The Listín Diario reports that the free zone sector, based on the quality of Dominican workmanship and the managerial capacity of its executives, is growing. The industry’s survival and growth is dependent on the continued diversification of its industries, a trend that is now apparent in the free zone sector. Thus, Dominican free zones are able to compete internationally, despite the intense competition that obliges these to cut costs, production cycles, and keep quality high. The free zone sector contributed RD$6,512 million in salaries and services last year to the Dominican economy. The free zone sector is known for implementing modern production technologies, continuous personnel training and optimum production processes. After a slight slack due to the initial competition of Mexican free zones benefited by the North American Free Trade Agreement, Dominican free zones seem to be holding their own. The National Council of Free Zones says the free zone sector has gotten off to a rapid start this year. In the first two months of the year, the NCFZ has approved the installation of 17 new companies. The executive director of the Council, Gabriel Castro González, said RD$157.8 million will be invested to install the new companies, creating 2,098 new jobs and generating hard currency for US$8.9 million. Furthermore, two new industrial parks that will be installed with an investment of RD$200 million pesos will generate 10,000 additional jobs. Castro González also highlighted the diversity in the industries now coming to the country. He said that while in the past 50% of the companies to be installed were in the textile sector, now assembly operations to produce cigars, jewelry, luggage, services, metal mechanics and handicrafts are being installed in addition to apparel industries. Furthermore, he said several companies that have been operating in Dominican free zones are expanding their operations, which shows the trust of the investors in the investment, social and political climate of the nation. He said the free zone sector should grow 15% in 1998, reaching a total of 195,000 jobs. Exports are forecast to be more than US$2,500 million. Textile exports are up 30%. Likewise, non-free zone Dominican companies are integrating with the free zone operations. This factor, in addition to the increase in the diversity of industries, is expected to be the base of continued growth of the free zone industry. Castro said that the free zones are a model for other regional countries and are the principal export companies. Some 446 companies operated last year, in 40 established parks, with a definite impact on their communities. At the end of 1997, there were some 182,000 persons employed, and another 270,000 indirect jobs, or 12% of the total economically active population. Minister of Industry and Commerce, Luis Manuel Bonetti recently said that the free zone industry is the industry which most absorbs labor, and most creates jobs. Central Bank statistics show that the sector contributed US$700 million to the Central Bank for payment of personnel and services, up 28% compared to 1996. Economists indicate that every week some RD$110 million is paid in salaries, or RD$5,280 million a year. Free zone purchases on the local market are more than RD$400 million a year. Free zone exports were up 16.6% compared to 1996. The Dominican Republic is the seventh largest supplier of textiles to the United States, after China, Mexico, Hong Kong, Taiwan, Canada and Korea.
