SANTO DOMINGO, Dominican Republic – Unless immediate “heroic” measures are taken, the Dominican Republic will become less competitive and be powerless to reverse the decline in its exports, warned Manuel Diez, the president of the Dominican Industrial Association. With this in mind, reported Hoy, Dominican business leaders pressed the government to remove tariffs and create more tax incentives.
In response to private sector criticism, the executive director of the National Competitiveness Council, Andres Van Der Horst Alvarez, told El Nuevo Diario that the government had organised a productivity development forum for the end of April, at which it would announce the results of all its competitiveness initiatives.
“With all due respect to the Dominican Republic’s industrialists, we suggest that their competitiveness should not be based on the abolition of taxes or on tax incentives, as was the custom 40 years ago,” Alvarez said. He also issued a reminder that competitiveness is based on innovation, adding value, quality and competition in the local market.
The Economy, Planning, and Development Ministry also confirmed that measures had been taken to improve the country’s competitiveness and development. These included the abolition of all airport export taxes, the creation of a US$15 million export and investment fund and the formation of an export board and an investment cabinet.
President of the Dominican Exporters’ Association Ricardo Koenig told Hoy that he was optimistic that the new government measures would help to improve exports, citing Nicaragua and Costa Rica as examples of countries which have managed to increase exports despite the global recession.
According to the World Economic Forum Competitiveness Index – which benchmarks private sector performance – the Dominican Republic has lost ground over the last five years. The forum found that in 77 percent of the countries studied, competitiveness is related to innovation and development, corporate governance, the capacity of companies to adapt to technology, and the ability to export.