DR attracts TT capital

The US$400 million invested in the Dominican Republic by Trinidad and Tobago business interests represents, in addition to the strengthening of a fellow Caribbean State’s economy, a continuing strategic shift from the old almost total regional dependence on North-South investments to South-South. The Trinidad and Tobago investor interest in the Dominican Republic was brought into focus a few days ago at a workshop, “Dominican Republic — Launch Pads for Caribbean Expansion”, at the Fourth Annual Euromoney/ Latin Finance Caribbean Investment Forum. Of crucial importance is that although the Dominican Republic’s economy was in crisis last year, TT investors taking the long term view substantially increased their financial stakes in the DR. The Dominican Republic’s economy is expected to strengthen even before year’s end. Meanwhile, it should be pointed out that the economy of the Dominican Republic had been adversely affected not largely from within but by an economic slowdown internationally.

One of the investors, the Republic Bank Group, acquired a 99.8 per cent shareholding in the Dominican Republic’s Banco Mercantil. And even though Banco Mercantil did not perform according to expectations in the first half of the Group’s financial year ending March 31 the Group nonetheless expects that there will be improvement in the second half.  Increased Trinidad and Tobago investments in the Dominican Republic have been facilitated by the 2000 Protocol for the setting up of the Free Trade Area between CARICOM and the Republic, the size of the country’s market, a population of more than eight million, and its Gross National Product. In turn, under the Agreement 85 per cent of the trade between CARICOM and the Dominican Republic is duty free. The Agreement has embraced also areas such as “market access with respect to trade in goods, treatment of goods and services produced in Free Trade Zones/Export Processing Zones and reciprocal promotion and protection of investment and Government procurement.”

The resulting stepped up two-way trade, specifically between Trinidad and Tobago and the Dominican Republic, is an added and needed plus at a time when entry access to the United States market for small manufacturers has been made increasingly more difficult by security measures and other requirements put in place by the US. Both TT and the DR have benefited from the increased two-way trade, and Trinidad and Tobago business interests investing in both countries enjoy the best of the proverbial two worlds, improved exports both ways (in addition to other markets) which in the end add up to expanded business and additional earnings attributable to shareholders.