Carolina Mejía, hija del Presidente, quien tiene que ver con los asuntos económicos y comerciales del Gobierno dominicano, apoyada por el Canciller, respondió que el Gobierno dominicano hacía lo más posible por analizar la situación y tomar acciones correctivas para cumplir con los requisitos del acuerdo standby del FMI
A continuación los cables de Wikileaks en Republica Dominicana completos de la embajada de Estados Unidos al Departamento de Estado, tanto en inglés como en español:
C O N F I D E N T I A L SECTION 01 OF 04 SANTO DOMINGO 005992
SIPDIS
HONG KONG FOR PATRICIA FIETZ
E.O. 12958: DECL: 10/24/2013
TAGS: DR, EFIN, ETRD, MARR, MX, PGOV, PHUM, PREL, SMIG, SP, VE, XF, KCOR
SUBJECT: DOMINICAN REPUBLIC FM ON ECONOMIC, INTERNATIONAL,
AND BILATERAL ISSUES
REF: A. CARACAS 5391 (NOTAL)
B. SANTO DOMINGO 5946 (NOTAL)
C. SANTO DOMINGO 5786 (NOTAL)
D. USUN NEW YORK 2331
E. SANTO DOMINGO 5391 (NOTAL)
Classified By: Charge Lisa Kubiske for reasons 1.5 (b) and (d).
1. (C) Summary: Foreign Secretary Guerrero Prats, at a lunch
hosted by the Ambassador October 7, said the GODR was trying
through diplomatic channels to restore normal relations with
Venezuela after President Chavez downgraded them in
September. Trade/economic adviser (and daughter of President
Mejia) Carolina Mejia said the GODR was doing its utmost to
comply with IMF requirements in the face of severe financial
problems. She blamed traditional corrupt behavior in
business for the massive BANINTER banking scandal. The
Ambassador and DCM Kubiske stressed the need to prosecute key
suspects in the scandal and officials who may be trafficking
in persons or smuggling aliens. The foreign secretary
generally agreed with our stance on returning full authority
to the people of Iraq and said the GODR was reviewing a draft
SOFA with Kuwait to support Dominican troops in the region.
He expressed optimism about WTO and hemispheric trade
negotiations. End summary.
2. (U) Ambassador Hertell hosted a lunch October 7 for
Secretary of State for Foreign Relations Francisco Guerrero
SIPDIS
Prats, U/S of State for Foreign Relations Miguel Pichardo,
U/S of State for Foreign Relations in Charge of Trade
Negotiations Santiago Tejada, Acting Director of
International Organization Affairs Jesus Hernandez, and
FTAA/monetary affairs/TIC adviser Carolina Mejia. DCM
Kubiske, CG Marshall, ECOPOL counselor, poloff, and econoff
also attended. (Note: We understand that Tejada has just
been reassigned as the General Manager of the Central Bank.
IO Director Hernandez is now permanently assigned to his
position.)
IMF Agreement
- - - - - - -
3. (C) The Ambassador expressed concern that the IMF team in
town earlier in the week had departed after a single day.
Carolina Mejia, the President's daughter who is involved in
GODR economic and trade issues, seconded by the foreign
secretary, replied that the government was doing its utmost
SIPDIS
to analyze the situation and take corrective action to comply
with the requirements of the IMF standby agreement. Some
adverse events were beyond the administration,s control )
e.g,. a recent decision by the Supreme Court that the use of
a presidential decree to impose a 5 percent tax on exports
and 2 percent on imports was unconstitutional. The foreign
secretary commented that this was an example of judicial
SIPDIS
independence typical of mature democracies. Carolina Mejia
added that an IMF staffer was in country, and as soon as the
GODR assembled the required data, the IMF team would return.
(Note: We understand that one or several IMF staff are still
here, working with the GODR on an unofficial basis.)
Carolina Mejia said that the country desperately needed the
United States' assistance in seeking prompt disbursement from
the IFIs.
