The Dominican Republic (DR) — with assistance from the World Bank, Inter-American Development Bank, the Caribbean Development Bank and other institutions — has instilled a clear strategy for economic development. Fortunately, the Dominican Republic is now reaping the fruits of such labor.
There are several facets to the economic growth in the Dominican Republic, but two pillars of such growth stand out. As outlined in the Caribbean Growth Forum, two of these pillars are improving business climate and modernizing the public sector, and these well-planed has created extreme progress in the DR.
The speed at which companies seek to register their businesses has decreased from 45 to 7 days. The rate at which property titles are issued and bills for bankruptcy law are finalized both occur much more rapidly. Ultimately, such changes benefit both small and medium-sized enterprises (SMEs) and creditors, since the former has greater borrowing capacity, while the latter has better protection.
The Dominican Republic’s business climate has also improved through the implementation of programs for non-reimbursable seed money to boost entrepreneurship amongst the youth. The Industry and Commerce Ministry created a training pilot to fortify business management practices to over 5000 SMEs.
These initiatives are crucial to empowering bright minds in the community to take risks on business endeavors and successfully manage such startups. Moreover, this also allows for greater attraction of investors, who seek to capitalize on promising entrepreneurial undertakings. SMEs already in existence would, of course, benefit from the training in commercial management.
Loans For Change
A significant stride to improve the business climate in the Dominican Republic came in the form of a $300 million policy centered loan from the Inter-American Development Bank in 2017. This effort seeks to support financial regulations in order to increase productivity, foster the creation of institutions to finance productive development as well as improve protection of contracts and transactions.
Additionally, this plan of action would update administrative processes, facilitate growth in competitiveness and help institutions that focus on promoting innovation and production developments. Finally, the loan would work to reduce evasion and avoidance of social security contributions by strengthening fiscal and social security systems, which would ultimately boost labor formalities.
According to the World Bank, the Citizen Observatory for Public Procurement and 25 other committees have been created to monitor public contracts. By doing so, the changes would:
- Foster private sector confidence
- Encourage SMEs to participate in public contracting
- Form greater transparency, especially in what is “open procurement”
In 2015, the Inter-American Development Bank financed a $25 million project that worked to develop the Dominican Republic’s fiscal structure. In doing so, the project enables the processes of planning, monitoring and evaluating budgets, and helps modernize the ways of conducting the management of public funds. In addition, the endeavor also fosters greater participation of SMEs — particularly led by women — in public purchases.
There are a set of focal points that would illustrate and improve the effectiveness of the strategies regarding the economic growth in the DR. The set includes creating a feedback-loop that would help assess reform implementation and accomplishment of goals, and therefore scale outreach and media interactions with stakeholders and set greater definitions of reforms, their timelines and other indicators of performance.
In the past decade, economic growth in the DR has been achieved through the execution of new strategies of development. These strategies, amongst other details, coincide with the DR’s 2030 National Development Strategy and have set the country on track for continued growth.
A Nation’s Future
The Dominican Republic, with the support of international institutions, is a step closer to accomplishing its goals. Already, the country has experienced success in many vital aspects of its economy’s sustainability, and its potential for continued growth is abundant.
– Roberto Carlos Ventura