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The Dominican industrial sector faces structural obstacles of the Dominican economy

SANTO DOMINGO. The Dominican industrial sector faces structural obstacles of the Dominican economy which impede its ability to compete in international markets, which ends up reflecting in a negative fashion on the nation’s exports.

This panorama is visualized by the Industrial Association of the Dominican Republic (AIRD), as they released last Saturday their first Index regarding the factors which affect the industrial competitiveness, to which they assigned a weight in percentages which is the result of the importance given by the industrial companies who were surveyed, and who operate in 20 branches of this sector of the economy.

The report reveals that the factor which is the greatest obstacle to Dominican exports is the cost and access to financing (13%) which the industry has to face in order to expand its capital, and carry out the necessary investments which will provid it with competitiveness. Following these are the tax burden (12%), and unfair competition and contraband (11%). Fourth-place in the hierarchy (10%) is shared by the factors “cost of raw materials,” “cost and supply of electric energy,” and the “availability and quality of human resources.”

It is noteworthy that the factor “labor legislation,” on which the media have been headlining with articles regarding the obstacles facing industry, the study grants the sixth place, together with the “exchange rate,” according to the perception of the companies surveyed.

According to the report, the AIRD will carry out a quarterly survey in which the companies can indicate the three external factors which most affect competitiveness, with the aim of creating a historical sequence regarding the behavior of those obstacles. These results “will have the potential of focusing efforts regarding industrial policies which seek to lessen these limitations,” explains the entity.

This study “put into evidence the urgent need of a thorough-going industrial policy,” which permits an improvement of the Dominican industrial capacity, in regard to exports, the generation of jobs that are better paid and a greater economic contribution to the state treasury, concludes the AIRD.

The growth of exports

According to the Central Bank, the economy grew by 6.5% during the first quarter of 2015. In contrast to this growth, during the same period total exports fell by 4.8%. This decrease is much greater in the case of the national exports (which did not does include that of the free zones): – 15.7%. In 2014, the total growth of exports was 5.3%, but if mining is excluded, the rate falls to 3.5%. However in 2013, exports, without including minerals, fell by 5.3%.

Source: DiarioLibre

June 22, 2015

Category: DR News |

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