8

Exchange rates

9

Election polls Gallup-Hoy

10

H.M criticizes Elections

11

PRSC may decide elec12 tion Diezwinners años de Leonel 12 Baja el IPC 12 Agricultural Laws 13 Nuevo jefe de la policía 13 Subsidio eléctrico 13 Duvalier a comiHaití 12 El Senado llega designa 14 American citizens may 14 Leonel arremete contra 12 Tourism sigue creciendo 14 luego de 25 años sión para escoger jueces have to report accounts PRD Fidias Aristy se queda 13 Se consultara alde PRD ende 15 15 Apoya idea de Mejia Subero Isa warns 15 Recaudaciones DGII 13 en la Liga Municipal las cámaras crear nexos con China aumentan Magistratura bajo conGrupos reclaman en el 14 14 Reelección 16 Tasa de den Cambio Palacio marcha atrás 16 trol oficial Entrevista entre LF y 17 al paquetazo Retos del Nuevo con17 Partidos buscan legisla15 greso Apoyo al paro general de 15 ción evitedecompetencias Captura Figueroa 18 Julio Gobierno no usara fon18 Abogan por ley tarjeta- en 16 dos de pensiones El Senado convierte Candidaturas presiden16 19 ley la modificación al habientes Presupuesto Legislación contra el 20 Diputados rechazan 17 clientelismo Proyecto de ley modificaciones Ley busca 17 reducir gasto enElecinstiTribunal Superior Aprueban consejos PJ y 21 tuciones pública toral 18 B.M. advierte el país Leyes crean “incentivos” 22 perdería recursos si no Ley de reestructuración 23 aprueban plan mercantil Profesionales extranjeros tendrán que registrarse para ejercer

>Clima >Clima de Inversiones< >Clima de de Inversiones< Inversiones<

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The Dominican Republic placed US$250 Million in the international markets through a reopening of bonds previously issued with maturity in 2021, with a performance of 6.875%, the lowest rate ever reached by the Dominican Republic in all of its history. More than 120 investors from around the world participated in that transaction. This issuing and placement of global bonds is made pursuant to the Law 48-10, and the funds collected will be reutilized in 2012, pursuant to Article 26 of the Law 294-11 of General Budget of the Dominican State for the year 2012, to finance infrastructure projects and to provide economic support to other sectors of the economy. Published by: Listin Diario Newspaper, November 9th 2011

2- President of the British Chamber of Commerce praises Investment Climate The president of the British Chamber of Commerce of the Dominican Republic, Marcos Peña Rodriguez, valued positively the investment climate of the country. He said that the observations that the British ambassador in the country, Steven Fisher, made last week are “isolated incidents” and that they do not affect the perspectives of British investment in the Dominican Republic. The El diplomat criticized the investment climate of the country and said that a British company had left the country because it was being extorted. “The investment climate in the Dominican Republic is attractive; the Dominican Republic still has an economic and political stability which is appreciated. Right now the Dominican Republic is the biggest commercial partner of the United Kingdom in the Caribbean area, which is a lot to say, since there are nations that are former British colonies; then the potential that there is in the country is extraordinary”, said Peña Rodriguez