Relations with Venezuela
- - - - - - - - - - - - -
4. (C) On GODR efforts to restore relations with Venezuela
after President Chavez,s withdrawal of his ambassador and
cutoff of oil supplies to the Dominican Republic (Ref A),
Guerrero Prats referred to President Mejia,s public
statement October 6. Guerrero Prats said that the Foreign
Relations Secretariat is looking into Chavez,s public
allegations of anti-GOV plotting here, that the foreign
secretary has received instructions on this matter, and that
SIPDIS
"I do not discuss diplomatic issues on television.8
Guerrero Prats expressed regret that Chavez in early October
reiterated the charges he had made in mid-September when
downgrading relations with Santo Domingo.
5. (C) According to the foreign secretary, the GOV after
months of levying accusations in the media sent a diplomatic
note August 4 citing "denuncias" of the anti-GOV plots --
without furnishing any evidence -- and requesting
investigation by the GODR. Santo Domingo, by diplomatic note
22 days later, asked Caracas to furnish &proof8 and offered
to investigate on the basis of any evidence that might be
presented. So far the GOV has failed to provide specifics.
Guerrero Prats and his colleagues expressed their desire to
normalize relations with Venezuela, referring to a history of
close ties and the desirability of having the option to
resume oil imports -- even though the Dominican Republic is
now able to tap alternative suppliers. (Note: The two
countries have been discussing the issue in diplomatic
channels, but the oil cutoff remains in effect.)
Prosecution of Corrupt GODR Officials
- - - - - - - - - - - - - - - - - - -
6. (C) Earlier, as guests were gathering, the Ambassador,
DCM, and Consul General spoke privately with the foreign
secretary, urging investigation of a former Dominican consul
SIPDIS
in Panama named Arias and the current director of the
Dominican commercial office in Hong Kong for involvement in
visa fraud and trafficking in persons. (Note: Embassy had
previously provided details of this suspected malfeasance to
the Foreign Secretariat.) Guerrero Prats replied that no one
had supplied evidence in these cases, only supposition. With
evidence, he said, he would pursue them. During the lunch,
the DCM underscored the importance we attach to the GODR's
pending prosecution of Dominican Congressman Guillermo
Radhames Ramos Garcia (of the ruling PRD), a suspected
smuggler of Asian nationals from Haiti into the Dominican
Republic. (Note: The Supreme Court has begun hearing this
case, as reported Ref B.)
Iraq
- - -
7. (C) The Ambassador noted U.S. circulation of a draft
resolution on Iraq in the UNSC October 2, on achieving a
political transition as quickly as possible and returning
full authority to the Iraqi people, and the Secretary's
emphasis in comments to the press on a major role for the UN.
The Ambassador asked the GODR to support this proposal. He
also expressed appreciation for the bravery of Dominican
troops in the stabilization force, who had taken fire twice
in early October, without casualties. Guerrero Prats
referred to his September 30 UNGA speech, in which he urged
restoration of sovereignty in Iraq.
SOFA with Kuwait
- - - - - - - - -
8. (C) The Ambassador expressed concern about the slow pace
of negotiations on a status of forces agreement (SOFA)
between the Dominican Republic and Kuwait. U/S Pichardo
replied that the GODR had proposed changes to the Kuwaiti
draft text and had passed them along to the Secretariat of
the Armed Forces for comment. The Ambassador stressed the
urgency of concluding the SOFA, to facilitate troop rotation
and treatment of any casualties from the Dominican unit in
Iraq. (Note: As reported Ref C, Embassy continues to work
closely with Foreign Secretariat Legal Adviser Jorge Santiago
to answer the GODR's questions on the draft SOFA.)
Trade and the WTO
- - - - - - - - -
9. (C) The Ambassador and DCM complimented the GODR for its
positive contribution at the Cancun WTO ministerial.
