Santo Domingo.- Improving the investment climate, addressing educational gaps, and improving electrical services are key factors in boosting productivity and competitiveness in the Dominican private sector. These ideas come from the Private Sector Diagnostic (CPSD) report titled “Creating Markets in the Dominican Republic,” written by the World Bank.
During the launch of the report, Jade Salhab, private sector specialist, highlighted that 39% of Dominican companies face challenges in the business environment. These challenges are mainly due to cumbersome bureaucracy, lack of institutional cooperation, and fiscal fragmentation. Streamlining processes could reduce a company’s launch time by up to 27%.
Salhab emphasized the importance of better institutional coordination to attract investments, particularly in nearshoring. The country has diverse capabilities and competencies among institutions, but aligning them more effectively could generate better results.
Addressing the growing demand for highly qualified personnel is crucial. Despite the sophistication of the Dominican Republic, the educational system falls short, particularly in high-end industries. Education emerges as an important concern for the business sector.
Magdalena Lizardo, managing partner of Pareto, stated that education is a primary source of productivity problems. Although 75% of the active population over 15 years of age has secondary education, the completion rate is lower, around 49%. Education is vital for industries such as medical technology, which require increasingly sophisticated processes.
José Manuel Torres, executive vice president of the Dominican Association of Free Zones (Adozona), emphasized the challenge of finding qualified personnel, which makes the growth of certain industries difficult.
Marco Henríquez, general director of Henríquez y Asociados, highlighted the need for continuous investments in training to improve the logistics chain of the export sector. This is a critical factor in competitiveness.
It is also crucial to address the high costs of electricity and the instability of service in the Dominican Republic. Outages and network issues result in a 5% loss in sales. The World Bank and the International Finance Corporation (IFC) have made available a significant financial portfolio to improve this sector and promote competitive bidding for renewable energy contracts.
To overcome these challenges, the report recommends several actions:
1. Automate business establishment processes and digitize the acquisition of licenses and permits.
2. Improve specialized training programs, English language education, and attract foreign investment in continuing education.
3. Internationalize and streamline tenders in the electricity sector to reduce rates and promote renewable energies.