Identifier
Created
Classification
Origin
05SANTODOMINGO1731
2005-03-30 19:06:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Santo Domingo
Cable title:  

DOMINICAN SENATE ACTS ON BOND BILLS; MORE REMAINS

Tags:  PGOV EFIN DR 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 SANTO DOMINGO 001731 

SIPDIS

SENSITIVE

STATE FOR WHA, WHA/CAR, WHA/PPC, WHA/EPSC;
NSC FOR SHANNON AND MADISON;LABOR FOR ILAB;
USCINCSO ALSO FOR POLAD; TREASURY FOR OASIA-LCARTER
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION
USDOC FOR 3134/ITA/USFCS/RD/WH; DHS FOR CIS-CARLOS ITURREGUI

E.O. 12958: N/A
TAGS: PGOV EFIN DR
SUBJECT: DOMINICAN SENATE ACTS ON BOND BILLS; MORE REMAINS
TO BE DONE

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 001731

SIPDIS

SENSITIVE

STATE FOR WHA, WHA/CAR, WHA/PPC, WHA/EPSC;
NSC FOR SHANNON AND MADISON;LABOR FOR ILAB;
USCINCSO ALSO FOR POLAD; TREASURY FOR OASIA-LCARTER
USDOC FOR 4322/ITA/MAC/WH/CARIBBEAN BASIN DIVISION
USDOC FOR 3134/ITA/USFCS/RD/WH; DHS FOR CIS-CARLOS ITURREGUI

E.O. 12958: N/A
TAGS: PGOV EFIN DR
SUBJECT: DOMINICAN SENATE ACTS ON BOND BILLS; MORE REMAINS
TO BE DONE


1. (U) In the evening of March 29, the Dominican Senate
unanimously approved all but one of the bond authorizations
needed to ensure compliance with the nation,s 2005 budget
and the IMF standby accord. The authorization to renegotiate
external (sovereign) bonds issued in 2001 and 2003 will now
become law, and the internal bond authorizations will go to
the lower house for approval. The one bond bill still
pending -- to enable redemption of internal bonds issued in
1999 -- will await receipt of an explanation of the interest
rate on the new bonds requested by Senator Ramn Alburquerque
(PRD). The Senate also approved a World Bank loan for
technical assistance to the financial sector and an IDB loan
to strengthen bank supervision.


2. (U) The World Bank technical assistance loan for the
electrical sector did not come up in the session. Failure to
pass this would endanger the USD 150 million loan from the
World Bank planned for the sector.


3. (SBU) Prior to the session, opposition PRD senators got
the green light from PRD president Vicente Sanchez Baret.
The Senate assembled with a quorum of 30 out of 32,
representing all four political parties. But Senate PRD
spokesman Anibal Garcia Duverge warned that passage of the
bills did not absolve the government of rehiring public
teachers, agronomists, and health care professionals whose
recent dismissals had been protested by the PRD.


4. (SBU) Sen. Alburquerque,s posturing on the one bond bill
is attributable to his candidacy to become the next party
president, in a vote of PRD members to be held soon. The
five-week blockage of Senate legislation that ended yesterday
has been resolved, but does not bode well for
executive-legislative cooperation until August 2006, when a
newly elected Congress - - perhaps less dominated by one
opposition party - -will take office.

Background
- - - - - - - -


5. (SBU) On the agenda at the March 29 Senate meeting were
bills authorizing external bond restructuring, issuance of
internal bonds (worth RD pesos 8.282 billion, or USD 285
million),a World Bank loan for USD 7.3 million for
technical assistance to the electricity sector, another USD
12.5 million World Bank loan for technical assistance to the
financial sector, and an IDB loan for USD 6.6 million to
strengthen banking supervision.


6. (SBU) On March 21, the opposition PRD for the third time
since February 22 had used its control of Congress to block a
vote on government-proposed legislation. The PRD has
continued to smart over government investigations into
alleged wrongdoing by officials of the previous
administration and what some in the party believe to have
been politically motivated firings of public teachers,
agronomists, and medical personnel after President Fernandez
(PLD) took office last year. Despite an understanding that
Fernandez would review the dismissals and re-hire some of the
former employees, the PRD maintains that no action has been
taken. Ex-president Hiplito Mejia (PRD) on May 18 announced
a "truce" with Fernandez to ensure "governability" and
declared a recess on political activities during the local
Easter holidays, but let it be known that Congressional
business should also wait until the following week.


7. (SBU) Senate President Andres Baustista (PRD) met with
the government March 22 and obtained new assurances of the
reinstatements. Then he managed to convoke 17 of 32 senators
to approve the delayed bills; the remaining 11 PRD senators
stayed away on Mejia,s orders. Alerted that the session was
about to begin, Mejia cell-phoned another PRD senator - - a
kinsman - - who was in the session and told him to leave.
The senator walked out, followed by two others, leaving 14 in
the chamber and forcing Bautista to postpone the session
until yesterday. The day after the walkout, March 23,
Finance Minister Vicente Bengoa and Technical Secretary of
the Presidency Temistocles Montas warned that approval of the
bond bills would be essential for compliance with the
nation,s IMF program and payment of Paris Club obligations.


8. (U) This piece and others in our series can be consulted
on our classified SIPRNET site
http://www.state.sgov.gov/p/wha/santodomingo/ along with
extensive other material.
MINIMIZE CONSIDERED
HERTELL