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88–831PDF 2014

U.S.–DOMINICAN REPUBLIC RELATIONS:

BOLSTERING ECONOMIC GROWTH AND

ENERGY INDEPENDENCE

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

JULY 23, 2014

Serial No. 113–183

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

SEAN DUFFY, Wisconsin 

CURT CLAWSON, Florida 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE

MATT SALMON, Arizona, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

MICHAEL T. MCCAUL, Texas 

JEFF DUNCAN, South Carolina 

RON DESANTIS, Florida 

SEAN DUFFY, Wisconsin 

ALBIO SIRES, New Jersey 

GREGORY W. MEEKS, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

THEODORE E. DEUTCH, Florida 

ALAN GRAYSON, Florida 

(III)

C O N T E N T S 

Page

WITNESSES 

Andre ́s R. Gluski, Ph.D., president and chief executive officer, The AES 

Corporation ........................................................................................................... 7

Mr. Roberto A ́ lvarez (former Ambassador of the Dominican Republic on the 

Council of the Organization of American States) .............................................. 21

Mr. Santiago A. Canton, executive director, RFK Partners for Human Rights, 

Robert F. Kennedy Center for Justice and Human Rights ............................... 29

Flavio Darı ́o Espinal, Ph.D., founder and president, Flavio Darı ́o Espinal 

& Asociados (former Ambassador of the Dominican Republic to the United 

States) ................................................................................................................... 40

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Andre ́s R. Gluski, Ph.D.: Prepared statement ...................................................... 10

Mr. Roberto A ́ lvarez: Prepared statement ............................................................. 23

Mr. Santiago A. Canton: Prepared statement ....................................................... 31

Flavio Darı ́o Espinal, Ph.D.: Prepared statement ................................................ 42

APPENDIX 

Hearing notice .......................................................................................................... 60

Hearing minutes ...................................................................................................... 61

(1)

U.S.–DOMINICAN REPUBLIC RELATIONS: 

BOLSTERING ECONOMIC GROWTH AND 

ENERGY INDEPENDENCE 

WEDNESDAY, JULY 23, 2014

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE WESTERN HEMISPHERE,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:55 p.m., in room 

2255 Rayburn House Office Building, Hon. Jeff Duncan (acting 

chairman of the subcommittee) and Hon. Matt Salmon (chairman 

of the subcommittee) presiding. 

Mr. DUNCAN. A quorum being present, the subcommittee will 

come to order. I will start by recognizing myself on behalf of the 

chairman, Matt Salmon, and the ranking member, to present our 

opening statements. Without objection, members of the subcommittee can submit their opening remarks for the record. I yield 

myself as much time as I may consume to present my opening remarks. 

So on behalf of Chairman Salmon:

‘‘Good afternoon. Welcome to this timely hearing on the 

relationship between the United States and the Dominican 

Republic. I want to thank the ranking member for joining 

me and convening this hearing, in which we will look at 

the economic and energy opportunities the U.S. Congress 

should consider as we move forward with our priorities in 

the Western Hemisphere. 

‘‘Since the 1980s, we have been building a sound economic relationship with the Dominican Republic. Through 

the Free Trade Agreement in force since 2007, we have improved our trade and investment partnership. Since then, 

the Dominican Republic’s economy has grown and the 

United States has remained its largest trading partner 

with trade totalling more than $11.5 billion in 2013. The 

Dominican Republic’s commitment to free trade is welcome, particularly during a time when several regional 

leaders have systematically stifled economic growth, expropriating private companies, while eroding democratic values. I am hopeful that the government in Santo Domingo 

will continue along this path while addressing core human 

rights and labor issues that affect many developing countries. 

2

‘‘The Dominican Republic has chosen the path to prosperity by implementing principles of economic freedom, 

entrepreneurialship, and free trade. However, in order to 

complement these policies, the island should consider increasing its percentage of alternative energy sources to 

supply domestic demand, which will gradually lower its 

energy prices. Currently, the Dominican Republic is highly 

dependent on Venezuelan oil to generate electricity, tying 

its economic growth to the whims of Caracas. This dependence not only affects the Dominican Republic’s long-term 

competitiveness as high energy costs deter foreign and domestic investors, but it also has placed the island in a vulnerable position dependent on one source of energy. 

‘‘As we all know, companies factor in labor and energy 

costs when deciding to invest, operate, and create jobs in 

any given country. By diversifying its energy matrix, the 

Dominican Republic can secure access to energy at lower 

prices in order to maintain its steady economic growth and 

promote international competitiveness of its key industries. 

‘‘A big part of our decision to hold today’s hearing was 

to consider how the United States can assist the Dominican Republic and other countries in the Caribbean and 

Central America to mitigate their energy dependence on 

Venezuela and to help spur regional economic growth. As 

the largest economy in the Caribbean, the Dominican Republic has the opportunity to develop its energy independence, and potentially become a hub in the region for 

liquified natural gas and compressed gas. These are two 

low cost energy sources that can help meet both the midand long-term solutions. 

‘‘The administration’s decision to focus primarily on renewable energy as a practical solution is an expensive initiative. Feasibility studies have shown that geothermal energy is still not viable on a large scale. Moreover, due to 

their small size, Caribbean islands face many challenges to 

attract and secure private investment to develop a significant renewable network to offset oil-generated energy. The 

key to success is utilizing existing market trends. 

‘‘The Inter-American Bank of Development recently conducted a feasibility study to consider the introduction of 

natural gas in the 13 Caribbean economies. Experts found 

that LNG is the cheapest way to transport the gas and 

with the lowest cost of LNG coming from the U.S. Gulf 

Coast. Clearly, this is the trend that many resource-deprived countries are considering as they diversify their 

power generation and improve their energy security. Investing $30 million in a regasification and off-loading facility sounds like a prudent investment as opposed to millions of dollars in expensive solar ventures. I have pressured the administration to simplify DOE’s permit process 

to streamline the exportation of U.S. natural gas and will 

continue to do so.’’

I might add my name to that as well.

3

‘‘I am confident that as we add more natural gas to the 

equation, countries like the Dominican Republic will reap 

financial benefits allowing for greater economic development. I want to thank our witnesses for taking time to be 

here today. I look forward to a very informative hearing.’’

I will now recognize the ranking member, Mr. Sires, for his opening remarks. 

Mr. SIRES. Thank you, Mr. Chairman. Good afternoon. And 

thank you to our witnesses for being here today. This hearing 

comes at a time when the United States is confronting an increasing number of foreign policy challenges in the Middle East, Eastern 

Europe, and in particular, within its own hemisphere in Central 

America. But while Congress debates measures to address thousands of unaccompanied child migrants detained along the southern border, the extreme poverty and violence that continues to fuel 

this migration pattern in the region remains. Without a doubt, this 

humanitarian crisis will require a dedicated, shared responsibility 

and regional response. However, the United States cannot simply 

put out one fire to be caught off guard when other issues flare up 

elsewhere. 

As the tension focuses on Central America, the U.S. must be vigilant of any unintended consequences or spillover effects into our 

neighboring Caribbean region. It is with that in mind that we are 

conducting this hearing and the relationship between the United 

States and the Dominican Republic, one of our closest political allies and partners in terms of trade and security in the Caribbean. 

More recently, the United States’ and the Dominican Republic’s 

relationship has been centered on security cooperation, governance, 

and human rights issues, especially as they relate to Haiti. The 

current President of the Dominican Republic, Danilo Medina, holds 

congressional majority and those reports have indicated that the 

current party’s electoral dominance is a consequence of fractured 

opposition. And it has nonetheless raised concerns of its effect on 

the country’s governance and judicial independence. For its part, 

the United States is one of the largest bilateral donors to the Dominican Republic. The Dominican Republic has received at least 

$32 million through the Caribbean Basis Security Initiative for 

which Congress appropriated $327 million since 2010. 

However, in 2013, the administration designated the Dominican 

Republic as one of the four major drug-transit countries in the Caribbean. According to estimates, the majority of the roughly 6 percent of U.S. and Euro-bound cocaine that transits Hispaniola 

passes through the Dominican Republic. Moreover, a U.S. State Department report asserts that corruption and impunity remains endemic which adversely affects the anti-drug efforts. 

In terms of trade, the United States is the Dominican Republic’s 

main trading partner with two-way trade totalling more than $11 

billion in 2013. Trade and investment flows have expanded since 

the Dominican Republic’s Central American Free Trade Agreement 

with the U.S., which entered in March 2007. 

Today, the Dominican exports to the U.S. are shifting from apparel to technology-intensive goods making. The Dominican Republic is a leader in manufacturing and foreign direct investments, on 

par with Costa Rica. These highlights, however, have recently been 

4

scarred by a troublesome report issued by the U.S. Department of 

Labor, alleging that the Dominican Republic has violated CAFTADominican Republic labor rules by allowing various labor abuses, 

including forced and child labor in the country’s sugar cane fields. 

