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Speaking during the Business Forum held at Casa de Campo on Saturday 28 February, Hacienda Minister Vicente Bengoa presented an overview of the global financial crisis and outlined its effects on the DR. He described the crisis as the perfect crisis in the style of the perfect storm. He said that it was a crisis with a pronounced decline in consumption, investment, tax revenues for governments, lending by banks, and trade, and that to make matters worse, the patient is not responding to known treatments. He stressed that this was very different to the crisis of the 1930s that was based on the real economy, and resulted from overproduction. The crisis of 2008 has happened on the heels of 20 years of maximum growth and economic stability, a period of abundance where regulations and controls were dismantled, giving way to the bubble economy.
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He said that during the first [...]

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The Economist’s 2009 financial forecast for the DR includes some grim predications, including the possibility that that country’s economy (GDP) could contract by 0.8% as external conditions worsen. According to the report, the deceleration of domestic demand will intensify. However, there is expected to be a 2.3% growth in 2010, which will lead to a slow economic recovery. The Economist reports that After dropping sharply in November and December to end 2008 at 4.5%, annual inflation will continue to fall in early 2009, but will end the year at 6.5% as the peso depreciates. Inflation will average 8.6% in 2010. The Economist points out that President Leonel Fernandez’s administration’s ability to meet its macro-economic goals will be limited by a severe economic downturn and structural weakness in the government’s accounts.
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a href=http://www.economist.com/countries/DominicanRepublic/profile.cfm?folder=Profile-Forecastwww.economist.com/countries/DominicanRepublic/profile.cfm?folder=Profile-Forecast/a

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The general strike planned by community organizations in Montecristi was averted after Public Works Minister Victor Diaz Rua promised to complete the construction of roads in surrounding areas. Diaz said that previous road construction contracts would be rescinded for failure to complete the roads. The Mao-Guayubin, Las Matas de Santa Cruz-Cruce de Copey-Manzanillo, Navarrete- Esperanza and the Montecristi road will all be repaired. The Guayubin-Duarte and Guayubin-Juan Gomez roadways will also be repaired. Diaz promised that more funds would be made available in order to speed up the process.

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Complete the Santo Domingo agricultural produce market (MercaSantoDomingo).
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Implement the Training Program for Rural Youth, to train and encourage young people to stay in rural areas.
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Increase in funding to National Milk Council (Conaleche) from RD$10 to RD$20 million a month.
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Send to Congress bill for approval of Farming Insurance for RD$500 million to quick-start the program.
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Construction of Proindustrial industrial complexes for developing small, medium sized companies.
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Issue a decree for the investment single window mechanism, to simplify red tape for investors so they only deal with one government entity.
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Strengthen government initiatives aimed at securing land titles.
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Lobby for approval of the Public Works Concessions Bill to secure new financing for infrastructure construction.
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Send a bill to Congress on updating free zone legislation within the framework of DR-CAFTA and the bill that creates the National Quality System.
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Send a [...]

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Bulevar Turistico del Este (in Punta Cana)
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Bridge over Soco River
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Sabana de la Mar-Miches highway
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Bayaguana-El Puerto-Hato Mayor highway
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Constanza-Duarte-Casabito highway
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Jarabacoa-El Rio-Constanza road
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National Road Paving Plan
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Expansion of the San Cristobal-Bani highway
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San Juan-Batey II-Barahona highway
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Autopista del Coral from La Romana airport to Punta Cana Airport
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Construction of eight community colleges - four of which were completed in Puerto Plata, Santiago, Maria Trinidad Sanchez and La Altagracia. In 2009 it is planned to complete one in Bonao, Barahona, San Juan de la Maguana and Valverde, Mao.
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At the UASD in Santo Domingo, completion of the dining hall serving10,860 people per day, administrative tower, parking building, and research and innovation center, as well as remodeling the engineering and architecture, sciences, law and dentistry schools.
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Continued expansion of the community technology centers implemented by the First [...]

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In his state of the nation address on Friday, 27 February, President Leonel Fernandez also announced that he had signed a bill convening the Constitutional Revisory Assembly, which will begin the modification of the Constitution within the next 15 days.
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Hoy reports today that since none of the three political parties with representation in Congress has enough votes to impose a reform of the Constitution, inter-party support would be necessary. The ruling PLD has 120 representatives, and has ample room for maneuver to seek the needed support for the desired revisions.
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There are 178 deputies and 32 senators, or 210 members in Congress. Of the 178 deputies, the PLD has 96, the PRD has 60 and the PRSC has 22. Of the 32 senators, 24 are of the PLD, 6 are PRD and 2 are PRSC.
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The decisions will be taken by a majority of two-thirds of [...]

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The president of the National Business Council, Lisandro Macarrulla welcomed the speech and said it was in tune with the demands of Dominican society.
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Ricardo Bonetti, spokesman for the National Association of Young Entrepreneurs said that the speech was positive, while pointing out that the country’s economic reality of the country is more negative than the situation presented by the President, as reported in Diario Libre.
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Manuel Cabrera, of the Association of Industries of Herrera, described the speech as encouraging.
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Adriano Miguel Tejada of Diario Libre called it a surrealist speech where in contrast to a state of the nation, a campaign or an inaugural speech, the President used the crisis as a platform to launch a nirvana of promises that seem to ignore the present state of the government’s finances. He observed that in the country the government operates with resources that appear to be beyond [...]

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In his state of the nation address on 27 February, President Leonel Fernandez sent an optimistic message to Dominicans, saying that the country was weathering the storm of the current financial crisis and that there are positive prospects ahead.
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For the most part, his speech was a long list of statistics and promises, including the following:
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In 2008, the DR’s Gross Domestic Product was up 5.3%, compared to 4.6% average for Latin America and the Caribbean, and the world average of 3.4%.
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Inflation ended at 4.52% (the lowest in Latin America), when forecasts were for 12%.
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Foreign investment totaled a record US$2.88 billion, balancing the effects of increases in fuel, raw materials and inputs.
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Remittances were US$3.1 billion, up 2.1%, compared to US$3.04 billion in 2007.
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Several light manufacturing areas showed growth: electronic products 13%, pharmaceuticals 5.4%, jewelry 11%, cigars 9.5%, agro-industrial 7%. Jobs [...]

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The World Bank is expected to lend US$413 million.
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Increase this year’s Education Ministry budget by RD$4.09 billion, to be funded by multilateral organizations, to reach the target 4% of Gross Domestic Product investment in Education.
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The DR expects to receive US$829 million from the Inter-American Development Bank (IDB). Large portions of these funds will go towards adjusting the budget and on supporting education, health, energy and potable water programs.
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The government also expects to borrow from:
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The Andean Development Corporation: US$95 million.
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Central American Economic Integration Bank: US$50 million
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PetroCaribe: US$300 million
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National Economic and Social Development Bank (Brazil): US$100 million
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Spanish Government Funds (FAD): US$205 million
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Increase in financing for Agriculture bank using RD$3.6 billion of the BNV funds for agriculture.

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Today, President Leonel Fernandez leaves for Havana, Cuba on a five-day official visit during which he will attend the XI International Meeting of Economists. Eight Nobel Prize winners will be taking part in the discussions. The inauguration for the event is at 3pm.

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