The Government has the goal of reaching 200,000 jobs in the free zone sector by the end of this year or the beginning of the next. However, there are external factors that pose a challenge for this and the industrial competitivenesssuch as the increase in the prices of raw Materials and delays in maritime cargo, due to the pandemic and the war in Ukraine.
the cost of raw Materialsthe transport maritime and land, and the tax burden were the three factors that most affected competitiveness between October-December 2021, according to the Industrial Situation Survey, carried out quarterly by the Association of Industries of the Dominican Republic (AIRD). Raw material cost remained in first place for a fifth consecutive quarter.
“In the construction part, we bring a lot of metals from Ukraine, and that has skyrocketed,” observed Ulises Rodríguez, director of the Center for Development and Industrial Competitiveness (Proindustry), during his participation in the Free Dialogue of this newspaper.
“There are things that we do not control, such as international factors,” he emphasized. However, there are internal factors that the official guarantees have improved and help competitiveness.
“Energy, yes, could be cheaper, but it’s already cheaper,” he said. He attributed his argument to the system’s inclusion of alternative energy sources such as solar and wind.
Another of the elements he cited for improving competitiveness is the high level of vaccination against COVID-19 among employees. “Businessmen collaborated, the industry collaborated, and (during the pandemic) was able to maintain production, with the protocol in place,” he said. “I have spoken with people from several countries -from Colombia, from Panama- and I see that there is a common factor, all of them always recognize that: that the Dominican Republic went ahead, went ahead.”
Rodriguez also mentioned the transport as another factor. He indicated that it was possible to negotiate with the cargo unions. “We haven’t seen those crises that occurred with the truckers anymore, that has been minimized and free competition has been given more, that is, we are more competitive than yesterday in transport“, said.
The AIRD reported that the Monthly Index of Manufacturing Activity rose last March in relation to February of this year, going from 62.8 to 63.7, showing increases in the variables of Inventory of Raw MaterialsProduction Volume and Sales Volume.
When this index is below the threshold of 50 points, it reflects that the economic conditions and perspectives of the manufacturing sector are considered unfavorable. Above 50.0, the outlook is favorable.
Rodríguez also mentioned that the time it takes to verify merchandise at customs makes free zones less competitive. “Now that is a simple and fast process,” he said.