US embassy cable - 05SANTODOMINGO1731

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