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UNCLAS SANTO DOMINGO 002263 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CAR C WARD AND E JAFFEE 
 
E.O. 12958: N/A 
TAGS: PGOV ECON ENRG KJUS VE DR
SUBJECT: SANTO DOMINGO ECONOMIC-POLITICAL ROUNDUP, OCTOBER 
5, 2007 
 
 
(U) In this edition of the Roundup: 
 
¶1. President Fernandez's UNGA Speech 
¶2. Allegation that Opposition Working Against Security 
Council Bid 
¶3. The Future of the IMF Stand-By Agreement 
¶4. Minister of Finance Visits Venezuela Seeking Increase in 
PetroCaribe Quota 
¶5. Technological Upgrade in Land Titles, Land Use Planning 
 
¶1. (SBU) President Fernandez's UNGA Speech 
 
In his September 27 speech to the UN General Assembly, 
President Fernandez expressed concern over the worldwide rise 
in prices of petroleum and foodstuffs, saying, "We are facing 
a very dangerous situation, one which could result in our 
peoples facing widespread famine and a collapse into extreme 
poverty."  Continuing his discussion of economic issues, 
Fernandez took a swipe at his domestic opposition, the PRD 
party, noting that from 2000 to 2004 (i.e. during a PRD 
administration), "the national currency suffered a 
devaluation of 100 percent."  Fernandez also called for 
reform of the UN's "Cold War" structure, stating that, 
"Dominicans do not understand why, in the 21st century, the 
President of the World Bank must always be an American and 
the Managing Director of the IMF a European."  (Note: We view 
Fernandez's rhetoric as directed at the developing countries 
which hold the most votes in the UN General Assembly.  UNGA 
members will soon choose between the Dominican Republic and 
Costa Rica for a nonpermanent seat on the Security Council. 
End note.) 
 
¶2. (SBU) Allegation that Opposition Working Against Security 
Council Bid 
 
The newspaper "Diario (at) Diario" reported on October 4 that 
the opposition PRD party was working to defeat the 
Government's candidacy for a UN Security Council seat. 
According to the allegations, the PRD, a member of the 
Socialist International (SI), encouraged governments headed 
by other SI member parties to vote for Costa Rica.  The PRD's 
motivation, the report alleges, was to deny President 
Fernandez and his PLD party a prestigious victory prior to 
the 2008 presidential election.  (Note: These allegations 
appeared in a small newspaper and the story has not been 
confirmed.  We report it because, if true, it would be 
troubling that a Dominican political party would attempt to 
block the achievement of an important national UN candidacy.) 
 
¶3. (SBU) The Future of the IMF Stand-By Agreement 
 
The IMF Stand-By Agreement with the Dominican Republic is 
scheduled to end on January 31, 2008.  The GODR has not yet 
indicated whether it will seek to negotiate a new Agreement. 
However, several government officials, including the Finance 
Minister Vincente Bengoa, have commented in the press that 
the DR does not need another IMF accord.  On the other hand, 
private sector organizations such as the Chamber of Commerce 
of Santiago have spoken out in favor of a renewed Agreement. 
Those pressing for a new IMF Agreement argue that it is the 
only way to reign in government spending in the lead up to 
the Presidential elections scheduled to be held in May 2008. 
The local IMF Representative, Eric Offerdal, told visiting 
U.S. Treasury officers that while some government officials 
have privately expressed their support for a new Agreement, 
they do not believe it is politically feasible to negotiate 
an accord before the election.  President Fernandez will make 
the final decision.  Offerdal said the IMF would continue to 
offer technical assistance and policy advice to the GODR even 
if a new Agreement is not signed.  He added that he does not 
expect the government to completely go off track in its 
spending in the lead up to the election.  However, he does 
expect a dip in revenue collection and an increase in 
spending similar to what was seen in advance of the 2006 
congressional elections. 
 
4.(U) Minister of Finance Visits Venezuela Seeking Increase 
in PetroCaribe Quota 
 
The Minister of Finance, Vicente Bengoa, traveled to 
Venezuela on October 2 to request an increase in the 
Dominican Republic's oil quota under the PetroCaribe 
agreement.  Upon his return from Venezuela, Bengoa stated 
that the DR had restored its originally agreed to maximum 
quota of 50,000 barrels per day, which is roughly 30 percent 
of the country's daily consumption of oil, up from the 30,000 
barrels per day it has been importing.  The decision to 
request the increase was motivated by the increasing price of 
oil and the nation's complete dependence on imported supplies 
not only for transportation purposes but also for the 
majority of its electric power generation.  In an important 
change to the DR's PetroCaribe agreement, the reestablished 
quota will include fuel-oil and diesel as well as oil 
imports.  Bengoa's trip comes on the heals of President 
Fernandez's remarks at the UN General Assembly at which he 
stated that the rise in international oil prices threatens 
the Dominican Republic's prospects for development.   In a 
move that should diversify some of the country's reliance on 
imported oil, the U.S. energy company AES Dominicana 
announced plans on October 4 to build a pipeline from its 
natural gas power plant outside of Santo Domingo to the 
Electric Company of San Pedro de Macoris in the southeastern 
part of the country.  This project will convert an older, 
expensive and inefficient oil-fired power plant, which was 
financed by the World Bank, to natural gas and is anticipated 
to reduce costs and pollution emissions once completed in 
approximately 9 to 12 months. 
 
¶5. (U) Technological Upgrade in Land Titles, Land Use Planning 
 
The Supreme Court recently announced a massive upgrade to 
processing of land titles using French-designed GPS 
technology and fixed repeater stations.  This technology 
allows a single worker carrying a portable GPS unit to record 
the exact delineation of plots, which is then automatically 
transmitted to a central government database operated by the 
judiciary's Office for Real Property.  In combination with 
Inter-American Development Bank-funded efforts to convert 
existing paper titles into publicly accessible electronic 
documents, this upgrade should speed legitimate purchases of 
land, increase governmental transparency, and assist in 
quieting title in cases of controversy.  This technology, if 
properly implemented, shows great promise for the first 
serious indigenous attempts to engage in urban planning. 
Military applications are also evident.  (Note: In announcing 
the role-out of this initiative, Supreme Court President 
Subero Isa chose to repeatedly stress the "foreign 
imposition" of a land title system that supplanted the 
previously existing community property regime in the 
Dominican Republic.  While the Haitian "invaders" certainly 
got their due during a lengthy examination of 19th Century 
jurisprudence, U.S. interest in "protecting big sugar 
interests" was repeatedly highlighted by Subero Isa as a 
negative consequence of repeated military interventions in 
the 20th Century during the course of the over two-hour 
event.) 
 
(U) This report and additional information can be found on 
Embassy Santo Domingo's SIPRNET site, 
http://www.state.sgov.gov/p/wha/santodomingo/  
GOUGHNOUR