With respect to human rights, the U.S. State Department has cited 

various human rights problems in the Dominican Republic including violence against women, abuse by police, and principally the 

discrimination against Haitian migrants and their descendants. 

In September 2013, the Constitutional Court of the Dominican 

Republic issued a controversial ruling that may have rendered as 

stateless an estimated 200,000 Dominican-born persons, mostly of 

Haitian descent. The ruling was met with concern by the international community, including the U.S. State Department and 

Members of Congress. In response, in May 2014, President Medina 

ushered a naturalization law that included an expedited path to 

citizenship. And in June 2014, began to implement a plan to regularize those persons affected by the ruling. 

While observers, including the Government of Haiti, and the 

U.N. High Commissioners of Refugees have welcomed these measures as positive steps; others within the international community 

feel more needs to be done to properly address the ruling’s implications. 

Finally, in terms of energy, the Dominican Republic’s Govern- ment received some $600 million in subsidized oil through 

Petrocaribe in 2013. Like other countries that receive support 

through Venezuela’s Petrocaribe program, the Dominican Republic 

is vulnerable to excessive political influence by Venezuela. This dynamic became evident at the OAS during the height of the Venezuelan protest. 

In conclusion, the United States should continue to work closely 

with such a close ally as the Dominican Republic to strengthen ties 

and overcome these issues. And I look forward to the hearing and 

the panelists. Thank you. 

Mr. DUNCAN. I thank the ranking member. Pursuant to Committee Rule 7, the members of the subcommittee will be permitted 

to submit written statements to be included in the official hearing 

record. Without objection, the hearing record will remain open for 

7 days to allow statements, questions, extraneous materials for the 

record subject to the length limitation in the rules. 

So now I would like to introduce the distinguished panel. 

We are going to strike the previous comment. If members have 

opening statements, I will recognize Mr. DeSantis. He doesn’t have 

one. Mr. Meeks, you are recognized for 5 minutes. 

Mr. MEEKS. Thank you, Mr. Chairman. I wanted to enter an 

opening statement because I am a strong supporter of the United 

States and the Dominican Republic relationship. And that is why 

I am pleased to have this hearing today. As I often lament, the 

United States doesn’t pay enough attention to what is happening 

in our region of the world, that being the Western Hemisphere. 

And the Caribbean is a prime example of this. Caribbean nations 

like the Dominican Republic are important partners of the United 

States and deserve our attention. And it is for that reason I would 

like to thank Chairman Salmon and Ranking Member Sires for 

convening this hearing today. 

5

I know that the economic success of the Dominican Republic is 

linked to the economic well-being of the United States. That is why 

I continue to wholeheartedly endorse and support the CAFTA–DR 

agreement, as well as other means of supporting DR’s advancement. And when it comes to doing business in the DR and examining regional issues, I know we have the experts that are sitting 

here before us, especially I will give a shout out to Andre ́s from the 

AES who has an important perspective that I would love and am 

waiting to hear when he testifies. 

In addition to the economic relationship, I am a strong believer 

in the importance of cultural ties between our two countries, and 

I have many Dominican-American constituents that live in New 

York and especially those that live in my district and what they 

contribute to our country is invaluable. It makes our country a better place. 

Likewise, I represent many Haitian Americans and I was truly 

impressed by the Dominican Republic’s commitment to humanitarian assistance and disaster relief in the wake of Haiti’s tragic 

2010 earthquake. In fact, the Dominican Republic was the very 

first country to offer assistance. And I was pleased to learn that 

trade talks took place at a recent bilateral discussion between Haiti 

and the DR and I hope this dialogue will continue. 

I would be disingenuous, however, not to mention the Dominican 

Republic’s September 2013 ruling by the Constitutional Tribunal. 

That ruling renders an estimated 200,000 Dominican-born persons, 

mostly of Haitian descent, vulnerable to statelessness. Legislation 

passed and response to the ruling is a step in the right direction, 

but I am concerned that it does not do enough to address the full 

scope of the issue. For example, it is concerning to me that someone born in the Dominican Republic to a family that has long since 

settled there can find him or herself classified as a foreigner, even 

with the new law that establishes a legalization process. So I hope 

our witnesses can shed some light on the developing circumstances. 

Again, let me say thank you to Chairman Salmon and Ranking 

Member Sires for holding this hearing and I am grateful we have 

witnesses that I am looking forward to hear from individuals like 

Mr. Canton from RFK Center for Justice and Human Rights here 

today to shed more light on this particular situation. I look forward 

to learning more about how we can engage the Dominican Republic 

to resolve this human rights situation so that we can remain focused and that is what I really ultimately want to do, get back to, 

what we were talking about before this issue, we need to remain 

focused on the many successes that our great two countries have 

shared throughout a long friendship, and ultimately deal with this 

issue. Let us get back to that because I think that is what is important for us and that is what is important for the Dominican Republic and that is what is important for the region. I yield back. 

Mr. DUNCAN. Mr. Kennedy. 

Mr. KENNEDY. Thank you, Mr. Chairman. Many thanks to you, 

Chairman Salmon and obviously the ranking member, as well, for 

holding this important hearing. The policy and discussion I think 

will be elicited from your testimony is extremely important. I am 

here though because of some deeply personal ties to the Dominican 

Republic. So first to our witness, Mr. Canton, thank you very much 

6

for being here from the RFK Center for Justice and Human Rights, 

I am a big fan of what you do. 

And to the witnesses from the Dominican Republic, Mr. Ambassador, Mr. Ambassador, it is wonderful to see you both again. I, as 

you know, spent about 21⁄2 years living in the Dominican Republic 

as a [speaking foreign language], Peace Corps volunteer and actually lived right next to a number of bateyes in the sugar cane 

plants between Santiago and Porto Plata, so a number of the issues 

that have been touched on so far in the testimony by my colleagues 

here is something that is deeply personal to me. I am grateful for 

the cooperation that your government has shown in working with 

our office and the office of other members of the House of Representatives, as we try to understand a bit more about some of 

these issues, as the issues referenced in the Supreme Tribunal. 

Also, the importance of economics and developing trade and business economic intelligence ties between the United States and the 

Dominican Republic. 

You have an extraordinary country, one of the warmest and most 

generous people I have ever met anywhere in my life. They accepted me as family, a bit paler, not that many red heads in the Dominican Republic, although I did come across one, but I will always 

look on the country very fondly and I look forward to the testimony 

today, even though I can’t stay for all of it. So thank you very much 

and I thank you for your flexibility, Mr. Chairman. 

Mr. DUNCAN. I thank the gentlemen for their statements and 

now we will just introduce the witnesses and thank you, guys, once 

again for being here. It is interesting running a subcommittee. I 

have a way that I run my subcommittee on another committee and 

the way Chairman Salmon has it, so I appreciate the gentlemen 

wanting to have introductory statements. 

Our first witness today is Mr. Gluski. He is president and chief 

executive officer of AES Corporation, a Fortune 200 company providing electricity and related infrastructure services in 20 countries 

around the globe. Prior to being named CEO, Mr. Gluski was president of AES Latin America and has also served as the desk economist for Colombia at the International Monetary Fund and the Director General of the Public Finance of Venezuela. Mr. Gluski received a B.A. from Wake Forest University, Deamon Deacons, and 

holds an M.A. and Ph.D. in economics from the University of Virginia, specializing in international trade and finance. 

Our second witness today is Dr. Roberto A ́ lvarez. Mr. A ́ lvarez 

served as an Ambassador of the Dominican Republic to the Organization of American States between 2005 and 2008. Mr. A ́ lvarez received a master’s degree in International Relations from the Johns 

Hopkins School of Advanced International Studies. He also holds a 

J.D. (Juris Doctorate) degree from the Universidad Autonoma de 

Santo Domingo. 

The next witness is Mr. Canton. Mr. Canton is the executive director of RFK Partners for Human Rights at the Robert F. Kennedy Center for Justice and Human Rights. Mr. Canton is also an 

adjutant professor at Georgetown University Law Center. He holds 

a law degree from the University of Buenos Aires and a master’s 

degree in international law from Washington College of Law of 

American Universities. 

7

The last witness, Dr. Flavio Darı ́o Espinal, Dr. Espinal served as 

Ambassador of the Dominican Republic to the United States from 

’04 to 2009. Before that, he served as Ambassador of the Dominican 

Republic to the Organization of American States. He holds an M.A. 

(master’s degree) in political science from Essex University and a 

doctorate in government from the University of Virginia. 

Before I recognize you to provide your testimony, I am going to 

explain the lighting system in front of you there. Each of you will 

have 5 minutes to present your oral statement. When you begin, 

the light will turn green. When you have 1 minute left, the light 

will turn yellow. And when your time is expired the light will turn 

red. I ask that you conclude your testimony once the red light 

comes on. 

