Weekly Report - 30 March 2004

DOMINICAN REPUBLIC | Foreign investment on the rise. Last year, according to the Centro de Exportación e Inversión (CEI), foreign direct investment (FDI) slightly exceeded US$1bn — 9.5% more than in 2002 — and helped create 12,550 jobs. This happened against a backdrop of GDP contracting by 0.4% and unemployment on the rise. Just over a quarter of the FDI went to tourism, as sector which grew by 29.6% in 2003 and contributed 8% of GDP. For this year the CEI predicts an FDI inflow of US$2.75bn and the creation of 15,000 jobs.

DOMINICAN REPUBLIC | Power shortage going political. Ramón Cruz, superintendent of electricity, is accusing the power distribution firm AES EdeEste of using blackouts to `blackmail' the government into paying more in hard currency. `The blackouts,' he says, `show a lack of responsibility on their part; they are intended to harm the government.' AES EdeEste is the only remaining private power distributor, responsible for about a third of the country's power supply. In 2003, the government bought back Unión Fenosa, after it cut off the supply as a means of forcing payment. Blackouts in the area formerly served by Unión Fenosa have been reduced considerably since the renationalisation.

ANTIGUA & BARBUDA | WTO rules against US. The WTO has ruled, provisionally, that a US ban on Internet gambling breaches its rules, as argued by Antigua & Barbuda. An interim report states that Internet gambling is covered by the agreement on services, of which the US was a prime promoter. The office of the US Trade Representative has served notice that it will appeal. Antigua is one of the centres for Internet gaming; US residents are reckoned to account for more than 65% of the business.

HONDURAS | FDI upturn expected. Camilo Atala, the minister in charge of investment promotion, predicts that Honduras, one of the three poorest countries in Latin America, will this year attract about US$700m of FDI, and that this will be instrumental in achieving the GDP growth target of 3.5% to 4%. About US$300m is expected to go into the electricity sector, and US$150m into telecommunications.