Fair kick for a square deal

FDI has steadily increased in the last few years, reaching over USD2.2 billion. What factors make the country such as an attractive destination for investors?

One of the main points of attraction our country offers foreign investors is macroeconomic stability, something we have enjoyed for a long period of time. Additionally, the current government undertook a fiscal reform that enabled us to progressively reduce a moderate fiscal deficit. We stabilized things and increased the amount of foreign capital, which has boosted our international profile. On top of that, the country has registered high growth rates, well above the average in Latin America; we have grown at over 7% in the past three years.

How do you make sure the country’s growth levels are inclusive and contribute to a reduction of the 32% poverty rate in the Dominican Republic?

Some 12 to 13 years ago, the country was affected by a severe internal economic crisis that drove up poverty levels nationwide to unusual levels. However, we have done a great deal to reduce these in the last few years. The government implemented special policies to tackle this and we already see the results. Two examples are our social assistance policy and the investment in education infrastructure. We have done a great deal over the last few years, but we need to continue making sure that growth in our country is inclusive and that we continue to reduce poverty levels, which is why it is important to continue working to improve competitiveness indicators across key economic sectors as that will promote inclusive growth and bring development to all regions and every community. Competitiveness means reducing informality levels and increasing salaries.

How do you balance efforts to collect taxes from large companies and maintain the attractiveness and competitiveness of the country for foreign investors?

We understand that competitiveness levels are not directly related to tax problems; competitive companies pay their taxes with no problem. The most competitive countries are those where companies pay high taxes. In the Dominican Republic, there is a perfect example of that in the difference between tourism and FTZs. Companies in the tourism industry pay relatively high taxes and that sector keeps growing, whereas FTZs do not pay taxes and their growth has come to a slow down. The recent growth in the latter has been a result of the arrival of new industries. Competitiveness can be reached through other actions the government can implement like infrastructure, resources, training, and support in the expansion to new markets.

What are the administration’s main goals for 2017?

One of our main goals is to make economic growth more competitive and inclusive, meaning those sectors with stronger growth levels reduce the levels of informality and increase salary levels. At the same time, another priority for 2017 is to improve social programs in areas such as education and health. We also have to further reduce poverty levels. We will further improve the country’s tax base, which must start with certain improvements in the administration already taking place. We will need to reach a fiscal pact between the government, the main economic actors for which the government commits to using public funds more efficiently, and the main economic actors committed to paying more taxes.

What is your overall outlook for the Dominican economy for 2017?

We need to keep growth and development at the same levels as the last few years. Economic stability is a must to keep current levels of development and FDI. We just need to make sure this development is socially inclusive. The tourism industry has played a key role in the economic growth of the country and will continue to do so, for it shows high levels of dynamism. Thanks to its development, we have seen other sectors such as construction, telecommunications, and finance following suit. The agricultural industry and FTZs will also drive the country’s economic development.