After our witnesses testify, all members will have 5 minutes to 

ask questions, and I urge my colleagues to stick to the 5-minute 

rule to ensure that all members get the opportunity to ask questions. A small subcommittee hearing, I think we will probably be 

okay with that today. I will allow a little bit of leniency and leeway, but we will try to keep it on time. And I apologize for the heat 

in here. Again, it is not my subcommittee room. We will blame Mr. 

Salmon on that. So Mr. Gluski, you are recognized for 5 minutes. 

STATEMENT OF ANDRE ́ S R. GLUSKI, PH.D., PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, THE AES CORPORATION 

Mr. GLUSKI. My name is Andre ́s Gluski. I am the President and 

Chief Executive Officer of the AES Corporation. It is a Fortune 200 

company based here in Arlington, Virginia. AES provides affordable and sustainable energy in 20 countries around the globe, utilizing a broad range of technologies and fuel sources. We have businesses in nine countries in Latin America, as well as Puerto Rico. 

Since 1997, AES has invested more than $850 million in the Dominican energy sector. Today, we are the largest U.S. investor in 

the country. AES owns two gas-fired power plants and an LNG import terminal and co-owns a third thermal power plant together 

with the government. Our total generation capacity is 850 

megawatts, which represents 23 percent of the installed capacity in 

the country. But we supply 40 percent of the electricity, due to the 

greater efficiency of our plants. 

Additionally, through the AES Dominicana Foundation, we have 

implemented sustainable community programs in the areas of education and the environment. Since 2007, more than 75,000 people 

in the Dominican Republic have benefitted from these programs. 

The island of Hispaniola, which the Dominican Republic shares 

with Haiti, does not have significant sources of indigenous fuel. 

Until 2003, the country relied solely on petroleum fuels such as 

heavy oil, gasoline, and diesel for thermal generation. In 2003, our 

LNG regasification terminal, AES Andre ́s began commercial operations. In conjunction with the regasification terminal, AES also 

built a new 319 megawatt combined cycle natural gas fired power 

plant and converted its existing 236 megawatt diesel fired DPP 

plant to natural gas. These plants are now two of the lowest cost 

plants in the country. 

Recently, AES began the process of closing the cycle of DPP to 

increase its output by another 114 megawatts without using any 

8

additional fuel. The impact of introducing natural gas into the Dominican Republic’s power sector over the past decade is truly impressive. In 2000, 90 percent of the country’s installed capacity was 

oil based. By 2013, oil-based capacity had decreased to 39 percent 

and natural gas represented 31 percent. This dramatic shift translates into savings of more than $1⁄2 billion per year for the Dominican Republic if compared to importing petroleum products to generate electricity. These savings are largely passed on to the end 

consumer as lower electricity prices. 

Fortunately, there is still opportunities for further gains, both in 

the Dominican Republic and the rest of the Caribbean. In the Dominican Republic, adding a second LNG storage tank to our Andre ́s 

facility could fuel an additional 1,000 megawatts of natural gas 

generation, and allow for the re-export of natural gas to neighboring countries. 

As stated in the independent Castalia Strategic Advisors Study 

prepared for the Inter-American Development Bank, states, ‘‘the 

Dominican Republic may be the best option for a physical hub in 

the Caribbean, because it is centrally located and because AES 

Dominicana already has LNG facilities and operations in place.’’

By expanding AES’ current LNG facility in the Dominican Republic, the country could become the center of a hub and spoke system where by LNG would be imported from the United States in 

large, efficient tankers and then re-exported in smaller volumes as 

LNG or compressed natural gas to other Caribbean islands. The results in the Caribbean could be similar to those seen in the Dominican Republic with other islands benefitting from secure and stable 

energy supplies and lower electricity prices for end consumers. 

Additionally, as discussed in the Atlantic Council’s recently published report, ‘‘Uncertain Energy, the Caribbean’s Gamble with 

Venezuela,’’ the future of Venezuela’s Petrocaribe agreements 

which provide low cost, long-term financing for petroleum imports 

from that country, is increasingly uncertain. The financial assistance at Petrocaribe provided countries in the Caribbean and Central America last year amounted to almost $2 billion, including 

$470 million for the Dominican Republic, $370 million for Jamaica, 

and $220 million for Haiti. 

Providing these countries with natural gas from an efficient hub 

in the Dominican Republic could mitigate the risks of continued dependence on Petrocaribe. The expansion of our existing Andre ́s 

LNG facility in the Dominican Republic provides the fastest and 

least costly way to increase the availability of natural gas in the 

Caribbean. A larger facility would benefit other energy sector players in that country besides AES by allowing them access to the terminal and storage capacity, as well as providing opportunities for 

trans-shipment providers to supply other countries in the region. 

AES looks forward to continuing to support the Dominican Republic and welcomes the opportunity to provide similar benefits to 

consumers throughout the Caribbean, alongside multi-lateral entities such as the Inter-American Development Bank and the IFC, 

U.S. agencies such as OPEC and USAID, as well as regional and 

local partners. 

I want to thank you all very much for the opportunity to testify 

today, and I would also like to invite you and other members of the 

9

subcommittee to visit our facilities in the Dominican Republic. 

Thank you very much. 

[The prepared statement of Mr. Gluski follows:]

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Mr. SALMON [presiding]. Thank you very much. 

Mr. A ́ lvarez. 

STATEMENT OF MR. ROBERTO A ́ LVAREZ (FORMER AMBASSADOR OF THE DOMINICAN REPUBLIC ON THE COUNCIL OF 

THE ORGANIZATION OF AMERICAN STATES) 

Mr. A ́ LVAREZ. Thank you, Chairman Salmon, Ranking Member 

Sires, and members of the subcommittee. Thank you very much for 

the opportunity to testify and share my views with you today. 

I should disclose from the outset that a week ago I declared my 

support for a Dominican opposition politician, Luis Abinader, who 

was the vice Presidential candidate in the 2012 election. 

There are many reasons why the relationship is important, and 

in my statement you will find a list of those reasons. But let me 

just highlight very quickly some of them. The Dominican Republic 

is the U.S.’s 38th world-wide export market, number one in the 

Caribbean. The Dominican Republic is the source of the fourth 

largest Latino population in the United States, over 1.5 million. It 

is the sixth country of origin in the world of nationals acquiring 

U.S. citizenship in the last decade from 2004 to 2013. The fourth 

country in the world whose citizens received U.S. permanent residences between 1990 and 1999, and the fifth between 2000 and 

2013. These are just some highlights, quick highlights. 

Now this is again in my statement. In terms of economic, I want 

to address economic growth from the vantage point of inequality in 

the country. In a January 2014 report, the World Bank determined 

that ‘‘despite strong growth over the past decade, large inequities 

persist in the Dominican society and are declining more slowly 

than expected. GDP per capita rose almost 50 percent from 2000 

to 2011, yet many of the country’s 10 million people missed out on 

the benefits. Chronic poverty, in which people endure long spells of 

being poor remains high. Of greater concern, almost one third of 

the population is poor despite having the skills and assets to generate higher income.’’

I find, however, that the most troubling part of the report is the 

following: ‘‘The Dominican Republic also has low economic mobility, 

with less then 2 percent of its people climbing to a higher income 

group during the decade. This compares to 41 percent for the rest 

of Latin America and the Caribbean during the same period.’’

When people feel that there is no way out of poverty, that there 

is no way out of a certain level of station in life, when social inequality abounds and when there are 680,000 youths who neither 

work nor study, you have a very combustible and explosive situation. 

Now in terms of trade, I want to highlight and this is not in my 

statement. I truly believe in free trade. I believe in the DR–

CAFTA, but promotes the entry, the secure and free entry of trades 

in goods and services, promotes foreign investment, yet I want to 

point out something that is glossed over. In terms of trade, the 

DR–CAFTA was signed in 2005. It came into force with the Dominican Republic in March 2007, yet DR–U.S. trade balance until 2005 

was close to even. However, beginning in 2006, but accelerating in 

2007, the terms of trade on the CAFTA–DR have shifted excluVerDate 0ct 09 2002 15:47 Sep 23, 2014 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\WORK\_WH\072314\88831 SHIRL
22

sively in favor of the United States. There are many factors for 

this, the end of the Multifiber Agreement and so on, but anyway. 

Now there are difficult conditions that are being faced by the 

local industry, and next year, another 15 percent of industrial 

goods will be liberalized and the tariffs will be lifted. And the local 

industry is going to be facing a very difficult situation, a potential 

loss of jobs and so on. But to give you an example, in 2013, U.S. 

exported in comparison to 2006, the exports from the U.S. went up 

by 33 percent. During that same period, Dominican exports to the 

United States went down by 6 percent. So this is just something 

to keep in mind where the Dominican Republic is, not yet as competitive as we should be at a point in time when more trade is 

being liberalized. 

