Speaking at the Senate yesterday, Thursday 1 May, National Business Council (Conep) president Manuel Diez Cabral called for a reduction in the number of obstacles to doing business and exporting. The business leader highlighted that Dominican business will be faced with increased competition now that protectionism is gradually being eliminated as DR-CAFTA advances.
In the Dominican Republic informal and government employment is on the rise, but this is not the case for formal employment in the private sector. To encourage job creation, Diez Cabral called for eliminating the anti-export slant in the Dominican tax system, distorting taxes, pre-tax payments and other advance payments that push many businesses to operate in the informal sector. He called for more promotion of exports, a pro-export tax system, solution of electricity problems, improvements in cargo and passenger transport, problems with costs and access to financing, along with other measures.
Aquiles Bermudez of the Dominican Free Zones Association (ADOZONA) also spoke during the session, advocating for a comprehensive electricity pact and labor reform to rationalize labor benefits and create more jobs. He called for changes to the Customs Law 34-89, Free Zone Law 8-90 and Competitiveness and Industrial Innovation Law 392-07.
Representing the Association of Industries of the Dominican Republic (AIRD), Ligia Bonetti said that there was a lack of political will to renew the reinvestment of profits that expired a year ago. She also called for a more efficient export platform and the start of the single shop for foreign trade. She highlighted the US$3 billion trade deficit with the United States, mainly caused by the 56% increase in imports, while exports have not grown significantly. The spread between exports and imports to and from Central America is similar. Bonetti said that the country depends on unstable flows of remittances, investments and loans and that there has been only a 2% increase in exports in real terms despite the 6% increase in GDP from 2005-2012. She criticized the way that present economic model gives priority to borrowing abroad, the services industry and imports, instead of focusing on production and exports.