Sunday, December 10, 2023

The US has recognized the progress made in the Dominican Republic

The United States government recognizes the efforts made by the administration of President Luis Abinader to strengthen the investment climate in the Dominican Republic. Actions to stop administrative corruption and the independence of prosecutors are appreciated.

The assessment was informed by an analysis published by the Department of State of the United States, through the Office of Economic and Business Affairs, in which it examines the joint effort to address the problems of corruption and transparency which is a central issue for the social, economic and political development of Dominicans.

In its report, the US government appreciates the appointment of technically competent professionals in leadership positions and the creation of a civil asset forfeiture law.

“These and other efforts of the current administration have led the Dominican Republic to stand out as one of the few countries in the region where democratic values ​​and institutions are thriving. At the same time, however, the administration has not achieved all the stated objectives,” he said.

However, the State Department report highlights, many American companies and investors have expressed concern that, despite the improvements of the last three years, corruption in the government, including the Judiciary, continues to limit of investment success in the Dominican Republic.

He emphasized that foreign investors reported many systemic problems in the Dominican Republic and cited the lack of clear and standardized rules to compete and the lack of application of existing rules. The complaints, the report details, include perceptions of widespread corruption at the national and local levels of government; the lack of technical competence of the government; overly centralized and top-down decision-making structures, even on routine matters; delayed payments to the government; weak enforcement of intellectual property rights; bureaucratic obstacles, slow and sometimes biased judicial and administrative processes at the local level.

In addition, it shows that among the challenges that still need to be overcome are the inconsistent application of judicial decisions in favor of foreign investors; and non-standardized methods of customs valuation and classification of imports.

“Weak land ownership laws and interference with private property rights remain a problem. The public perceives administrative and judicial decision-making as inconsistent, unclear, and time-consuming. Lack of transparency and poor enforcement of existing laws are widely cited as the main complaints among investors,” the State Department report continued.

He noted that there is a tendency to reduce or withdraw major reform measures if they attract even a small level of public criticism, including the long-awaited reform of the electricity sector, as well as the tax reform believed to be most of the experts urgently needed in the country. More efforts have been repeatedly promised, including the passage of the law on public procurement, he said, but he noted that advancing the President’s regulatory and legislative agenda is likely to prove more challenging as the country approaching the elections to be held in early 2024.

It emphasizes that the Dominican Republic, a country of upper middle income, is one of the fastest growing economies in Latin America in the last 50 years, according to data from the World Bank. This shows that the gross domestic product (GDP) will grow by 4.9% in 2022.

In this order, it says that tax revenues are 9.9% higher than what was set in the initial Budget for 2022. It explains that, in addition to the discipline of the budget, the government maintains a deficit of 3.5% of GDP, below its goal for 2022. However, it shows that inflation at the end of 2022 is 7.83%, above the goal of 4.0% ±1.0.

“Despite the government’s efforts to reduce public spending and increase revenues, without significant fiscal reform, the public debt continues to grow in 2022, reaching US$ 51.8 billion (if adding the Central Bank debt, public debt reached US $ 68.9 billion. ) and a total debt service of US $ 7.1 billion, which resulted in a decrease in the debt-to-GDP ratio, but an increase in total amount of public debt. , he continued.

In this context, the Department of States criticizes that the government continues to use large subsidies in various sectors of the economy, such as the electricity and hydrocarbon sectors. It points out that in 2022 US $ 1.5 billion will be allocated to subsidies for electricity distribution companies (EDE) and US $ 663 million directly to fuels.

Government efforts, largely through the use of subsidies, to combat the effects of inflation caused by monetary policies fueled by the pandemic and exacerbated by Russia’s invasion of Ukraine, have largely kept the economy on the growth track. , with GDP growth for 2023 in the range of 4.4%. The Central Bank (BCRD) lowered the growth projection to only 3.0% by the end of the year, considering that in August the economy grew by only 1.5%.

World Nation News Desk
World Nation News Desk
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