The Inter-American Development Bank (IDB) has approved a US$250 million loan to help the Dominican Republic improve its investment climate and boost productivity.
The fund will particularly finance the DR’s ‘Program to Improve Productivity’, which is designed to promote reforms that increase the productivity of small and medium-sized enterprises (SMEs).
SMEs account for 97% of all companies in the Caribbean country and 30% of its GDP.
Since the late 1990’s, productivity in the Caribbean country has been flat compared to other countries in Latin America and the Caribbean, the IDB said, adding that the reforms will kick-start the growth that the country has long needed.
First, the Dominican Republic must reframe its banking regulation in order for small and medium-sized firms to access financing. In addition, the IDB says, the nation needs to streamline administrative procedures and adopt measures that enhance the business climate.
An improved business climate, analysts believe, will help bring workers and companies out of the underground economy, besides strengthening government institutions and policies to stimulate productive development and innovation.
For now, anyone can register their company online in the Dominican Republic. In its recent Doing Business Report, the World Bank expressed concern at DR’s decision to increase construction permit fees, but praised the country’s new credit information system that promises to protect personal data and the operation of credit reporting institutions.
In addition, the Caribbean country has now made trading across borders easier by reducing the number of documents required for exports and imports.