A report prepared by eight economists commissioned by the Monetary Planning Department of the Central Bank, foresees an increase in the number of jobs to be created in the Dominican Republic as a result of the introduction of free market policies. The study also indicates that despite the reduction in tariff levels, the opening up of the Dominican economy to the outside world should allow the government to increase its revenues while reducing its current dependence on import duties.
The economic model used by the study implies, however, that even when such policies may benefit the economy on a macroeconomic level, they may still adversely affect some industries in different sectors of the economy.
Since 1990, under external pressure, the Dominican government has been instituting a series of economic reforms with a view to preparing the country for international competition. The trade regime has been simplified, non-tariff barriers have been gradually reduced, and tariff levels have been falling significantly; tax reforms have been introduced, and attempts have been made to revamp the incompetent and allegedly corrupt customs service.
UNDP researchers have, however, cautioned against the lack of integration of macroeconomic reforms with those at the micro level of individual industries. They have found that many local firms that had previously focused on the domestic market are now confronting difficulties in adapting to the new business environment resulting from global competition.
A good number of firms are plagued by deficient cost structures, a poor final product quality, lack of flexibility and reliability, out-dated organizational procedures and technology, and little exposure to international trends and developments.