DOMINICAN REPUBLIC - Economy
Minister of Economy, Planning, and Development, the Dominican Republic
Juan Temístocles Montás is a university professor, renowned politician, and author of various books about the electricity sector, politics, and economy in the Dominican Republic. He has completed a number of post-graduate programs in the Dominican Republic and Spain, and has distinguished himself in international conferences with the World Bank, the IMF, and the British Chamber of Commerce, among others. He has held various important positions related to the Dominican economy, and currently serves as Minister of Economy, Planning, and Development.
Macroeconomic stability is necessary to sustain achievements in welfare over time and to encourage economic growth. Also, we must ensure fundamental equilibrium in terms of the external, monetary, financial, and tax sectors. In order to maintain macroeconomic stability, the authorities approved a budget that reduced government spending and the deficit and passed a tax reform to raise revenues and keep public finances on the right path. Also, the Central Bank of the Dominican Republic adopted an inflation-targeting scheme that uses interest rates to signal the monetary policy stance. This scheme was envisaged as a framework for implementing monetary policy. The most attractive sectors for private investment have been ICT, mining, and tourism, which have experienced dynamic growth. These sectors will remain attractive to foreign investment in the near future. The climate, history, and accessibility make the country one of the biggest tourist attractions in the Caribbean region. Also, we have important open mineral deposits that make environmentally sustainable mining activity viable. The country also wants to attract foreign investment to its logistics and manufacturing industries to created higher value-added.
During 2013, the government had to adopt a more restrictive fiscal policy, increasing taxes and reducing spending, which has had an impact on the decisions of private agents and economic activity. It is a period of adjustment that, once over, should see economic activity and investment returning to natural levels. Growth levels in 2013 reached 3%, having had a slow first half of the year, but there was much more dynamism in the third quarter. We are optimistic for both growth and investment over 2014. According to the latest Business Barometer by Deloitte, 44.1% believe that the economic situation will be better in about a year, whereas 35.5% believe that the business and investment environments will also improve.
The Ministry has assumed two major challenges to boost economic growth in the country and make this process a more inclusive one. Firstly, we developed the National Development Strategy 2030, which defines the country Dominicans want for 2030 and the policies to be implemented to achieve it. In this context, we consulted over 7,500 people and 1,425 civil society organizations and they all expressed their views on the country’s image in 2030, including goals and policy guidelines. Secondly, we strengthened the National Planning and Public Investment System and implemented the National Development Strategy 2030. It was hard work that required training and coordination, and has already been reflected in three versions of the Multi-Year Plan for the Public Sector, which ensures the consistency of government investment guidelines to meet the goals of the National Development Strategy.
The relationship with the World Bank, like with other multilateral cooperation agencies, has been designed to support the country in its efforts to further develop its economy, financing projects in priority areas such as education, health, social care, energy, and governance, as well as supporting our budget and contributing to the country’s fiscal and macroeconomic stability. We are in the process of defining the new strategy with the World Bank. We want to prioritize two sectors: education and electric energy.
Strategic programs to support SMEs are one of the main priorities of our government. In this context, we created the Vice-Ministry of SMEs within the Ministry of Industry and Trade, which is responsible for the formulation and implementation of programs to promote and support this sub-sector. Currently, there are some ongoing plans, programs, and projects to promote the sustainable development of SMEs and facilitate their formalization in terms of business activity. As per access to credit, we created a portfolio of public credit for SMEs in the Central Bank of the Dominican Republic, which has Ps4 billion available for SMEs and an extra Ps600 million and Ps500 through the Foundation for Microfinance Reserves and PROMIPYME, respectively. Similarly, we created the Solidarity Bank with the objective of providing better access to quality financial services for low-income people, thereby facilitating the democratization of credit and the creation of social capital. We have also eased the regulatory requirements for the assessment and granting of credit to small borrowers through the adoption of the Rules of Microfinance. In addition, we amended the Regulation of the Law on Procurement and Public Contracting ct Procurement, aimed at simplifying the requirements for the State Register of Providers. This initiative has allowed the formal registration of a significant numbers of SMEs that supply the government. Furthermore, we implemented the virtual window platform at the national level and physical stop shop for the formalization of SMEs, which offer all services for the registration process, significantly reducing registration time and revoking the mandatory legal assistance in drafting the bylaws of SMEs.
Recently, we launched a new website, accessible from mobiles and other portable devices. The existence of open data requires availability and free access at any time, and no restrictions in terms of using and distributing data. For this purpose, we have established guidelines to standardize access to information, and our commitment is to implement them as soon as possible. Open data encourages the active participation of citizens not only with suggestions and proposals, but also with the generation of citizen content such as photos and videos. These are tasks that the General Government Directorate of Ethics and Integrity, under Decree No. 486-12, follows up in terms of implementation.
Proposals for the National Development Strategy 2030 are articulated around four strategic pillars with institutional, social, economic, and environmental themes. In this context, we want to develop a social and democratic state in which institutions act ethically, transparently, and efficiently, ensuring safety and promoting equality, peaceful coexistence, and national and local development. We want to promote a society with equal rights and opportunities, in which the entire population has access to education, healthcare, decent housing, and quality basic services, progressively reducing poverty and social and territorial inequality. We also want to integrate regional economies, boost innovation, diversity, and quality, create the base for sustained high growth in a competitive local market within a global economy. Finally, we aim to consolidate a society with sustainable consumption and production, managed with fairness and efficiency, protecting the environment and natural resources of our country. These actions are complemented by crosscutting policies aimed at ensuring public sector action and the guarantee of human rights, environmental sustainability, territorial cohesion, social participation, and the widespread use of ICT.
© The Business Year – January 2014
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