DR has diversified its exports but not its markets
A recent report by the World Bank advises the Dominican Republic to improve the quality of its farm produce exports, strengthen its duty free manufacturing export sector and open new markets.
The World Bank says the country has diversified its export products, moving from being mainly based on apparel exports to include medical apparatus, footwear, chemicals and processed food products. Nevertheless, the United States and Haiti continue to buy 70% of all exports. Growth of exports since 2000 is below that of Colombia, Honduras, Costa Rica and El Salvador, says the report, “Fostering Dynamic Growth of Exports in the Dominican Republic.”
“In recent years the Dominican Republic has been able to position itself well competitively, says Cecile Niang, senior economist for the World Bank in the Caribbean in competitiveness and trade matters. She added that the study identifies the three main challenges to help the country’s achieve its exporter potential as quality, duality of export basket and concentrating on two markets.
Regarding quality of exports, the study revealed that Dominican products suffer more returns in US Customs than those of other DR-CAFTA countries at 8% in 2011-12, which is down from 17% in 2002-04. The report says that Dominican free zones are taking the first steps to meet the World Trade Organization requirements for the elimination of export subsidies. The study recommends reducing the difference in privileges granted to exporters from free zones and those operating outside of free zones and increasing the supplies and inputs purchased by the free zone industries in the local market to contribute to job creation nationwide. According to research from the Enterprise Surveys division of the World Bank, foreign companies in the DR imported 70% of their inputs, compared to the 58% average in the rest of DR-CAFTA countries. Logistic and administrative barriers affecting Dominican suppliers and free zones to improve productivity, says the report.
The challenges include expensive and unreliable electricity supply, and limited supply of qualified labor.
Regarding the business climate, the study says the DR is still below many other countries in the Caribbean in the World Bank Doing Business rankings.
The report recommends improving access to international markets for farm products to mitigate rural poverty, and drawing up a national exporter support strategy to open new markets.
Source: DR1, Bancomundial
March 14, 2015
Category: DR News |