And I am not even going to have time to go into the TPP, but 

there is an exchange of letters. There are certain concerns about 

certain liberalization of fabrics and yarns that maybe some TPP 

countries may be receiving that could negatively affect our industries. There is an issue of MINUSTAH. I think you should hold a 

hearing. The burden on the Dominican Republic is going to be considerable when MINUSTAH leaves, which the draw down has already started. 

And finally, in politics, it is in my statement. The issues, the 

main issues in the Dominican Republic now are the 2016 elections, 

is leveling the playing field so that the institutions that are in 

charge, the Electoral Commission, the Electoral Court are credible. 

There is a certain loss of credibility from opposition sectors on their 

independence, and this is an issue that could have tremendous importance because they are going to be about 4,500 candidacies 

elected in the 2016 elections, the first time that all Presidential, 

congressional, and municipal elections will be held together. 

Thank you very much. 

[The prepared statement of Mr. A ́ lvarez follows:]

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Mr. SALMON. Thank you, Mr. A ́ lvarez. Mr. Canton. 

STATEMENT OF MR. SANTIAGO A. CANTON, EXECUTIVE DIRECTOR, RFK PARTNERS FOR HUMAN RIGHTS, ROBERT F. KENNEDY CENTER FOR JUSTICE AND HUMAN RIGHTS 

Mr. CANTON. Chairman Salmon, Ranking Member Sires, members of the subcommittee. Thank you very much for this opportunity. Let me start by saying that the human rights based approach to development leads to better and more sustainable outcomes. There is growing recognition among governments, institutions, and the private sector that human rights regulations and social exclusion have a negative impact on economic development. 

I wish to focus my comments, therefore today, on some of the underlying challenges that must be taken into account by governments and the private sector alike in order to ensure that investment and economic growth benefit those who are most in need in 

the Dominican Republic. 

The Dominican Republic, like most countries, has several human 

rights issues that require urgent attention including, but not limited to, high levels of police brutality, restrictions to freedom of expression, violence against women and children, sexual exploitation, 

and trafficking in persons. 

Because of time constraints, I would like to concentrate today the 

remainder of my time on one of the most pressing human rights 

issues taking place in the Dominican Republic today, the arbitrary 

stripping of hundreds of thousands of Dominican nationals of their 

citizenship. As a result of a decision, as Congressman Sires said, 

by the Dominican Constitutional Court last September, individuals 

who were once citizens are today considered foreigners. The decision applies retroactively to 1929. This means that in some families, up to four generations of Dominican citizens are now forced to 

report to the government as foreigners. For your reference, had the 

U.S. Supreme Court handed down a decision like the one in the 

Dominican Republic, millions of U.S. citizens born in this country 

since the Great Depression, children, grandchildren and even 

great-grandchildren would have been retroactively stripped of their 

citizenship and converted into immigrants. 

As a result of that Constitutional Court’s decision, these Dominican citizens who were born in the Dominican Republic, had been 

recognized as citizens, and have lived their whole lives as such, 

were suddenly prevented from engaging in economic activities such 

as working in the formal sector or opening a bank account. Many 

of these Dominicans have also been prevented from attending university, which of course drastically limits their economic opportunities. On our most recent visit to the Dominican Republic, the RFK 

Center spoke to young adults who had been at the top of their high 

school classes and due to the retroactive deprivation of their nationality, they were ineligible for college or formal-sector jobs. 

Thousands of Dominicans are now in similar positions. 

I must note that there has been a great confusion around this 

issue, as it has been intentionally been framed as an immigration 

debate instead of what it really is: The denial of the rights of Dominican citizens. This is not an immigration issue. 

30

The Dominican Government has passed the Naturalization Law 

billed as a humanitarian solution to the citizenship crisis. While 

the Naturalization Law provided a practical fix for Juliana Deguis 

Pierre, the subject person of the Constitutional Court decision, and 

roughly 24,000 others in a similar position, it failed to recognize 

the nationality of hundreds of thousands of additional Dominican 

citizens. These citizens are now supposed to self report as foreigners alongside actual undocumented people, immigrants. 

The citizenship crisis in the Dominican Republic has already 

started to affect its economic and trade relationships with neighboring countries. In particular, with the Caribbean community, 

CARICOM, which is the sub-regional organization for economic integration and trade and to which the Dominican Republic has tried 

to become a member for years. As a result of the citizenship crisis, 

CARICOM has suspended consideration of Dominican membership 

in the community, has threatened trade sanctions and has repeatedly expressed concerned about the discriminatory policies in the 

Dominican Republic. 

Just this month, the CARICOM heads of government reiterated 

that it would not be business as usual in the community’s relationship with the Dominican Republic until the government recognizes 

the citizenship rights of all those affected by the ruling. As a political theorist once said, ‘‘The right to nationality is so fundamental 

that it can be described as the right to have rights.’’ Thank you 

very much, Mr. Chairman. 

[The prepared statement of Mr. Canton follows:]

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Mr. SALMON. Thank you, Mr. Canton. The Chair recognizes Dr. 

Espinal. 

STATEMENT OF FLAVIO DARI ́O ESPINAL, PH.D., FOUNDER AND 

PRESIDENT, FLAVIO DARI ́O ESPINAL & ASOCIADOS 

(FORMER AMBASSADOR OF THE DOMINICAN REPUBLIC TO 

THE UNITED STATES) 

Mr. ESPINAL. Thank you very much, Mr. Chairman, Ranking 

Member Sires, and distinguished members of the subcommittee. 

Thank you for your interest in the Dominican Republic, and thank 

you for inviting me. It is a great honor and distinction to be here 

in this institution that I analyzed so much since I was a student 

at the University of Virginia, Jefferson’s university. 

I would like to touch on a number of issues that have been raised 

during the hearing, and I think I can provide some perspective on 

the situation in the Dominican Republic. One first point is that the 

Dominican Republic is a country with political stability. In over 40 

years in the Dominican Republic, there has not been a coup d’e ́tat, 

a breakdown in the political order. There has been civilian governments, democratically-elected governments and the three major 

parties have held office and power has been transferred peacefully. 

Of course, there are institutional challenges. There are problems 

and issues as in any other country, undeveloped countries need to 

face, but I think that is a major achievement taking into account 

the history of political upheaval and the dictatorial and authoritarian governments during the 19 century and great part of the 

20th century. 

From economic perspectives, some of my colleagues here have 

raised, have touched on the vibrant character of the Dominican 

economy. It has had a typically average growth during the last—

since 1991 until 2012 of 5.8 percent. The Dominican economy is a 

diverse economy. It has different sources of growth, and has been 

able to face the challenges of economic crisis internationally. Since 

it is a vibrant economy, a growing economy, the largest economy 

in the Caribbean and in Central America, it has provided the market for the U.S. especially in the context of DR–CAFTA. 

I worked very closely with Congressman Meeks during the process of implementation while I was here and I have fond memories 

of that time. I think it has been a great opportunity for the U.S. 

to export to the Dominican Republic and for us it is a challenge to 

increase competitiveness, but also it has created the opportunity 

for more investment and institutional support in the country to 

better the institutional practices in my country. 

Bilateral relations, bilateral trade has been over $11 billion in 

the year 2013. We are concerned, Mr. Chairman, and distinguished 

members of a possible provision in the TPP regarding a farm provision that could affect the interests, the economic interests of the 

apparel industry in the Dominican Republic, in Central America 

and also in the United States. So it is an issue that I would like 

to bring to your attention. 

Of course, there is also a relationship in terms of tourism, remittances, investment and cooperation between the U.S. Government 

and the Dominican Government. 

41

With regard to the decision of the Constitutional Court, I would 

like to say that of course as it happens in the U.S., the Dominican 

Government, and the Dominican society as a whole, had to obey 

the decision of the Constitutional Court. In fact, the Constitution 

says that the decisions of the Constitutional Court is binding to all 

state organizations, state institutions, and all citizens. However, 

the Government and the Congress have acted appropriately and 

have provided the legal framework that has responded to the three 

main issues that are derived and are part of the whole problem regarding that population that is in the Dominican Republic. On the 

one hand, it has created a naturalization plan, and already in less 

than 2 months, close to 100,000 people have lined up to submit 

their requests to become a regular resident in the Dominican Republic. 

Secondly, the law has provided the evaluation of all the documents that people who the Court consider that they were not 

Dominicans. However, the legislation has passed that has validated 

all the documents, so they remain as Dominicans, full Dominicans 

with full rights. And the third group, people who were born and 

can prove they were born in the Dominican Republic, and they 

have a pathway to naturalization through a process of regularization and naturalization of becoming Dominican citizens within a 

framework of 2 years. So it is my belief that even though the Constitutional Court decision created this situation that was conflicted, 

very controversial, both internally and abroad, I am confident that 

the legal framework that has been created is appropriate, is effective and it has been created, guided by principles of human dignity, 

equality, and equality before the law; also with the sense of equilibrium and political responsibility given the difficulty, political difficulty, that the government was facing as a result of the decision. 

