Punta Cana. Inflation in the Dominican Republic accumulates an interannual increase of 9.64%, but the Minister of Industry, Commerce and MSMEs, Victor “Ito” Bisonoensures that thanks to fuel subsidies, it has been possible to contain an additional rise of 3.5%.
In an interview with Efe, Bisonó also analyzes the strength of the free zones, the main export sector of the Dominican Republic, and addresses the trade agreement that the Caribbean country is negotiating with Colombia.
Ask- How much has the Government invested in these subsidies and how are they financed?
Answer- We have not taken loans for subsidies, but we have been based on savings, cuts and the “efficiency” of State resources.
That, together with the increase in collections as a result of the growth of the economy, has allowed us to invest this year 17,000 million pesos to date (about 308 million dollars).
I say invest because with that we have managed to mitigate inflation by 3.5%, and that means that society can be calmer and we can continue receiving investments and offset what we allocate to the subsidy of hydrocarbons.
Q- How long will these subsidies be acceptable?
A- In the economic team we review the outlook every six months. The budget is made once a year, but when we meet the volatility of the markets is so irregular that we cannot make longer-term plans. We see it in the medium term, aware that there are situations that we may have to put in order. That says the volatility of the market.
FREE TRADE ZONE
Q- Free zones are experiencing full growth in the country, but the sector has called for a more aggressive promotion campaign?Is there a definite plan in that direction?
A- Definitely. We, since we arrived (to the Government), with a clear strategy in the management of free zones, have communicated with more than 350 companies with American capital (…) to attract these investments.
The nearshoring (relocation to a nearby country) in the Dominican Republic is a reality. This year we have reached, to date, 185,000 direct jobs. Each job of those carries three indirect jobs.
When we assumed the Government in August 2020 we found 135,000, that is, we have increased by 55,000 jobs, plus indirect ones.
In export numbers we have reached a record number of $7 billion only in free zones and this year what we are going forrecorded by the balance of the first quarter, we will reach 200,000 direct jobs and 8,000 million dollars by the end of the year.
TRADE AGREEMENTS
Q- A trade agreement with Colombia is being negotiated What objectives does the Dominican Republic pursue and what sectors can it benefit?
A- We have been working to see which are the partners with whom we can have a win-win. In that we started with Chile, a partial trade agreement has already been sent and we are moving forward with Chile.
Then came the President of Colombia, Ivan Duque, and states that the trade balance is very much in favor of Colombia and that he even wanted to help the Dominican Republic to have a better position.
And we have been analyzing how we can participate while always taking care of national production and businessmen who already have investments in the Dominican Republic.
Progress is being made to see what can be proposed to level out this business exchange and then move forward. And for this there is a national commission of negotiation trade in which the private sector is present.
NO TIME FOR CHANGES
Q- An IMF mission that visited the country in May pointed out that there is room to expand the tax base and rationalize tax exemptions. Does the Government have any fiscal reform project in this direction?
A- We tried to do it last year, it was not possible (…) In the midst of a pandemic, in the midst of a crisis, in the midst of the volatility of the markets and of “commodities” (raw materials) it was not the time. And it is not yet time.
