Policy Options for Dominican Republic on Trade Pattern Transformation

Abstract

Diversifying into new export varieties and entering into new industrial competition require creative ideas and political leadership. Discovering new promising fields is important not only for immediate export growth but also for long term economic development since it is a learning and evolutionary process.

Dominican Republic exports a large amount of primary products with low value add, for a greater involvement of exports relative to GDP, the Dominican Republic must join forces to produce and export higher value added product, this undoubtedly would produce an increase in the value of exports. The major source of exports growth in Dominican Republic has weakened, there are various reasons for this low growth rate of exports. The stagnation of free trade zones, which take up a significant portion of the countrys exports, delay in the discovery of new promising industries, and lack of systematic support are three of the most frequently cited reasons. While the textile industry in FTZs is in decline, no clear winner has emerged to replace it. The manufacture sector has to make a big contribution for growth first for economic growth and then for exports growth. Its difficult to implement an industrial targeting policy that is not basically in the line with where the private sector is planning to go. In that sense the new promising fields for improve the exports in Dominican Republic should go in harmony with the local producers and foreign companies in the country. Since no national economy can be equally competitive in all different sectors or industries, the promotion of selected sectors is an useful tool to achieve level of improvement in the trade performance.