So I believe there has been an effective and appropriate response 

on the part of the Congress and the President. And the great issue 

now is how to move forward with the cooperation of partners and 

the implementation of these laws by the institutions that are responsible to implement such laws. Thank you very much. 

[The prepared statement of Mr. Espinal follows:]

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Mr. SALMON. Thank you very much, Dr. Espinal. I will now yield 

myself 5 minutes for questions of the panel. 

Mr. Gluski, other than the option of large scale financial assistance, what are some of the measures that you would recommend 

the U.S. Congress should consider to ensure a constructive role for 

the United States as we increase assistance to the Dominican Republic to restructure its energy sector? Do you believe that the U.S. 

can play a role as a fuel supplier, as a technical advisor on implementing alternative fuel sources and ways to improve energy delivery systems or as a policy advisor in the complicated areas of legal 

and regulatory policy to promote competition? What measures to 

help meet short to medium term solution can we look at? 

Mr. GLUSKI. Thank you, Chairman Salmon. I think there are 

many roles the U.S. Government can play. First, the U.S. is the 

natural supplier of LNG to the Dominican Republic. Now the thing 

is, it is a smaller market than some of the markets in Asia, so we 

have to make sure, I think, that we facilitate those export approvals for the liquifiers on the Gulf to make sure that they get to this 

market. Now that is the cheapest way to get the LNG there is from 

the U.S. 

We are bringing LNG at U.S. prices, but from Trinidad. We 

signed a 20-year agreement based on Henry Hub since we are a 

U.S. company. Now, I think there are several roles in terms of one 

is through the multi-laterals like the Inter-American Development 

Bank is now helping the Dominican Republic restructure the energy sector. And what is very important there, is there is a tremendous amount of energy losses. In other words, about 30 percent of 

the energy that is consumed is not paid for. And so that means 

that the government must subsidize this in their budget every 

year, and that is where Petrocaribe comes in to help subsidize the 

$1 billion shortfall. 

So part of it I think, is they do need investments in transmission 

and other sectors to get the energy, let us say efficiently around the 

country. I think in terms of the project such as ours, ours was done 

completely by the free market. We did not get any sort of official 

loans. However, I think that loans that, for example, support from 

OPEC, Ex-Im, those things are important, so quite frankly you buy 

American. If you can get JEXIM, you will buy Japanese. So I just 

put that in mind for a U.S. company such as us. 

I would also mention that since we talked about the Caribbean, 

and not just the Dominican Republic, we can bring in gas to the 

Dominican Republic from the U.S. as a free trade agreement country. But if you re-export it to some of the other places like Haiti 

or Jamaica, what would be the arrangement for that? So facilitating the re-export would also help. 

And I would say that finally that if we are thinking about 

Petrocaribe and it has political influence as has been mentioned by 

some members in the region, if that were to say end tomorrow because quite frankly the Venezuelan consumption is going up, their 

production is not. You would need some way to step in to help facilitate the transition. You can’t suddenly take $2 billion of financing out of the Governments of the Caribbean and Central America 

without proposing an alternative. And I would suggest that the appropriate vehicle for that would be the IMF or the World Bank 

46

rather than the U.S. Government, but certainly the United States 

can support those. 

Mr. SALMON. Thank you. Dr. Espinal, are the energy challenges 

in the Dominican Republic the result of external factors or internal 

considerations? For example, are the inefficiencies a result of a lack 

of political will to change an inherently dysfunctional system or is 

the DR, and by extension most of the island nations of the Caribbean, at a fundamental disadvantage because of geography and demographics, or is it some of both? 

Mr. ESPINAL. I think it is a mix of things. We had a system for 

many, many decades that was controlled by the government. Then 

there was kind of messy privatization without a legal framework 

that could set the rules and the regulatory agencies that could administer the system. Eventually, there was a law in the second half 

of the ’90s that transferred the state-owned properties in the energy sector in the electricity sector particularly to the private sector. There has been positive and negative aspects in the process. 

I think that legal reform allows investments to just AES investment in the Dominican Republic the leader in natural gas and producing low-cost energy in the Dominican Republic and I congratulate them for that. But we have a sector that relies so much on 

fusel oil, and we need to transform that to relying more on cheaper 

and cleaner source of energy. 

Of course, there is a need to do more in terms of reforming the 

distribution and commercialization system. There is a portion of 

the population that does not pay their bills, for one reason or another. Sometimes they are very poor and they are not reached by 

the companies that provide the electricity, so there is a gap between what the energy producers produce and what they end up 

collecting. And then how is that whole field by the government subsidizing close to $1.2 billion for the Dominican Government which 

is a heavy burden for the finances of the Dominican Republic. 

In sum, I think we have to move more in terms of some legal reform, some political will, of course, and also more investment from 

the private sector and I am seeing positive movement like the AES 

recent investment. 

Mr. SALMON. Thank you. One last question, Mr. A ́ lvarez, the Dominican Republic and other Caribbean nations represent some of 

the United States’ most vulnerable neighbors due to their dependence on Petrocaribe. In your opinion, does the United States have 

a strategic or even a moral responsibility to the region to help 

these countries exit the program? And do you believe it is most 

likely to step in if the U.S. does not in the event that Caracas decides to modify the financing terms? 

Mr. A ́ LVAREZ. Well, it is a welcome interest, Mr. Chairman. Unfortunately, it comes a little bit late, and by that, what I mean is 

that now you have the Dominican Republic has accumulated a debt 

of $4 billion with Venezuela, but more importantly, it has gotten 

used to, over time, to this easy money. And what that means is 

that as Mr. Gluski said, this has been used to cover the deficits, 

for example, paying the deficit that also Ambassador Espinal alluded to, $1.2 billion to $1.4 billion every year in subsidizing the 

electric sector because it does not, I think, have the political will, 

47

has not had the political will to step up and start charging that 30 

percent of society that does not pay for electricity. 

So yes, it is welcome. I think the conjecture at the moment is 

that the United States is now reaching a point where it is going 

to—I think it is 2035, reach energy independence, so this is the 

time to start looking at ways quickly of how the countries such as 

the Dominican Republic can be weaned off this dependency. 

Mr. SALMON. Thank you very much. Mr. Sires. 

Mr. SIRES. Thank you, Mr. Chairman. Dr. Espinal, I listened to 

your comments. Sort of interesting, 40 years of stability, 40 years 

of democratic elections. Why now deal with the Haitian issue if you 

have had such stability and if you have had such democratic elections, why now? Why deal with this issue now? I have been to the 

Dominican. I have been to Jimani. I was there after the big floods 

of Jimani. I helped build schools there. I provided supplies there. 

So the area doesn’t seem like you can’t tell the difference which is 

Haiti and which is Dominican Republic. But why now, after so 

many years, do we have to deal with this? And the courts that 

dealt with this, was this court instituted by Leonel or was it a 

court over the Supreme Court? Who made these decisions? Mr. 

Canton, you can answer that, too. 

Mr. ESPINAL. Thank you. Thank you for your question. The reason why I mentioned the Dominican Republic has had political stability because this is a major achievement, sometimes not well appreciated in some parts of our region when you compare with other 

countries close to ours. I think it is significant, these 40 years, 45 

years of stability, civilian government, elections, transfer peacefully 

of power and so on and so forth. That is internally. 

Now we have a neighbor that has its challenges. You take Haiti 

from 1991, when the coup d’e ́tat against President Aristide took 

place and the military came to power, since practically beginning 

of the ’90s up until now, Haiti has been in a very unstable situation with some periods of certain instability. Sometimes the possibility of having an effective communication, and sustained dialogue 

with the Haitian authority have been very difficult. 

Now we see for a variety of reasons we have a functioning government in Haiti with the good will to work with the Dominican 

Government. We also have a government that was ready to do that 

and I think that has created good atmosphere to move forward and 

address issues of commerce, security, cooperation, and so on and so 

forth. 

Mr. SIRES. But this is 40 years, now you are talking the last few 

years. I just don’t see the rush to all of a sudden deal with a problem that you have had and you have enjoyed, quite frankly, cheap 

labor from the Haitian community over so many years. To me, and 

even politically that doesn’t make sense. You have an election coming in 2016. I mean I just don’t see it. 

Mr. ESPINAL. Well, sometimes one thing is not necessarily connected to the other. We feel very strong and very proud of having 

achieved this politically. Of course, with all the challenges and 

problems that you can mention and others can mention, but that 

is a major achievement. 

