Q What are the main objectives of the government’s foreign investment strategy?
A The Dominican Republic is actively promoting our country as an ideal investment centre in the Caribbean and the rest of Latin America. We are interested in projects that fulfil our strategic goals to promote employment and at the same time enhance our country’s position in new technologies and IT in general. We are going through a transition period, above all in the key areas of free zones and tourism. We are trying to diversify investment away from the traditional textile sector, while at the same time improving on this industry by setting up clusters.
Q How do you plan to achieve this diversification?
A There are basically two ways to do this – firstly, through the geographical diversification of our major investors, and also by diversifying our export markets. In general terms, we want to attract foreign investment in micro-electronics, health services, high-tech manufacturing, auto parts, electronic components and services like telecoms and IT. We also want to develop call centres, not only for the Spanish-speaking public in the US, but also in English for that market as well as Europe.
Q Would you say that the country’s current economic climate is favourable for FDI?
A Absolutely. FDI has become a crucial part of our economic development, especially in sectors like tourism, telecoms and construction. This has come about thanks to a positive business climate in which confidence in the Dominican Republic has returned on a local and international level. People recognise that we have achieved greater economic stability and transparency, which are two basic cornerstones for promoting the country. The business community feels confident, they are aware that the legal framework is solid, and we have an efficient judicial system. To this must be added a highly skilled labour force and competitive costs.
Q Is the country’s infrastructure sufficiently developed to support higher levels of investment?
A The country’s infrastructure has improved significantly. Our telecoms system is considered one of the most advanced and cost-competitive in Latin America. This is largely due to the extensive amount of foreign investment in this sector by companies like Verizon, Tricom, Orange/ France Telecom and Centennial. Cable and Wireless lines now total 3.5 million and the cost of a T1 connection is the lowest in all of Latin America. Our per capita consumption of telecoms is actually higher than that of the US.
We have 13 ports in operation, and it is worth mentioning the world-class Caucero megaport. We have an excellent air transport network and some $100m in new foreign investment is going into this area to improve the infrastructure of several international airports, such as Samaná, Puerto Plata and Las Américas in Santo Domingo. We have designed a business model that favours the development of private sector investment in airports, ports and roads. What we have achieved in terms of modernising our airports can be applied to other infrastructure projects.
Q Are there any plans to improve the legislative framework governing foreign investment?
A We are constantly monitoring the legal framework, examining best practice in comparison with other countries. We are looking at ways to improve our laws that protect investor rights. This framework will become increasingly attractive for investors. We currently have a team looking at ways to improve the legal framework of our free zone network.
Q When do you expect to overcome the problems of bureaucracy as an obstacle to investment?
A This is less of a problem today than in the past. We are getting close to a one-stop shopping system in which all government agencies can channel the bureaucratic procedures for investment, such as licences and permits, with a view to shortening the approval process. This is what we are starting to achieve here at the Export and Investment Centre [CEI] and is already operating in the export sector.
As for foreign investment, conservatively speaking, we expect one-stop shopping to become a reality in three or four months’ time. We designed an investor road map as long ago as 1999 under the first administration of president Leonel Fernández. This was for the tourism, agricultural and infrastructure sectors. We are now reviewing this legislation with a view to setting up this one-stop shopping system for all foreign investors.
Q There are a lot of countries in the region chasing the same business. What do you see as the Dominican Republic’s competitive advantages?
A We recognise that we are in a very competitive situation, and I would say that in the first instance, one of our principal advantages is the government’s support of the private sector. This is truly a pro-business government with a legal framework to support that strategy. We are fortunate to have a privileged geographical location that gives us a logistical advantage and preferential access to the world’s major markets, in particular the US, which is our main customer for goods and services.
This also applies to the Caribbean and Central America through various free trade agreements that enable us to boost our export to these two regions, and we also have access to the EU market. This gives us preferential access to a market of 800 million consumers. Wage and production costs are still comparatively low.
I would say that our only disadvantage is the power crisis, and the government is working full time to devise the right solutions to that problem. However, I believe this handicap is fully offset by the other advantages.
Q This government inherited a legacy of corruption that goes back many years. Do you see any end to this situation?
A I would say that we are working on solutions to this deep-rooted problem. The president has made a point of promoting transparency at all levels of government. He has stated that the government will not allow itself to be tainted by corruption.
Moreover, this is not just rhetoric. The president has sent a bill to parliament to ratify the UN’s anti-corruption convention. The president has also issued a bill regulating all government procurement in areas like public works, customs and taxation. This is a very clear example of the government’s policy to stamp out corruption.