Chris said:
The question that we started with Nals, is what is the Dominican Republic doing to create an opportunity under DR-Cafta and avoid a catastrophe like we see with the rice debacle in Haiti. The question is not how we rate against a whole list of other countries. So, what are we doing? Which meetings are we attending? Which alliances are we forming?
Well,
We are going to be able to go down a two-way street rather than the one way lane Haiti was forced into.
The rice debacle in Haiti was due to duty free imports into Haitian markets and Haitian companies not being able to export to US duty free. Unfair, but that is what occured.
In addition, Haiti did not adopted quickly to the things they did had an advantage, which was labor intensive agriculture while getting trade barriers to major markets to be dropped and let Haitian goods flow easily to them.
With us, we got thatand the inefficient enterprises here, which only causes costs and prices to increase when investment in those firms could have been used in more productive sectors, would go out of business.
A perfect example is the supermarket industry.
Before companies like Carrefour or Pricemart came into the picture, Dominican supermarkets were highly inefficient. Once those foreign companies came into the Dominican market, with their much more superior and efficient way of doing business, Dominican supermarkets did one of two things:
1. They adopted the new techonology and business model
2. They continued the inferior previous models.
Those companies that did #1, survived by becoming much more competitive.
Those that did #2 perished.
Today, the influx of Carrefour and Pricemart has actually increased the productivity of the Dominican supermarket industry to the point that our supermarkets are comparable to supermarkets in the developed world, ranging from abundant choice of food to pricing schemes to producing economies of scale, etc.
This same story repeats itself in other sectors.
Those who are willing to change will survive and improve productivity of the country. Those who don't will perish and the market will be dominated by foreign enterprises.
However, the improvement in productivity or the demise of local industry lies in the willingness of local industry to adjust to the new changes. Stuborn people never make it to the end.
-NAL