We also have been obtaining important gains in areas such as 

protection of the environment for instance, and other areas as well. 

48

In Haiti, unfortunately, they have been involved in like a revolving 

door of a crisis to crisis, political instability, international presence 

through MINUSTAH, by the way, I agree with what Roberto 

A ́ lvarez, my colleague and friend, mentioned. We are very concerned about the end of MINUSTAH and the support of international communities to Haiti, because that could create problems 

in Haiti which is not good for Haiti and not good for us either. So 

in that regard, we created—back in 1996, we created a commission 

to dialogue with Haiti and it was practically impossible to sit down 

for a day or two to talk about a constitutional accord. It was the 

creation——

Mr. SIRES. I am running out of time, so I don’t mean to interrupt 

you, but I would like Mr. Canton, if he would shed some light into 

this? 

Mr. CANTON. May I distinguish between two different things? 

One thing is the issue of Haitian immigration to the Dominican Republic. There is a history of that. I am not going to be the first one 

to say that there has been a pattern of discrimination against Haitian citizens in the Dominican Republic. And that is one issue. 

That was somewhat resolved in 2010 with the constitutional reform 

that clarifies, for good, the situation of Haitians that are born in 

the Dominican Republic. That has been resolved. 

Now in addition to that, there is the issue of Dominican citizens, 

not Haitians, Dominican citizens that have been stripped of their 

nationality. That is a different issue. I don’t want to—there is an 

attempt to refer to this issue as an immigration issue. It is not an 

immigration issue. The immigration issue has been resolved, 2010. 

It is done. The other problem is not an immigration issue. It is a 

nationalization issue. They have stripped the nationality of more 

than 200,000 people. And in that category of 200,000, you have different groups. The first group, 24,000, approximately 24,000 have 

some sort of document for the government is saying and the nationalization plan is saying you are Dominican, you are going to be 

fine. Just line up, and we are going to give you the citizenship. 

Unfortunately, I hope, only for practical reasons, it hasn’t worked 

yet, but they are—according to the law and according to the constitutional accord, they are Dominican citizens. However, there is 

another group, all the rest, more than 200,000 people still that 

have to line up and they may get the citizenship. And there is no 

difference in these two groups. You can have one person that has 

a birth certificate and the brother or sister did not get it for whatever reason, and the one with birth certificate is going to be Dominican citizen. The one without the birth certificate is not. So 

there is again in this issue a clear pattern of discrimination against 

Dominican citizens. And it would have been very easy for the Government of the Dominican Republic when approving this law to 

apply the same criteria to everybody, not just to that group of 

24,000. 

Mr. SIRES. Do you have any idea why now? 

Mr. CANTON. There is a history of discrimination against Haitian 

citizens in the Dominican Republic. 

Mr. SIRES. My time is up. I thank you for the extra time, Mr. 

Chairman. 

49

Mr. DUNCAN. I thank the chairman, thank the gentlemen, interesting topic for me because I am very focused on energy and energy 

issues for the United States, so hearing the perspective of Dominican Republic with regard to energy is fascinating. Natural gas is 

the way to go. When I am looking at a barrel of oil equivalent, it 

is about 6,000 cubic feet of gas. Gas is sold at a million BTUs, so 

a BTU is about a 1,020 BTUs per cubic foot. That is 6 million 

BTUs per barrel of oil equivalent. Six million times the price of gas 

now is about $28 for a million BTU right now, based on the market. A barrel of oil is trading at $103, so you get gas, not LNG. I 

understand LNG, you got to factor in, liquefying, transportation 

costs, I get all that. Just what the open market is at 465 million 

BTU today versus $103 a barrel, so $28 versus $103. Natural gas 

is the way to go, and we have got a abundance of it here in this 

country. So why not expedite the LNG terminals in this country, 

and help our friends in the Caribbean states and nations with their 

energy needs? It just makes sense to me to help Americans and 

American companies make money selling LNG and help our friends 

in the region. 

So let me ask you this, Mr. Gluski. The focus on energy in the 

region’s off-and-on power generation and the cost of electricity to 

the consumer, but the reality is that in many of the countries the 

majority of the imported fuel goes to transportation, bunker, and 

aviation fuel requirements. So what can governments in the private 

sector do to increase fuel efficiency or alternative fuel use in transportation? And I would like you to just talk about LNG aspects as 

well. 

Mr. GLUSKI. Thank you, Congressman Duncan. Actually, in the 

Dominican Republic, we are selling compressed natural gas to 50 

businesses outside of the energy sector. So we actually built a compressed natural gas facility and it is being used in transportation. 

So you are absolutely right, that it would make a lot of sense, especially like big trucks and people who have buses, etcetera, to 

change those over to natural gas. And that can be done. 

Now I think that what is important is that the investments in 

the regasification facilities are expensive, and quite frankly, a lot 

of the islands in the Caribbean are too small for it. So that is the 

thing to realize that it is not a question of bringing it in, but then 

somebody has to make the investments of having those facilities. 

So that is why our concept would be to make it a hub from the Dominican Republic, which would also give them more energy security by having more stocks of fuel. 

The other thing that to facilitate the building of the liquification 

facilities in the U.S. what you require is a long-term contract. For 

example, we signed up to a 20-year contract with Trinidad to bring 

gas to the Dominican Republic. There is also the credit worthiness 

of the off takers and that is why support from the multi-laterals 

can help to make those longer term agreements possible and you 

will need somebody to aggregate it to get the minimum volumes 

necessary to build such a facility. 

Mr. DUNCAN. I understand that. Is there a way to—you mentioned agreements with other island nations and I think about 

Puerto Rico and I see the former Governor Fortun ̃ o is here and I 

am glad he is with us today, former congressman as well. 

50

I assume that there is an opportunity for all the island nations 

to really come together in some sort of pipelines that might be possible and shared transportation costs, offloading X percentage at 

each nation, some sort of trade agreements like. Is that being 

talked about? 

Mr. GLUSKI. Well, Puerto Rico also has an LNG facility which 

they have had difficulty expanding. So actually, if you made a hub 

in the Dominican Republic, you could bring ships into Puerto Rico. 

Now what I think makes sense is, again, I think a multi-lateral 

could help aggregate the demand to make it efficient, especially for 

the smaller islands or something like Haiti. Quite frankly, we are 

supplying now about 2 percent of Haiti’s energy needs through 

shipping compressed natural gas from the Dominican Republic. But 

there are very few credit worthy offtakers in Haiti, and that is 

where they need support. So I think it could be a win-win to have 

a policy here. 

Mr. DUNCAN. Can you shift enough volume in CNG to make it 

feasible. I mean LNG is the way to ship gas if you are going to ship 

large volumes, but is CNG feasible? 

Mr. GLUSKI. CNG is feasible, for example or to take it for example to Haiti, you are not going to build in the short term an LNG 

regasification. So you ship it by truck to Haiti if you had a creditworthy offtaker. 

The other thing that you could do is, quite frankly, gas by wire 

is to produce the electricity in the Dominican Republic and just 

build a transmission line to Haiti. And the same problem, you 

would need USAID or one of the multilaterals to guarantee payment to get that energy there. 

After the earthquake, we sent crews over to Haiti to help restore 

electricity there, and I can tell you there is just so much to be done 

in Haiti and they could have such enormous social benefits from 

bringing electricity to that country, but it is not going to happen 

without support from the multilaterals and I think the U.S. could 

play a role there. 

Mr. DUNCAN. I understand. I have talked many times in the Foreign Affairs Committee about electrification and what that does to 

raise the standard of living and lifestyles of so many people around 

the world, from being able to keep food fresh, to be able to teach 

your children after dark with electricity and to cook without charcoal and all the other health things that comes from that. I am out 

of time, but I am hoping we are going to have another around of 

questioning and I yield back. 

Mr. SALMON. We will. We will have another round. Mr. Meeks. 

Mr. MEEKS. Thank you, Mr. Chairman, interesting hearing thus 

far, and I am glad we are going to have another round. I want to 

make sure I understand where we are headed and I understand 

the futuristic piece that we may be looking at in dealing with LNG. 

But right now as I look at the DR and the entire Caribbean I just 

want to get your opinion. One of the concerns I have and given the 

fact that Venezuela has been utilizing giving oil at such rates, 

prices to try to help the economy, had Venezuela failed, what would 

then happen to those countries like the DR and those countries in 

the Caribbean? 

51

Mr. GLUSKI. That is a great question and one since we serve 

those markets, we pay a lot of attention to them. I think that what 

is most likely to happen is that not so overnight, but you could 

have a withdrawal from certain countries. And probably, you would 

have the politically more friendly countries be the last ones. Of the 

countries, the Dominican Republic is in the best shape, I would say 

because the economy is relatively healthy and as well, they are 

paying for it in kind. There are actually barter agreements where 

they send beans to Venezuela in exchange for oil, etcetera, but you 

know, this is something that is quite frankly not economically efficient. Even if Venezuela started to withdraw, certainly countries 

would be cut off first. 