Guerrero Prats agreed that the Dominicans have won respect
for their consistent support of free trade and for promptly
submitting required documents in any negotiation. U/S
Ambassador Santiago Tejada took a more optimistic view of the
Cancun outcome. He said that contrary to appearances,
Brazil, leading the developing nations that opposed U.S. and
European positions, had been isolated in the Western
Hemisphere and that Mercosur and the Andean Group had been
deeply divided. Tejada said that there had been consensus on
at least two of the Singapore issues, which boded well for
progress at the next WTO meeting in Geneva December 15. He
added that the GODR was surprised by the early termination of
the ministerial, explaining that from his perspective furhter
negotiations might have been fruitful.
10. (C) The Ambassador said that U.S. authorities looked
forward to negotiation of a bilateral trade agreement. The
Foreign Secretary replied that the GODR already agreed with
75 percent of the draft and believed the remainder could be
finished within the timeframe (early 2004) necessary for
&docking8 with a Central American Free Trade Agreement
(CAFTA).
Banking Scandal
- - - - - - - -
11. (C) Carolina Mejia blamed the massive collapse of
BANINTER and two other banks on longstanding behavior
patterns among wealthy Dominican businessmen, some of whom
were "thieves" ("ladrones"). She said this was an old Latino
scam ) profiting from other people,s money. The government
had done its job properly, she asserted. (Former) GODR Bank
Superintendent Alberto Atallah and the U.S. accounting firm
Price Waterhouse approved the banks, performance based on
the data the firm had received, but many illegal transfers
were hidden from the auditors. The impact of the Baninter
collapse in spring 2003, followed by the takeover of two
smaller banks due to insolvency, has been &very hard,8 she
commented, but perhaps this ordeal was necessary to force the
country to modify the corrupt behavior. According to Mejia,
the fault lay in the society, not the government. To create
the kind of society that younger Dominicans such as she
wanted, the government would have to prosecute the persons
responsible for the banks' collapse. The DCM strongly
concurred with this point.
UNGA
- - -
12. (C) Regarding the UNGA special emergency session on the
Middle East September 19 (Ref D), the Ambassador asked why no
GODR representative had attended or voted. The Dominican
absence had been noticed in Washington. The foreign
secretary said the Dominican Republic prefers to vote within
SIPDIS
blocks on these types of measures and suggested that the USG
should have approached regional groupings such as GRULA or
the Rio Group to elicit support for the U.S. position, rather
than relying on bilateral demarches. If this is not
possible, he said, the GODR varies its voting behavior on
unhelpful resolutions ) sometimes voting no, sometimes
abstaining, and sometimes being absent/not voting.
Presidential Visit to Spain
- - - - - - - - - - - - - -
13. (C) The foreign secretary said that President Mejia's
September 15-23 visit to Spain and other countries had run
into glitches, particularly in Spain where the media
emphasized GOS leaders' criticism of the Dominican Republic's
treatment of foreign investors. This referred to Spanish
investors' problems in the electricity sector and the GODR's
October 1 renationalization of two power distribution firms
(Ref E). Guerrero Prats said he had publicly thanked the
Spanish brigade commander in Iraq for having pressed for
delivery of equipment to the approximately 300 Dominican
troops deployed with the stabilization force. (Note: The
equipment was delivered promptly.)
President Mejia,s Government
- - - - - - - - - - - - - - -
14. (C) Carolina Mejia said that when her father Hipolito
Mejia assumed office as president three years ago, he had no
idea what challenges his administration would face. In her
view, his election in 2000 was providential. Confronted with
severe economic problems, he has tried to address these
issues and give the country its best government ever. She
said his controversial bid for reelection in 2004 is
necessary to enable him to finish the job.
Draft Dominican Law on Migration
- - - - - - - - - - - - - - - - -
15. (C) The Ambassador inquired about progress on a draft
migration law, designed to ensure fair treatment for one
million Haitian immigrants present in the Dominican Republic,
and urged expeditious handling of the legislation. He noted
that Congressional leaders had complained of a delay in
receiving comments on the bill from the Secretariat of
Foreign Affairs. The Secretary said the comments were ready
and he or U/S for Consular Affairs Wenceslao Guerrero Pou
would offer to brief the relevant committees. (Note: The
bill has been passed by the Chamber of Deputies, but is still
pending in the Senate.)
