The discussions took place on August 11 and 12 in Casa de Campo, La Romana.

Susaintable Economic Growth

At the meeting, Moreno recognized that the Government’s outstanding management of the economy since 2004 had resulted in an important recovery.  Moreno pointed out that the Dominican Republic’s economic growth had been outstanding since the second half of 2004, and that moreover, a significant reduction in inflation had been achieved.

The meeting took note of the proposal elaborated by the Governor of the Central Bank and the Dominican economic team to recapitalize the Republic’s Central Bank.  Along the same lines, the Central Bank Governor highlighted the reduction achieved in financial costs related to Central Bank certificados, which due to their quantity and value comprise the operational deficit which is quasi-fiscal in nature.  

IDB President Luis Alberto Moreno also stated that in order to ensure inclusive growth, it is necessary to deepen the macro-economic measures already taken by the dominican government, and to adopt other measures that are pending.  Among these pending measures, the most important are consolidating the tax reforms of the last two years, improving the targeting of the poor in the government’s social expenditures, strengthening the Central Bank’s capacity to control inflation, and taking measures to increase the economy’s international competitiveness.

Moreno emphasized that future growth would require improvement in the Dominican Republic’s productive capacity, and that this would also contribute to a wider sharing of the benefits of that growth among the population. 

Implementation of DR-CAFTA

The meeting also discussed the importance of the entry into force of DR-CAFTA and addressed the main challenges and opportunities that this treaty represents for the government, as well as for the productive and export sectors. 

The IDB stated in its presentation that not only does the DR-CAFTA trade agreement open new markets for the Dominican Republic, it also offers an excellent opportunity for diversifying  the economy and increasing the country’s comparative advantages.

“Here we have a significant institutional challenge to create a credible management structure in the public and private sectors to facilitate new investments, and therefore new jobs for the dominicans,” concluded the presentation. 

Technological Innovation and Competitiveness

President Moreno proposed an open dialogue on how innovation and technological development could generate greater competitiveness in the Dominican economy, leading to increased production, new exports and higher employment.

He stressed that a key issue for the Dominincan Republic is ist ability to link the concept of innovation to its competitiveness agenda.  He applauded the initiatives led by President Leonel Fernandez in this regard, including the important progress made in the competitiveness agenda of the National Competitiveness Council (CNC), particularly the creation of clusters for production and exports.  He also noted the efforts of the DR Center for Exports and Investments (CEI-RD) to attract investments in technology, citing for example the Cyber Park of Santo Domingo (Parque Cibernético), which offers new opportunities for training young people for careers in technology.

The IDB President mentioned that the IDB has an important loan portfolio in the Dominican Republic, with projects that support various sectors such as education, health, basic infrastructure (highway maintenance, potable water, irrigation), modernization of the public sector, as well as various new areas such as competitiveness and worker training.   In total, the portfolio of approved loans amounts to US630 million, of which over half has been already disbursed to the country. 

The main priority of the Bank’s strategy with the Dominican Republic for the period 2004-2008, is support for poverty reduction.  This strategy is being supported with loans totaling US$611 million over the four year period.