And there the question would be some countries are more vulnerable than others. And again, I think the Dominican Republic is 

probably the least vulnerable of them, but you have Jamaica, you 

have other countries. That is where I think in the short-term, some 

sort of thought process should go in now, say IMF or somebody 

would come in to subsidize because you can buy the fuel. Actually, 

the whole Caribbean buys more fuel from the U.S. than it does 

from Venezuela. The difference is that Venezuela subsidizes half of 

it, half of what they export. They will give you a long-term loan of 

3 percent. And that is what it is. So it is basically a way of financing, but there is no problem with getting the fuel. So if you had 

a form of financing, the effects would not be so great. And I think 

that would be a way of U.S. showing leadership to friendly nations 

in the area with which we have close cultural and personal ties. 

And I think——

Mr. MEEKS. Let me ask this quickly, because you mentioned IMF 

and maybe a way of financing. I know that previously we were 

talking about the IMF. What I received from a number of the countries previously was that the conditionalities that come with an 

IMF loan, as well the cost for servicing the debt, is tremendously 

expensive. Would IMF have to work something else out in regards 

to changing some of their conditions? 

Mr. GLUSKI. Again, what I suggest here is not a typical structural adjustment loan where you come in and you have a lot of conditionality. It would have to be a short-term—something that could 

react relatively quickly, because those loans also take 6 months 

sometimes to negotiate. So you need a facility that could step in 

and say look, we will provide financing until you get your house in 

order to alleviate the shock of this process. I leave that to the IMF 

to negotiate. But you are right, the IMF loans do come with conditionality. The problem is IMF usually comes in after a crisis has 

happened, so it is a lot more fun to run up a debt and then have 

to pay it. So the IMF comes in when they have a problem and says 

okay, to get your house back in order, you have to tighten your 

belt. 

Mr. MEEKS. Mr. A ́ lvarez, let me jump to you because I have concern being a strong supporter of DR–CAFTA and you talked about 

how it is not benefitting a lot of the individuals in the Dominican 

Republic, at least the balance of trade is all in the United States’ 

favor as opposed to being balanced and helping. Does that have 

anything to do with the current state of the economy you think 

and/or capacity building of a need to have greater capacity building 

52

so that individuals in the DR can better benefit from the agreement? 

Mr. A ́ LVAREZ. It is all of the above. I mentioned the end of the 

Multifiber Agreement in the beginning of 2005, that had a terrible 

impact on the free zones of the DR. Many went bankrupt. As you 

look at the figures, you see how the exports to the United States 

dropped significantly. So that is one factor. 

But in terms internally, the competitiveness of Dominican industries is lacking and lagging. And that is one of the areas and there 

are many factors for that, energy being one of them, a very important one, but certainly not the only one. Skills of the workers, infrastructure in general. 

Mr. MEEKS. What can we do to help? 

Mr. A ́ LVAREZ. You have to innovate. I think one of the things the 

United States has been to some degree looking—has been reacting 

too slowly. You need new innovative ways of looking and we are 

talking about, as you yourself said, looking at the close geographical islands that are friendly or countries that are extremely 

friendly that have trade agreements that look favorably to the 

United States and that don’t receive the type of attention that 

should be receiving. So a host of—in my statement, I have a number of issues that I recommend that you can take a look at so I 

don’t take too much of your time. 

Mr. MEEKS. I just have one more question based on this. Because 

of the preferences that Haiti has, could the DR take some advantage there and they can work closely together on some of that and 

that would help both with exports to the United States and help 

stabilize the economy? 

Mr. A ́ LVAREZ. Absolutely. That is absolutely fundamental. Right 

now we have under the HRO, Haiti Recovery Act, which covers—

you have binational industries. You have, for example, a group in 

the Dominican Republic that straddles the border, with Haitian 

labor, and it is a model that can be used. And that is particularly 

important because the name of the game in Haiti now is jobs. Jobs, 

jobs, jobs. In 2009, a study done by Paul Collier of Oxford University for the Secretary-General of the U.N., said that between 2009 

and this year, 2014, close to 1 million youths in Haiti were going 

to enter the labor market. Where are they going to work? 

The largest job creator so far in Haiti has been this South Korean free zone that has been in the north part. I think that ultimately, in 10 or 15 years they are going to create 20,000 jobs. So 

this is one of the issues in the Dominican Republic and they are 

talking exclusively on the issue of migration, and going back to the 

issue of the withdrawal of MINUSTAH. This is one of the issues 

that is creating a lot of anxiety in the Dominican Republic and 

rightly so, I think, but where are they going to go? Over to the Dominican Republic, and as I mentioned before, have 680,000 unemployed youths today. 

So no wonder that the last barometer of the Americas 2012 in 

looking at the rank of countries of people wanting to leave their 

countries to go live and work elsewhere, Haiti was number one, 58 

percent, and the Dominican Republic was fourth, 31 percent. Put 

that together. 

53

Mr. SALMON. Thank you, we are probably going to get buzzed for 

a vote in not a very long period of time and so maybe we can just 

each ask one more question if that is all right while the panel 

members still have a little bit of time. 

Dr. Espinal, my question is for you. As you probably know, the 

FDA is reviewing rules that will put new regulations on imported 

cigars. Could you comment on what kind of impact these new FDA 

rules would have on the Dominican economy? 

Mr. ESPINAL. Well, it concerns directly to me, because the place 

where cigars is made is my home town of Santiago. Those are 

where the best cigars in the world come from. 

I think it is part of a challenge. I think we have a thriving center 

of exporting the cigars. We are the largest exporter of hand-made 

cigars, premium cigars in the world and it generates jobs and bolsters our culture and also the industry. So we are watching closely 

and we hope our interests are taken into account realizing that the 

recent economy, in Honduras and Nicaragua and other countries, 

are relying on that industry to generate jobs, to generate hard income to the country and economic activity and trade and so on and 

so forth that if it is hurt, then we are going to be hurt economically. 

Mr. SALMON. What I am hearing you say is that depending on 

how the rules come out, it could have a real dramatic effect? 

Mr. ESPINAL. Definitely, you are absolutely right. 

Mr. SALMON. Thank you. Mr. Sires. 

Mr. SIRES. Thank you, Mr. Chairman. You know I have been 

dealing with Dominican Republic for many years. I love the Dominican Republic. I love its people. I have a great number of 

Dominicans in my district. But I have some concerns. I am concerned about the direction which the Dominican Republic is headed. This issue of Haitians, I think, is a bad sign. The issue of supposedly creating a court above the Supreme Court, I am concerned 

about. 

I don’t know exactly where the relationship between Haiti and 

the Dominican Republic is today. But one of the times I was in the 

Dominican Republic, there was talk about creating a wall. I hope 

that is dead, to build a wall between the Dominican Republic and 

Haiti. I hope that is a dead issue. 

I am quite frankly concerned, as we crack down on the drug dealers and the contraband in Central America, that now they are 

going to come over and increase its activity in the Dominican Republic. We already have got 6 percent. Already, there is a 6-percent 

of shipments to America and to Europe. So I am concerned. I just 

hope that in the next couple of years we are able to work together 

and deal with some of these issues. I will look forward to working 

with anybody that comes to my office to deal with this issue. This 

issue of taking the citizenship away from some of the people that 

were born on the island I think is a bad sign. It is a bad sign. 

Mr. ESPINAL. May I comment? 

Mr. SIRES. Sure. 

Mr. ESPINAL. If I put the Constitutional Court in context of how 

it came about, there is a commission of 13 constitutional experts 

that were appointed by then President Fernandez to draft the constitution that then was submitted to the National Assembly. I was 

54

a member of that commission. I was pro bono. I was not paid or 

anything like that and I was part of that committee. There was 

conflicting views about what to do with regard to having or not 

having a Constitutional Court. Myself, I was against it. 

What happened? The influence of European law, you know, in 

Europe they have Constitutional Courts. In the U.S., you have the 

Supreme Court. In the European tradition, they have a traditional 

Supreme Court, but also they have a Constitutional Court, it is socalled Hans Kelsen model. In Latin America, we are adopting that 

model increasingly. And the Dominican Republic is in that trend. 

And the majority of the Commission, and the majority of the National Assembly, adopted the European law. There was nothing political about that. It was just a model of dealing with the Constitution and constitutional issue. 

Secondly, and then the Constitution says for the first time that 

the rulings of the Constitutional Court are binding. So we have to 

obey what it says and the lower courts, the normal courts have to 

obey the precedence of the Constitutional Court. It is in that context that the Constitutional Court ruled on the nationality or citizenship question. It interpreted the Constitution in a given way. 

