Cablegate: Santo Domingo Economic-Political Roundup,

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E.O. 12958: N/A
TAGS: EAIR ELAB EFIN ECON PGOV VE PM CA DR
SUBJECT: SANTO DOMINGO ECONOMIC-POLITICAL ROUNDUP,
SEPTEMBER 17, 2008

(U) In this edition of the roundup:

1. Open Skies Agreements with Panama and Canada
2. U.S. Company Purchases Airport Operations
3. Bank Fraud Conviction Upheld
4. Venezuela: Scandal Over Houses Donated to Storm Victims
5. Unions Press for Wage Increase

1. (U) Open Skies Agreements with Panama and Canada

The Dominican Republic recently signed open skies agreements
with Panama and Canada. Civil Aviation Board President Luis
Rodriguez told EconOff that the Dominican Republic is also
negotiating an agreement with Chile. He said that the
Dominican Republic is looking to increase air traffic to the
island to boost tourism, among other objectives. Rodriguez
added that he hopes to see foreign airlines use the Dominican
Republic as a jumping-off point for flights between the
Americas and Europe and Canada.

2. (U) U.S. Company Purchases Airport Operations

On September 9, U.S. private equity company Advent
International announced that it had acquired Aerodom, the
Dominican airports operator, from the Hazoury Group,
Vancouver Airport Services, and other local investors. The
value of the transaction was estimated to be US$400 million.
Aerodom has a 30-year concession contract with the Dominican
government and the Airport Commission to develop, operate,
and mange six airports in the Dominican Republic. According
to Advent, Aerodom's existing management and Vancouver
Airport Services will continue to run the company. Advent
told the media the company plans to invest over US$1 billion
in the airport system over the next five years.

3. (U) Bank Fraud Conviction Upheld

On September 11, the National District Court of Appeals
upheld the August 2006 conviction of Bancredito President
Manuel Arturo Pellerano and Vice President Juan Felipe
Mendoza Gomez for the fraud which led to the collapse of the
bank in 2003. The court sentenced them to eight years in
prison, an increase from the original sentence of three
years. The defendants have not yet said whether they will
appeal the case to the Supreme Court.

4. (SBU) Venezuela: Scandal Over Houses Donated to Storm
Victims

On September 16, President Fernandez fired the appointed
Governor of Monsenor Nouel Province, Nestor Melenciano. The
President's action, announced by decree without further
explanation, comes after the Venezuelan Ambassador, Francisco
Belisario Landis, wrote to the Dominican Government to
protest the GODR's handling of Venezuela's donation of 100
homes to the province's victims of Tropical Storms Noel and
Olga. In the letter, which was leaked to the media, Landis
accused Melenciano of turning homes over to occupants without
using the proper process for designating beneficiaries.
Separately, Narciso Isa Conde, a far-left Dominican
politician and public supporter of Colombia's FARC guerillas,
criticized other leftists for their role in the housing
allocation. Isa Conde told the media that activists such as
Fernando Pena had interfered in the designation of
beneficiaries for "personal reasons," which damaged the
effort for "political solidarity" (a presumed reference to
relations with Venezuela).

5. (U) Unions Press for Wage Increase

The National Council of Union Unity (CNUS), a labor
confederation, is pushing hard for a private sector wage
increase and states that it will organize protests to press
home its demands. CNUS cites the high cost of food,
transportation, and electricity to justify is wage proposal,
and notes that most government workers received a 15 percent
raise in August. Minister of Labor Max Puig, who has been in

office for only one month, told the press that the Government
would not intervene in the dispute, but rather will play the
role of mediator. The last pay increase occurred in April
2007, when labor unions and business groups negotiated a deal
that raised the minimum wage by 15 percent and increase
salaries by 5 percent for all other private employees earning
30,000 pesos (approximately US$1,000) per month or less.

(U) Please visit us at
http://www.state.sgov.gov/p/wha/santodomingo/
BULLEN

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