Dominican Republic
The Dominican Republic has shown steady growth in GDP and per capita income over the last few years, with one of the fastest-growing economies in Latin America. The Central Bank recorded 7.3 percent economic growth in 1998, although Hurricane Georges in September 1999 was a devastating setback.
Latin American tiger goes on growing
Banking and Finance
In agriculture, non-traditional products are becoming more prominent, such as fruit and vegetables, plants and cut flowers, marine products and processed foods. The Dominican Republic is now the region’s leading cigar exporter, ahead of Honduras and Cuba, with annual sales of around USD 400 million.
Telecommunications, tourism, construction and free-trade zones continue to be the major growth sectors. There are 52 industrial free zones with around 500 companies, and manufactured goods assembled here for the North American market generated exports of USD 3 billion in 1998.
The largest foreign-exchange earner nowadays is tourism, which generates 20 percent of GDP and employs about 5 percent of the labor force. By 1999 there were 49,623 hotel rooms, compared with 11,400 in 1987, and the tourism sector is adding about 3,000 rooms each year.
The financial system in the Dominican Republic includes commercial banks, mortgage banks, savings and loan associations, and development banks. The Central Bank regulates the money supply and controls official foreign exchange reserves. Development banks offer medium and long-term loans to finance projects in priority sectors like agriculture, tourism, industry, services and transportation. Better control and supervision of banking practices is already underway.
PricewaterhouseCoopers
“We know how local business operates here.”
Freddy Perez, Managing Partner PricewaterhouseCoopers
When PricewaterhouseCoopers came to the Dominican Republic in the late 1930s, it was the first Big Five to set up operations there. The company’s long-term commitment to the country has helped it achieve a client list that includes the biggest and most prominent companies operating in the Dominican Republic.
According to Managing Partner Freddy Perez, “We are the strongest consulting and accounting firm in the Dominican Republic. We have a lot of leverage in this country, and nobody else here is as experienced as we are. We are very well-placed in the business community.”
Eighty percent of PricewaterhouseCoopers’ clients are local businesses, not just major multinationals with a local presence. Mergers and acquisitions are an important component of the financial activities in the Dominican Republic, and PricewaterhouseCoopers has become the leading mergers and acquisitions consultant in the country. PricewaterhouseCoopers was the principle business advisor in recent strategic alliances formed between SID and Industrias Lavador (Mercasid), Mercasid, IndustriasVeganas (Induveca), as well as in the acquisition of Banco Osaka by Baninter, and the restructuring and reorganization of Delta Comercial, C. por A.
A significant percent of the firm’s business is derived from consulting, with the remainder concerning accounting and related services. For potential investors, PricewaterhouseCoopers can provide consulting services, help with contracts, and use its relationship with top local law firms to establish legal entities. “We know how local businesses operate here, so we can provide that link between American investors and the companies,” says Perez. “We can establish ventures, take care of their accounting and tax needs, and connect them with the right people,” explains Perez.
A key resource that PricewaterhouseCoopers offers is its network of contacts. Perez says that in the Dominican Republic it is essential to have access to key business people and government officials in a business-like, credible way. “That’s part of our job,” he says.
As well as offering one-stop-shop service, PricewaterhouseCoopers was the first in the country to introduce the latest methodologies in corporate value consulting. “We have been applying these principles for 10 years,” says Perez. “Everybody in this market knows that we are the leaders.”
Perez says that there is a wide window of opportunity in the Dominican Republic, as long as people know how to work in that market. “There’s a lot of potential in this country, so I encourage people to come in,” he says.
