Business

Introduction

Columbus explored Dominican Republic on his first voyage in 1492. He named it La Espaсola, and his son, Diego, was its first viceroy. The capital, Santo Domingo, founded in 1496, is the oldest European settlement in the Western Hemisphere. In 1821 Spanish rule was overthrown, but in 1822 the Haitians reconquered the colony. In 1844 the Haitians were thrown out, and the Dominican Republic was established, headed by Pedro Santana. Haitian attacks led Santana to make the country a province of Spain from 1861 to 1865. The Dominican Republic is a lower middle-income developing country primarily dependent on natural resources and government services.

Although the service sector has recently overtaken agriculture as the leading employer of Dominicans ,ue principally to growth in tourism and Free Trade Zones, agriculture remains the most important sector in terms of domestic consumption and is in second place in terms of export earnings. Tourism accounts for more than $1.3 billion in annual earnings. According to the 2005 Annual Report of the United Nations Subcommittee on Human Development in the Dominican Republic, the country is ranked #71 in the world for resource availability, # 94 for human development, and #14 in the world for resource mismanagement.. The Dominican Republic enjoys a growing economy with CIA World Fact book stating a 10.7% Real growth percentage in 2006 even though Inflation holds a 8.2% in the economy.

(Dominican Republic News & Information Service, 2006)

The Environment of Business

A. General Information

The Dominican Republic in the West Indies occupies the eastern two-thirds of the island of Hispaniola, which it shares with Haiti. Its area equals that of Vermont and New Hampshire combined. The capital city is Santo Domingo, located on the south coast of the island. Tourist facilities vary according to price and location. Spanish is the official language. Though English is widely spoken in major cities and tourist areas, it is much less common outside these areas. Dominican Republic is occupied by 9,365,818 people, in which 95% are Roman Catholic. The labour force is spread into different sorts of business 17% agriculture, 24.4% industry, 58.6% services. Life expectancy of men is 71.34 years of age and 74.87 years for women, this means that Dominican women are tough and the men can’t handle them so they die first. (Joke!!) The government of the Dominincan Republic is based mainly on that of the United States. President of the Dominican Republic is both head of state and head of government. Executive power is exercised by the government. Legislative power is vested in two chambers of the National Congress.

(cia.org , Factbook , 2007)

B. Most Important import an export partners

The Dominican Republic’s most important trading partner is the United States. Other markets include Canada, Western Europe, and Japan. The country exports free-trade-zone manufactured products, nickel, sugar, coffee, cacao, and tobacco. It imports petroleum, industrial raw materials, capital goods, and foodstuffs. Exports accumulate a total $5.818 billion. Main export partners are U.S. 80%, South Korea 2.1%, and Canada 1.9%.

Imports cost a total $9.747 billion. Main import partners U.S. 48.1%, Venezuela 13.5%, Colombia 4.8%, and Mexico 4.8%. In the Western Hemisphere, the Dominican Republic is the seventh largest trading partner of the United States (following Canada, Mexico, Brazil, Venezuela, Chile and Colombia). The Dominican Republic is the 28th largest commercial partner of the United States in the world. The DR is among the world’s fastest-growing economies, and is already an important market for U.S. agricultural, fish, apparel, textiles and forestry products. For example, the DR is the 8th largest U.S. export market for corn, and the 5th largest export market for U.S. soybean meal, the DR is the 2nd largest export market for the state of Florida and for Puerto Rico.

(Office of Trade and Industry Information (OTII) 2005)

C. International economic community of CAFTA-DR

The Central America Dominican Republic United States Free Trade Agreement, which was signed on August 5, 2004, is designed to eliminate tariffs and trade barriers and expand opportunities for the workers, manufacturers, consumers, farmers, ranchers and service providers of all the countries. CAFTA-DR will instantly eliminate tax on more than 80 percent of U.S. exports of consumer and industrial products, phasing out the rest over 10 years. 80% of CAFTA-DR imports already enter the United States