Comment
- - - -
16. (C) The lunch afforded an opportunity for the Ambassador
to press the Foreign Secretariat -- and the President through
his daughter -- on pending bilateral issues, which the
Embassy will continue to pursue. These include the GODR's
IMF commitments, prosecution of key suspects in the banking
scandal, and legal action against officials who may be
trafficking in persons or smuggling aliens.
17. (C) Concerning the Palestinian UNGA resolution, on the
date of the special session on the Middle East, Foreign
Secretary Guerrero Prats had to deal with the mini-crisis
SIPDIS
with Venezuela and thus delayed his arrival in New York. He
may not have sent guidance to the GODR permrep, who
consequently was left free to avoid the controversial
resolution. Under other circumstances we believe the GODR
might have attended but abstained.
KUBISKE
12526 4 de diciembre, 2003
C O N F I D E N T I A L SECTION 01 OF 03 SANTO DOMINGO 006999
SIPDIS
DEPT FOR WHA/CAR, WHA/PPC, WHA/EPSC, EB GREENWOOD, EB/OMA/
RFRISBEE; DEPT PASS USAID/LAC, USTR; NSC FOR HCRUZ;
TREASURY FOR NLEE, RTOLOUI, LLAMONICA; SECDEF FOR OSD;
JUSTICE FOR OIA
E.O. 12958: DECL: 12/03/2013
TAGS: EFIN, ECON, ECIN, DR
SUBJECT: PRESIDENT MEJIA SETS UP INVESTIGATION TO GET THE
DOMINICAN EXCHANGE RATE RIGHT
Classified By: DEPUTY CHIEF OF MISSION LKUBISKE. REASON 1.5 (B&D)
1. (U) Summary. In a December 2 meeting, President Mejia
insisted that the exchange rate must go down sharply and told
attendees that military and police officers will be watching
exchange houses to detect questionable transactions. Most
exchange houses have agreed not to sell dollars for more than
RD40 to dollar. The Government asserts that it is not
instigating exchange controls but instead wants the rate to
return what it should be -- about 30 to the dollar, according
to some. So-called voluntary agreements to sell dollars at a
set rate have regularly been tried in Dominican history, with
short-lived results. The use of military and police is new.
Mejia has reiterated his commitment to reaching agreement
with the IMF on a revised program. The Central Bank will
publish a communique tomorrow (see final para below),
stressing its aim of deterring criminal behavior. Ambassador
and emboffs raised questions on December with a wide range of
contacts and stressed the impact that the poorly explained
initiative could have on business confidence and the value of
the peso. Exchange trading is routine but thin today, at RD
40 for the dollar. Dollars may become even more scarce in
coming days. End summary.
BACKGROUND
2. (SBU) After the peso broke the RD$40 per dollar barrier
again in November and continued to weaken, rumors began to
surface in late November about GODR plans to address the
crisis. Receiving increasing complaints about the
depreciation of the currency, the President publicly blamed
it on "manipulation" by currency trading houses - which
handle roughly 70 percent of all foreign exchange trading in
the Dominican Republic -- and issued warnings about possible
arrests for illegal hoarding of dollars.
A SHOW OF FORCE
3. (C) Immediately following a meeting with his monetary
board December 2, President Mejia harrangued a large meeting
of private and public sector representatives on the
"unacceptable" level of the exchange rate, asserting that the
IMF agreement being revised would become impossible if the
dollar remained at 45 pesos. The palace had convened
exporters, tourism representatives, local bankers and foreign
exchange traders; Mejia was flanked by administration
officials, all of the military chiefs, the Governor of the
Central Bank, and police officials. He announced the
formation of a commission to investigate abuses in the
exchange sector, composed of director of internal taxes
Teofilo Tabar, Secretary of the Armed Forces General Jose
Miguel Soto Jimenez, former national police chief under
Balaguer's administration General Rafael Peralta Guerrero,
and former national police chief during the Fernandez
administration (and the first year of the Mejia
administration) General Pedro de Jesus Candelier. We
understand that a banking superintendency official will also
participate. The President's tough intent was clear.