3- Balanzaby:comercial entre RD y November Brasil es bastante Published El Caribe Newspaper, 29th 2011dispareja República tiene una balanza comercial muy dispareja con Brasil, es de3- Casa deDominicana Campo invests US$40 Million in its restructuring cir, que sus exportaciones están muy por debajo de las importaciones que realiza The Casa deque Campo, Silvestri, said that Central Romana Corporation has invested cadapresident año, una of tendencia debe Claudio ser revertida. more than 40 Million dollars for the restructuring of that tourism complex, although of the economic crisis affecting world, they have positive expectations about theambas future nacioof the Dominican RepubPara tenerthe una idea because de la magnitud de la desigualdad comercial entre lic. en los últimos cinco años Brasil se ha aproximado prácticamente a los US$400 nes, 3- Disponen $175 MM para microempresas millones anuales en exportación hacia el territorio dominicano, mientras de este lado sólo se ha enviado para el equivalente a US$10 millones. He said that for this yearallá 2011 they will conclude the remodeling of one of the largest halls of the hotel, 3IIBI: plataforma para lafilial competitividad-país El Banco Ademi y Proparco, de la Agencia Francesa Desa-US$12 Million in what will be the most at a cost of more than one million dollars. Also, they willdeinvest rrollo (AFD) firmaron mediante el 2011 cual la entidad Publicado por: Periódico Elconvenio Caribe, 16 de febrero complete kitchen of theun Caribbean. competitividad de las empresas dominicanas, en el financiera local recibirá un préstamo deLa175 millones de pesos marco de la apertura global, está garantizada en el Institupara financiar microempresas en tododeelinversión país. 4EE.UU. yUS$2.0 España tienen 45% extranjera to de Innovación y Biotecnología e Industria (IIBI), a partir In addition, Million willelbe invested in the construction ofen 20RD new rooms. de procesos de investigación biotecnológica y de calidad Manuel Arsenio Ureña, , presidente delinternacional Banco Ademi especifi- en Estados Unidos y Europa. reconocidos a US$17,924.3 millones. De ese valor, Estados Unidos España controlan el 45.2% de ascendió Published HoyyNewspaper, November 18th có :“Vamosby: a apoyar una cantidad inmensa de2011 microempresarios Estados Unidos es responsable de US$5,059.1 la inversión extranjera colocada en República el IIBI funciona el único laboratorio de República Domide todo el sector. Pero este fondo está En destinado especialmente millones (28.2%), España de US$3,051.9 Dominicana, mientras, entre Canadá, México, nicana con la certificación de la norma de calidad 17025,millo4Barrick activities almost 10agrícolas thousand para los proyectos de create microproductores deljobs país, de las nes el (17%) y Canadá de US$2,826.1 millones Reino Unido, Francia y Holanda son responsables la cual garantiza acceso a mercado de los productos distintas agrícolas”. Currently the mining company Barrick Pueblo Viejo has employed about 9,200 workers, of which del 40%,zonas tomando en cuenta las estadísticas (15.8%). industrializados que asuman esa certificación para entrar1,200 are permanent The del restperíodo Works a temporary basis through contractor companies. It was históricas del employees. Banco Central 2000Elaaño pasado, a pesar de lasdel desfavorables con-so sin in problemas los países más exigentes mundo, afirinformed by thePeriódico engineer Manuel president of the mining company. He said that the process 2010.El restante 15% está en15manos demó panamePublicado por: Hoy, deBonilla, diciembre 2010. diciones a nivel internacional, el país recibió porof la directora del organismo, Bernarda Castillo. installation of the gold, silver, copper and eventually processing that the Pueblo Viejo Reserve ños, venezolanos, empresas de Islas Vírgenes y zinc concepto de plant, inversión extranjera unos has, in good rhythm. The projected investment by the firm is of US$3,500 Million. GranisCaimán. Publicado por:US$2,839.2 Periódico Listín Diario superior en US$1,268.9 millones, millones al monto captado en el 2009. Entre el año y octubre del 2010 la 17 inversión th 2011 Publicado por: Periódico El Caribe, 24 de febrero Published by: 2000 Hoy Newspaper, November extranjera directa (IED) en República Dominicana 2011 ascendió a US$17,924.3 millones. De ese valor,


NOVEMBER

2011

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>Economic Aspects< 5- The International Monetary Fund asked government for an 18% increase in the energy bill The Dominican Republic Government admitted that the International Monetary Fund (IMF) requires the country to increase the electricity bill an 18%, as part of the standby agreement signed in 2009, and which involves US$1,700 Million. It is so disclosed by the Minister of Economy, Planning, Investment and Development, Temístocles Montás, who said that the Dominican authorities are discussing that aspect with the international organ, because of the differences they have over the same. Published by: Listin Diario Newspaper, November 10th 2011

6- Dominican Republic exports vegetables this year for US$60 Million At the end of this year the country will have exported 71.8 Million pounds of vegetables from greenhouses, mainly to the United States, Canada and Europe, for an amount of US$60 Million. The production of vegetables in controlled environment during 2011 will be more than 90 Million pounds, of which some 22 Million pounds will be consumed in the country. Published by: Hoy Newspaper, November 10th 2011

7- Tax expenses in 2012 will surpass this years in RD$10,536.9 Million The Dominican Government increased in RD$10,539 Million the fiscal expenses forecasted for the next year 2012, contemplated in the budget of expenses and law of public expenses of 2012, with respect to the amount forecasted for this year 2011. According to the study of “Fiscal expenses in the Dominican Republic”, of the Ministry of Finance, the Government will cease to collect in 2012 a global amount of RD$118,882.7 Million from the budget of 2012, for concept of preferential treatments that distance themselves from the tax law and have the objective of benefiting certain zones or contributors. The fiscal expense contemplated this year is of RD$108, 346 Million Published by: Listin Diario Newspaper, November 14th 2011

8- Macroeconomic Situation: According to the Bi Annual Report from the Central Bank of the Dominican Republic, Bank BHD and Acento Digital the behavior of the economic sector of the Dominican Republic during the semester of November 2011 was as follows: Percentage change in CPI in the month of October was 0.03, with a base index of 107.54 and a 12-month average 8.07. Monetary and banking indicators traditional for the month of November (in millions): Central Bank: Grossinternational assets: U.S. $ 3982.0 Gross international reserves: U.S. $ 3370.9 Net International Reserves IMF: U.S. $ 2889.5 Investment securities: 165,989,3 National Multiple Banks: International Assets: U.S. $ 996.3 International Liabilities: U.S. $ 581.2 Gross domestic product (GDP) current of 2011 between the months of January and July is situated on 12.1 and chained GDP 4.0.


