The president of the Dominican Association of Industries, Lisandro Macarrulla, in an interview with Hoy newspaper, says the high interest rates on loans given in pesos and the high cost of power are the two major obstacles to doing profitable business in the Dominican Republic.
Macarrulla said that Dominican businesses cannot sustain the high interest rates. ?The high interest rates are of much concern because they are one of the leading obstacles to the development of the country,? he told the newspaper. Interest rates currently range from 25 to 40 percent for commercial loans. Macarrulla says it is no secret that banks are paying depositors 27 to 28 percent on their savings. He said that at the present cost of money it is impossible for any company to borrow in pesos for working capital. According to him, foreign investors can obtain their funding abroad at more competitive rates.
In the interview Macarrulla also advocated the elimination by the government of Resolution 15-01, which prohibits large industries from connecting directly to the main power grid as authorized by the Electricity Law. A former Superintendent of Power established a toll in favor of the power distributors, but Macarrulla says that the arguments to justify the issuing of that resolution no longer exist as government subsidies for power services were eliminated in September 2002. ?The power problem has had a very strong effect on local industries, because we are paying a much higher price for power than our competitors abroad,? he said.