Previous governments have resorted to jawboning and temporary
pacts on the rate; this is the first time that the military
and police have been associated with one. Embassy does not
know whether the President's new commission has received any
charter or written instructions for its work, nor what
exactly it will do.
4. (C) The Dominican financial team has been examining
irregularities in the exchange system over the last several
weeks. Among concerns which they had notified to Mejia were
avoidance of taxation by exchange houses, operation of
unlicensed exchange operations, and some large transactions
by unknown individuals, in the range of USD 5 to 10 million.
Banking Superintendent Julio Cross and presidential Technical
Secretary Carlos Despradel have assured us that these
SIPDIS
suspicious activities are to be the focus of the
investigations. Despradel says that banking Superintendency
personnel will be sent to at least some of the exchange
houses to inspect and watch their operations. The GODR
denied reports that uniformed military personnel would be
posted at branches of the four major currency trading houses,
though it acknowledged having been tasked to identify the
location of exchange houses. During an afternoon visit to
the leading exchange house, Embassy staff saw no military
presence; Embassy Defense Attache learned from a military
contact that no order has been issued on the subject.
5. (C) Bankers and currency traders acceded "voluntarily"
under this pressure to cap the price of the dollar at 40
pesos. In the discussions some exchange house
representatives suggested that dollar purchases be set at
RD38/1 by December 7 and then reduced progressively by 2
pesos per week until reaching a level between RD30 to RD32
per dollar. Banking Superintendent Cross dismissed this
scheme, commenting that the proposal was evidence that
manipulation was already occurring in the markets.
MONETARY BOARD INSIDER
6. (SBU) Monetary Board Member Sonia Guzman (GODR Secretary
of Industry and Commerce) commented to Econoff December 3
that the IMF had made its most recent calculation for a new
standby agreement based on a projected exchange rate of RD40
per dollar. She confirmed that Mejia had said in the meeting
that there was zero chance of signing an agreement if the IMF
had calculate the rate again due to depreciation. Guzman
said that Mejia is committed to reaching agreement with the
IMF "no matter what the political costs," but that to do so
the GODR had to bring the exchange rate under control.
7. (C) Guzman said that Mejia was disgusted at the shortfall
in voluntary contributions provided by exporters and tourism
operators toward fiscal goals. When Finance Minister
Calderon reported contributions at only RD 74 million
(scarcely more than USD 2 million), far short of projections,
Mejia was so infutriated that he ordered the Minister to
return all of the money. (Guzman said she would approach the
President to convince him that the GODR should retain at
least the free trade zone companies' contributions.)
A "VOLUNTARY" RATE
8. (C) Embassy obtained a copy of a circular notice sent out
by the association of exchange houses on December 2 advising
members that the meeting had agreed that the rate would not
exceed RD40, and that "respect for this measure is
obligatory." In fact, banks and exchange houses were posting
rates in this range today -- but volumes were low and some
houses were refusing to deal at all. One operator of a
legitimate exchange house commented that he was not concerned
at all by the enforcement measures (aimed at questionable
operations) or by the rate.
EMBASSY INVESTIGATION AND ADVOCACY
9. (SBU) In the course of December 3 Ambassador and Embassy
officers contacted a wide spectrum of government and private
sector actors, seeking clarification about these events and
stressing the importance of preserving the free functioning
of the exchange markets. Emboffs stressed the need for the
GODR to make clear its measures and intentions in order to
prevent the gathering alarm. Presidential Technical
Secretary Despradel, in a late afternoon visit to the
SIPDIS
Embassy, told Ambassador that in response the government had
thought of issuing a message from the cabinet, but had
settled on a communique from the Central Bank as more
appropriate and easier to complete. He subsequently faxed
the version to the Embassy. To be released tomorrow,
December 4, it emphasizes the GODR adherence to the aim of
free competition in a properly regulated market and advises
of the intention to investigation financial irregularities
such as money laundering. The communique does not address
the "agreed" rate in the market. (See informal translation
below.)
