Dominican Republic: A New President Ushers in New Era for Investment Promotion

Danilo Medina assumed presidential powers of the island nation of the Dominican Republic (DR) last week and  with his arrival came the appointments of the new director of the country’s investment promotions agency, Centro de Exportación e Inversión (CEI-RD), Jean Alain Rodríguez and sub-director general Carlos Pared Vidal.  Rodríguez replaces the popular Eddy Martinez (who occupied the post for over a decade) and is widely heralded as the man who brought the contact center and BPO industry to the Dominican Republic.

Medina declared victory after a close fought race – winning 51 percent of the vote to former president Hipolito Mejia’s 47 percent.  Mejia accused Medina’s Dominican Liberation Partly (PLD) of vote buying and improper use of government resources to campaign; he did not concede.

The Organization of American States (OAS) acknowledged that “During the day of the election, the observers confirmed the purchase of identity cards and votes by supporters of the various forces in the election,” but it was “a few isolated incidents between supporters that did not affect the normal functioning of the elections.”

Time of Transition

Medina succeeds two term President Leonel Fernandez who presided over big infrastructure projects, the transition of the service sector overtaking agriculture to be the economy’s largest employer, and strong growth rates.  Despite that, Fernandez failed to make a big dent in income disparity; the DR’s richest 10 percent of the population takes home 40 percent of GDP.

Medina plans to combat the stigma of the ‘opportunities for some’ economy by investing more in education than administrations past.

“One of our first actions as government will be to declare the end of illiteracy as a national priority.  We have assumed and will make good on the promise to dedicate four percent of GDP for pre-university education.  It will be an effort without precedent in our history that will necessitate an intense reordering of priorities and quality of public spending.  Nobody cast the slightest doubt, we will honor our commitment,” Medina was quoted by Noticias Sin, a DR based news source.

BPO Impacts

Many in the private sector have other considerations on their minds.

“My biggest concerns are corruption and fiscal reform,” stated Christian Corcino, CEO of Santiago based Intellisys.  “I don’t think there is a lot of expectation for change, but let’s give him the benefit of the doubt,” he said when referring to Medina.  “It is good that they decided to limit salaries of public officials and the one presidential term limit is being talked about as a political advancement, but it’s not a panacea and could invite short term thinking.”

Rudy Ganna, CEO of Laurus International Enterprises, a premiere DR based contact center and BPO firm thinks one four year term with consecutive terms prohibited is a bit extreme also, but holds hope for Medina’s term.

“He is a very smart person, he helped reorganize the PLD and now he promises to restructure critical aspects of the Dominican government.  Some people are a bit disappointed that there were not even more changes upon his taking office, but there are two significant dates that initiate change in the DR: the 16^th of August and the first week in January.  Medina is being pragmatic in that he knows you cannot make all the changes at once.  I expect that more changes will arrive in early January as well,” said Ganna.

Some in the DR felt disillusioned that Euclides Gutiérrez Félix, Superintendent of Insurance, was left in place after having very public corruption accusations brought against him by journalist Nuria Piera.

“Knowing that the principle motor of the Dominican economy is foreign investment, we have set an aggressive strategy to bring more investment to the country showing our strategic geographic location, economic stability, natural resources, and above all our institutional and legal security,” Rodríguez was quoted in Santo Domingo’s El Nuevo Diario.

Figuring FDI

Clearly, the ability to stoke foreign investment is of the utmost importance, that’s why the appointment of Rodríguez to head of the CEI-RD is so crucial. Rodríguez plans to build on the DR’s position of being the largest recipient of FDI in the Caribbean.

“Knowing that the principle motor of the Dominican economy is foreign investment, we have set an aggressive strategy to bring more investment to the country showing our strategic geographic location, economic stability, natural resources, and above all our institutional and legal security,” Rodríguez was quoted in Santo Domingo’s El Nuevo Diario.

Rodríguez did postgraduate studies in Europe, at the University of Rome and doctoral studies at Paris’s La Sorbona, as well as program at Yale.  His list of accomplishments in both the private and public sectors is long, in the private sector from 2005 until present Rodríguez served as Executive Director and Legal Counsel of Domicem S. A. and Managing Partner of JAR and Associates, which specializes in Investment, Trade, and Industry.  In the public sector, he has served as an Ambassador assigned to the Foreign Ministry and on their Ethics Committee, and acted as General Counsel to Dominican Customs Affairs for dealings with the World Bank, among other posts.

Despite all that experience replacing Eddy Martinez is like “changing a well-oiled machine,” remarked Ganna.