We may agree or disagree with that, but that was the interpretation. And as you know, the Supreme Court of the United States has 

made decisions over the years beginning with Plessy vs. Ferguson

and ending in whatever you want to name it and people have difficulties or differences with the decision, but you obey what the Supreme Court decision says. And we have to obey what the Constitutional Court decides and the government has obeyed. 

What is important here and I will close my remarks, my comments here is that there has been a political and legislative response to problems and situations that were created as a result of 

the decision by the Constitutional Court. My belief, my honest belief, is that that response, legal response is effective, is the appropriate one, and is politically viable in the present circumstances. 

Mr. SIRES. Thank you, Dr. Espinal. And by the way, I am sure 

the cigars, a lot of those seeds came from Cuba. 

Mr. SALMON. Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. I was sitting here listening to Mr. A ́ lvarez talk about jobs, jobs, jobs. I think about the 

tie-in there. I came to Congress to focus on three things, jobs, energy, and our Founding Fathers. Jobs, putting Americans to work, 

putting Dominicans who are putting Haitians to work, jobs. 

Unleashing that innovative and entrepreneurial spirit and nothing 

exemplifies that spirit more than the energy sector. Energy is a 

segue to job creation whether it is running new electrical transmission lines in Haiti or whether it is providing that power 

through power generation in the Dominican. So jobs, energy, and 

our Founding Fathers focuses limited government, free markets, 

individual liberties, self-governance, and all those things that we 

support. If you take jobs, energy, and our Founding Fathers, that 

creates an acronym, JEFF, and my name being Jeff, I am all about 

that. I am all about that. 

Mr. SALMON. You should do a commercial like that. 

Mr. DUNCAN. It is campaign season, right, I think. But it is 

something I am passionate about. As I mentioned earlier in my 

55

opening comments, energy is a passion, but I understand the connection. We are putting Americans to work through our energy sector, whether it is in the gas fields off the coast of Louisiana and 

Texas or whether it is in the Eagle Ford or Barnett Shale or 

whether it is in Marcellus or whether it is up in North Dakota with 

the Bakken. People, Americans are being put to work. They are 

being put to work building tank cars to transfer the oil from the 

Bakken by rail on rail cars. 

There is tremendous opportunity in the energy sector, and those 

tentacles run far and wide. And so I see that as an opportunity in 

the Dominican Republic. I see that as an opportunity in Haiti. I see 

it as an opportunity in all the Caribbean nations, and I see America sitting here with the expertise to help make it happen. 

So I hope those relationships will continue to be forged and will 

be strengthened, because we understand the concern about Venezuela. We share that concern and so can America play a part in 

lessening that dependence on Venezuela, lessening that dependence 

on government that is oppressive and we see it happening in the 

Ukraine and Eastern Europe and Western European with their reliance on Russian gas and that pipeline can be shut off, that spigot 

can be shut off. Venezuela can do the same thing to the Caribbean. 

I get that. And that is why America is sitting here as a friend, and 

an ally, to the Caribbean nations with the ability to export LNG, 

and abundance gas and oil, to help you meet your energy needs 

and bring that expertise to the island nations to help you meet 

your infrastructure needs and help you become efficient and put 

Dominicans and Haitians and Puerto Ricans, all of them to work. 

Creating those jobs that Mr. A ́ lvarez talked about. So jobs, energy 

and our Founding Fathers on our side—the same equation works 

there as well. And with that, I yield back. 

Mr. SALMON. Mr. Meeks. 

Mr. MEEKS. Thank you. Dr. Espinal, let me just ask and first I 

want to subscribe to what the ranking member had indicated. 

First, sometimes I was thinking maybe it is just us and the United 

States would have concern about the tribunal ruling, but then I 

saw also that CARICOM said that the recent legislation ‘‘is far 

from satisfactory and did not go far enough in addressing the grave 

human rights effects of the ruling on nationality as it restored the 

nationality only to a limited number of persons affected by, but left 

an overwhelming majority stateless.’’ So it is even other countries 

in the region that are also concerned. 

Two quick things. One, just from your viewpoint is there anything that you think that we can work on together? It is an issue. 

It is not going to go away. It is an issue, they had the U.N. talking 

about it with the reference to statelessness. So it is not going to 

go away. And the DR is too important a partner and friend for us 

to let—we need to focus on other things. 

So I was wondering if there was anything that you think that we 

can do collectively to begin to fix the thorn that we currently have 

in our relationship, and apparently a thorn in the relationship with 

other countries in the Caribbean also. And lastly, whether or not 

because of the tribunal, has that caused any difficulty with the bilateral relations between the Dominican Republic and Haiti, beVerDate 0ct 09 2002 15:47 Sep 23, 2014 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 F:\WORK\_WH\072314\88831 SHIRL
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cause I know those were good conversations that were going on and 

whether or not the tribunal ruling has caused any conflict there? 

Mr. ESPINAL. Thank you, Mr. Congressman, for the question. I 

am not going to minimize how controversial the Court’s decision, 

the Tribunal’s decision was. And I can see there will be people who 

may disagree with the legal response that the Dominican Government, together with the legislation, have presented in response to 

the problems created by the Court, by the decision. However, there 

are others who have said that the response was the correct one. 

Vice President Joe Biden was in the Dominican Republic and expressed it. The Secretary General of the U.N. was recently in the 

Dominican Republic and said it. The president of the European 

Council was just 2 days ago, yesterday in the Dominican Republic, 

and said they were very pleased how the government responded. So 

these are very important people that have looked into the matter 

and have received advice, and they have said that they are pleased 

with the response. So I think we are accompanied as a country, as 

a country we are accompanied by very good people saying that this 

is the right way to go. 

As far as cooperation is concerned for your part, I am going to 

mention one. One of the problems that we are having, for instance, 

we have one category of people is those typically, exclusively migrants. Santiago Canton has referred to migrants only. Sorry, migrants and other categories, but migrants only, one of the problems 

they are facing is that they line up to get the naturalization, close 

to 100,000 people, and perhaps only 10 percent have documents 

from their own country from Haiti. They don’t have a document 

that can say who they are. And the Haitian Government is charging them whereas our Government is not charging them one penny 

for doing the process, not even back taxes or any fees. So it is important to help Haiti get the resources to help their citizens to get 

documents so they can get naturalized very quickly. That is very 

important. 

And your last question was? 

Mr. MEEKS. The relationship, bilateral relationship with Haiti. 

Mr. ESPINAL. Bilateral relationship with Haiti. Very, very important question. Last year, the Haitian Government has taken some 

decisions regarding trade relations and has unilaterally imposed 

sanctions against the exports of certain products from the Dominican Republic. That has created some strain in the relationship. 

But what I see very positive, very, very positive is this dialogue 

between the authorities of the Dominican Republic and Haiti, including yesterday, between the President of Haiti and President of 

the Dominican Republic. We are looking at each other, face to face, 

saying let us work together, the problems that we have in terms 

of trade, in terms of security, in terms of other matters and come 

up with solutions that can be practical and effective. 

One of the issues was the trade issue. That was a concern of the 

Dominican Republic and I am very optimistic that these trade 

sanctions on the part of Haiti will be eliminated and trade will increase in both countries. But I could say and I close my remarks 

and my comments here, I say that there is a very positive atmosphere, very positive atmosphere between the high authorities of 

both countries. And you have your friends in both countries and 

57

you can ask and you will find out that what I am saying now is 

exactly the truth. There is a momentum that needs to be reinforced, that needs to be helped, that needs to be supported. This 

is a sign to support that process. And this is a sign to help the Dominican Government to move forward with the solution that I repeat is rooted, I think, I believe, as a Dominican citizen, it is rooted 

in values that is effective legally and is politically responsible because it is the viable, political solution in the present circumstances. 

Mr. MEEKS. Let me just conclude with this statement because I 

agree with Vice President Biden. I think what Vice President Biden 

said was that it was a step in the right direction, not that it was 

all good or that it resolved the problem. So you made a step in the 

right direction, but I believe that there are other steps that need 

to take place to make sure that we resolve this issue. 

Mr. SALMON. Thank you very much, gentlemen. You have been 

really more than generous with your time. I hope you understand 

from our comments and questions that we consider our bilateral relationship with the Dominican Republic to be one of great, great 

importance. Also, the Dominican Republic has really been a great 

example for other countries in the region in so many areas. And 

as we move forward, we just want to make the relationship better 

economically and in every other aspect. But I think that on the energy issues, some of the things that you brought up, Mr. Gluski, 

about maybe looking into some of the options on short-term financing and utilizing OPEC or the Ex-Im Bank or other entities to try 

to facilitate, I think those are great, productive recommendations. 

I want to thank the members on the panel for a great hearing. So 

thank you very much and with that, this hearing is adjourned. 

[Whereupon, at 4:20 p.m., the subcommittee was adjourned.] 

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