COMMENT
10. (C) Mejia's measures were a triumph of political
grandstanding and a unsustainable approach to the exchange
market. A certain amount of clean-up in the sector will do
everyone some good and could yield tax revenues and fines.
But the President's choice of muscle for the committee was,
in our opinion, a grave mistake. The Armed Forces have no
technical competencies in this area, other than the
intelligence operations of last week to scout out the
location of unlicensed exchange houses. And Mejia's
appointment of Police General Pedro Candelier is a heavy
handed, empty threat of force. (NOTE: Candelier was
notorious for corruption and for tolerating extrajudicial
police killings during his tenure as National Police Chief.)
11. (SBU) Begin text of informal translation of Central Bank
communique to be released on December 4:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-
CENTRAL BANK COMMUNIQUE TO THE NATION
The Central Bank and the Banking Supervision authorities wish
to inform the public concerning the outcome of the meeting of
Tuesday, December 2, in the presidential palace chaired by
the President of the Republic and attended by the monetary,
fiscal and security authorities as well as representatives of
the banks, exchange houses and private sectors which earn
foreign currency.
1. The reunion of the authorities with the sectors
participating in the exchange market had as its aim the
identification of measures to contribute to an environment
favorable to stabilizing exchange operations and normalizing
their functioning, in conformity with the laws regulating the
markets.
In their comments to the press, the principal spokespersons
of the banks and the exchange houses emphasized the interest
they share with the authorities in supporting the elimination
of extra-market factors which prevent the exchange rate from
corresponding to real values.
2. Exchange operations are carried out in the Dominican
Republic in the framework of a free market, with the
assistance and safeguards of measures in the Monetary and
Financial Law and the regulations established by the Monetary
Board. As occurs with any institutionalized market, its
functioning is bound up with the privileges of the agents
participating in the market, which bring with them the duty
to respect established norms and procedures.
3. As in any nation of organized institutions, exchange
operations are supervised by the government authorities and
are carried out according to norms and formal procedures that
must be respected by law. Fundamentally, the market is a
service offered to its clients by entities that are
constituted under law according to principles of transparency
and certified competence.
4. On the other hand, it should be remembered that the
Dominican Republic is signatory to a number of international
agreements and bilateral cooperation agreements which oblige
the country to remain vigilant and to prosecute crimes
considered by the international community to be extremely
serious, including money laundering, whether originated by
narcotics trafficking, tax evasion, financial fraud, or
terrorist financing. These obligations involve
responsibilities that must be complied with not only to
protect its own citizens, but also to contribute to the
security of other nations. With this aim, the appropriate
institutions are investigating exchange operations considered
to be unusual, both for their amounts and because of their
form -- one of the principal themes discussed in the meeting.
5. In conclusion, the monetary authorities confirm once
again their adherence to a system of free exchange and to the
promotion of competition, by means of which they are
confident that stability and necessary transparency will be
re-established in the exchange market, in benefit of all the
clients of its services, the regular functioning of the
productive activity of the nation, and the economic security
of the Dominican people..
(end text)
HERTELL
11647 24 de octubre, 2003
C O N F I D E N T I A L SECTION 01 OF 04 SANTO DOMINGO 005992
SIPDIS
HONG KONG FOR PATRICIA FIETZ
E.O. 12958: DECL: 10/24/2013
TAGS: DR, EFIN, ETRD, MARR, MX, PGOV, PHUM, PREL, SMIG, SP, VE, XF, KCOR
SUBJECT: DOMINICAN REPUBLIC FM ON ECONOMIC, INTERNATIONAL,
AND BILATERAL ISSUES
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