National Competitiveness Council (CNC) aims to raise the quality of production and promote public-private partnerships for the Dominican Republic to increase its income through exports and, thereby, finance its development in a healthy and sustainable manner.
Rafael Paz, Executive Director of the CNC, weighs the weighting, emphasizing that through the Dominican Competitive National Strategy, 109 measures were approved in favor of the productive sectors of the country. The initiatives covered four essential pillars: trade facilitation, increased productivity and exports, innovation and job creation.
“Through these strategies an integral view is given to the process of productive transformation of the Dominican Republic,” ponders Paz, who spoke with a team at ElDinero, led by its director, Jairon Severino, during the Financial Breakfast.
With the objective of continuing with the strategy of converting the Dominican economy into an exporting one and promoting the competitiveness of its productive sectors, in 2018 the National Competitiveness Council was put into operation. Although its integration finally takes place in December 2017, its actions began to develop last year.
The Government has, according to Paz, the essence of making it easier to live and do business in the country and, through the reduction of bureaucratic obstacles, opportunities for entrepreneurs and small entrepreneurs are generated.
“The vision is to generate true economic empowerment to liberate the productive forces of the country,” says Paz.
In the case of trade facilitation, he emphasizes that the specific measures issued by the CNC have the vision of taking prompt administrative actions and whose implementation only requires an accurate instruction from the President of the Republic.
“In this framework are the reduction of times of incorporation of companies, to facilitate the insertion of business; and the bill that eliminates the minimum capital requirement for the constitution of companies, “cites.
In addition, the executive of the CNC qualifies the reduction of time for the issuance of health records and the establishment of automatic renewal as actions aimed at eliminating the bureaucratic obstacles that will allow economic activity to grow.
“With these measures the time of issuance of the records was lowered from two years to 35 days and the time of the renewals was reduced, in that same period, to just 24 hours,” he stresses.
Values health records as the gateway to trade, which were a hindrance to formality and entrepreneurship. “Many people do not understand that health records are the gateway for entrepreneurs to commercialize their products at a formal level, be it food, beverages, cosmetics or medicines.”
Also, Paz considers the reduction in time to obtain construction licenses as another important measure. “The Ministry of Public Works is issuing the revisions of the plans in a period of between 35 and 40 days, a process that took approximately 288 days.
This is a factor of impact, because the construction sector represents 8% of the country’s GDP, and is essential for tourism and logistics development. ”
Likewise, for the facilitation of trade, the schedules of the ports were extended. Currently they work from 7:00 in the morning to 10:00 at night, a measure that has doubled the port capacity and reduced costs by more than 20% for exporters, according to the CNC executive.
It clarifies that the reduction of time in the aforementioned measures does not indicate a jump in quality standards. “It is essential for the State to maintain compliance with safety standards. However, with improvements in the processes, investment in technology and human resources and the firm decision to respond quickly, we have managed to reduce time. ”
The actions for trade facilitation are complemented by decree 258-18, which establishes the National Plan for Regulatory Improvement. This decree granted the CNC the power to lift a radiographic record with the country’s administrative regulations and identify the procedures from which they are derived.
Paz reveals that for the first time the State will have an inventory of all the regulations that affect the productive activity by sector and type of activity and, in addition, a national inventory of procedures measured in more than 53 public entities.
The Dominican Republic does not know how many regulations it has, according to Paz, but as of March 13 when the results of RD + Simple are presented, the country will know all its regulations, procedures and the cost that these generate for the economy, in relation to its gross domestic product (GDP).
“We will have an accurate calculation of how much is required to raise the requirements that institutions require for each particular process, the time it takes the instructions to respond and the number of requirements per institution, for each procedure.”
“We will have a complete radiography of the permit and the procedure in the country, which will allow the State to draw up an improvement plan to reduce or eliminate unnecessary requirements and cumbersome procedures that limit economic activity,” he stresses.
This process had as an ally the National Regulatory Improvement Commission of Mexico, a regional body with experience in the subject.
“With their support we put into operation the ‘Simplify’ methodology and we worked with these 53 institutions to identify the procedures, times, actors involved and systematized information, which many of the institutions did not even have organized and this has allowed us to identify regulations that were not in a regulation, but in the office of a minister or the head of an institution, but that generated a step for the citizen “.
This map will also allow for the setting of priorities to improve sensitive processes for the economy, through the first Integral Regulatory Improvement Plan of the Dominican Republic.
“The country will be surprised with the information we will give this March 13,” says Paz. He emphasizes that “once things are measured they begin to improve, because what is not measured, does not improve”.
Productivity and export
Within the framework of the second pillar: productivity and exports, the Committee for Productive Development and Exports was created, which allowed drawing public policies towards national industry, free zones, agriculture, mining and tourism to turn them into the engine of national development.
The committee held 19 meetings with the private sector and was headed by the Administrative Ministry of the Presidency and five subcommittees led by the minister of each area.
Of 140 proposals that emerged in these meetings, 81 measures were approved, after being reviewed, agreed and validated.
One of them was the prioritization of agricultural products: cassava, avocado, banana, mango, cocoa, pineapple, coconut, meat, oriental vegetables and greenhouse. “It was identified that these have a great exporting vocation and great production potential in the country,” the CNC executive director pondered.
He cited, as an example, that cassava has a global market of 10 million tons of consumption and, nevertheless, the Dominican Republic barely supplies 0.02% of this market.
“We produce a lot of cassava for local consumption, but we have great potential to produce it for export.”
“In addition, these products are not only being declared as a priority at the resolution level, but we also analyze which of them have industrialization potential and identify the missing links to link them, both as a raw material and with added value”.
He argued that food industries are the future of a large part of Dominican industry.
The objective of more productivity and exports is, according to Paz, to support the sectors to reduce their costs and coordinate a strategy to boost exports.
“In the case of agricultural and industrial products, the State undertook to finance the first certifications of the exporters, with the commitment to the second export, that is, when these certifications must be removed again, the exporter will finance them.”
In addition, the Government decided to expand agricultural insurance and increase the amounts of financing to this sector. Paz highlights that it was agreed to include in the prioritized agenda of the Government and the National Congress the approvals of two bills that are essential: the laws of movable guarantees and reciprocal guarantees, denominated as the legislative package of economic freedom in the country.
In his opinion, these laws “will free small entrepreneurs and entrepreneurs from the grip of usurers in the country.”
Regrets that real estate remains one of the great pending issues. However, he ponders that with the new Law of Movable Guarantees, small entrepreneurs will have the facility to put their work tools and machinery as a guarantee of loans and, at the same time, continue producing to meet their financial commitments.
Simplified Taxation Process (PST)
Competitiveness measures are specified when a more friendly business climate is achieved, where there are no barriers to entrepreneurship, where it is easy to open the company and it is easy to pay taxes. Rafael Paz cites, for example, that the simplified taxation procedure (PST) will be put into operation, which will be called the Unique Special Regime, which will make the process of taxation of small businesses easier.
“As it was conceived, taxation was very difficult, so with the new regulation that will be issued, this procedure will be simplified and it will be a great success for the DGII and the Government.”
Paz emphasizes that it will also be an achievement for the Dominican economy, because the constant procedures, of payment of advances, payment of minimum taxes or minimum presumed income, of the tax on assets, will not have to be done through this tax and will to be a great window for the entrepreneurs of the Dominican Republic.