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9– Exchange Rates During the course of the month of November the Dollar of the United States has remained between RD$38.31 and RD$ 38.51, while the euro has remained between RD$ 51.34 and RD$52.94. While fuel prices where between RD$225.60 for a gallon of premium and RD$206.90 for a regular unleaded gallon. NOVEMBER

“Exchange

Rates and Fuel prices

2011

>Political Aspects< 10- Hipólito remains on top but Danilo gained 9 points If the election were held on the month of November 2011, the presidential candidate Hipólito Mejia, of the PRD, would obtain the 47.9% of the votes casted, and the presidential candidate of the PLD Danilo Medina, would reach the 42.6%, according to the latest poll Gallup-Hoy. This study of public opinion was made by the enterprise Gallup Dominican Republic for the HOY Newspaper. The field information was gathered in all of the country between the 11th and the 14th of the month of November 2011. The margin of error is of more or less 2.8%. In the previous poll Gallup-Hoy, of august of this year, Mejia had a decision of votes in its favor of 47.9% and Medina of 33.4%. This means that the first remained the same while the second increased 9.1 points. Now the study of public opinion found that in the third place of presidential sympathy the veteran senator of the PRSC Amable Aristy Castro and the lawyer Guillermo Moreno from the political party Partido Alianza País are tied, with a 2.2%. In relation to the poll of august, Aristy Castro decreased 1.3 points and Moreno 0.2 points. Published by: Hoy Newspaper, November 22nd 2011

11- Minimize criticism by Hipólito Mejia in JCE The claims of the presidential candidate of the Dominican Revolutionary Party (PRD), that in the Central Electoral board (JCE) there is a plan to “bend the results” on the next electoral process, provoked the rapid reaction from three of the members of the electoral organ. The statements of Hipólito Mejia make reference to the crisis generated in the JCE as a result of the resignation of Miguel Angel Garcia as administrator of the Information technology (IT) Department of such institution due to differences in criteria with the current director of such unit, Franklin Frías. However, the members of the JCE minimized the importance of Hipólito Mejia’s claims and assured that in this same week the country will know of a solution to this conflict. “I must say that this is a thing of the past. That word of “fraud” does not exist in the dictionary of the Central Electoral Board. The Board is an institution that, from some time ago until today, everyone knows that it acts facing the sun, with transparency; it has earned a credibility and a trust of the people”, held César Francisco Féliz Féliz, official member. Published by: El Caribe Newspaper, November 22nd 2011

12- Affirms PRSC will decide winner of 2012 elections The president of the Movimiento Consenso Electoral Reformista (CER) bachelor Alexandra Izquierdo considered that the votes of the Reformist Social Christian Party (PRSC) will decide the winner of the next elections of May of 2012 in the second round, as long as the PRSC presents itself with its own candidate. According to the political leader, all of the statistics indicate that the PRSC could obtain between an 8% and a 10% if it presents an attractive formula for the electors and if it is submerged in a growth process at a national level. Izquierdo points to this, starting from the location of preference of the electors of the Reformist Party, which is being measured by the polling firms without having a defined presidential candidate. “The most respectable opinion polls grant up to a 5% to the PRSC without having a candidate, which indicates that in two or three months the organization could comb the country in the hands of the candidate that appears in the voting ballot and place itself in an important place in face of the presidential elections of may 2012”, she said. Published by: Listin Diario Newspaper, December 5th 2011


NOVEMBER

2011

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>Legislative Aspects< 13- Agriculture Reform Law obstruct growth of exports The laws governing the national agricultural system are so obsolete that they damage the production and the export capacity of the Dominican Republic, affirmed the president of the Commission of Agricultural Matters of the Dominican Republic Senate, Amílcar Romero. The Senator Romero (PLD-Duarte) pointed that the problem arises because of the production of the farms is not firmly guaranteed by current controls. However, the is confident that before the next January of 2012 the Congress will approve a law that will modernize the sector and increase the level of quality and safety control in the transfer of products from the farms, which will facilitate the placement of local products in the international market. Published by: Hoy Newspaper, November 20th 2011

14- US Citizens will need to report accounts in the DR The banks that operate in the Dominican Republic that do not inform the Government of the United States about the accounts held by American citizens, run the risk that when the Foreign Accounts Tax Compliant Act enters into force, they are withheld a 30 percent of the resources that, through different sources, they receive from United States financial institutions. The withholding would apply both for the funds from clients of the Bank, as well as funds of the same bank or of their investments in the United States. The aforementioned Law would enter into force in approximately one year. Published by: Hoy Newspaper, 23 de November 23rd 2011

15- Subero warns over changes to the Code The president of the Supreme Court of Justice of the Dominican Republic (SCJ), Jorge Subero Isa, warned that the 75 amendments that were approved in first review reading of the Dominican Code of Criminal Procedure (CPP), as well as those approved to the Code of Minors, should not be in confrontation with the guaranteeing spirit of the Dominican Republic Constitution and international agreements. Subero Isa said that it will be a question of time so that the country realizes if the problem of violence and criminality is resolved with the increase of the sanctions or if it is caused by the society. “In no place in the world the increase of sanctions has contributed to reduce violence, or delinquency, but I respect the right that the National Congress has in introducing the amendments that it considers appropriate”, he emphasized. Published by: Listin Diario Newspaper, November 23rd 2011


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