Economic Growth

USAID Primary Goal

Help the people of the Dominican Republic build and sustain a democratic, well-governed state that responds to the needs of Dominicans, reduces widespread poverty and conducts  itself responsibly in the international system.

• Estimated Total Contribution: $55 million

BACKGROUND

The World Bank 2004 Poverty Assessment showed that 43% of the Dominican population is living in poverty, while 16% in extreme poverty.

In March 01, 2007 DR-CAFTA came into force for the DR.  In order to make the implementation of the trade agreement effective, greater efficiency and transparency is needed in customs procedures, protection of intellectual property rights, the enforcement of environmental and labor standards, sanitary and phytosanitary regulations, fair trade practices and dispute resolutions, and in the government’s procurement of goods and services. In addition, small businesses (including farms and tourism enterprises) will have to become more competitive to survive and mature in an open global economy. The growth of investment and incomes of small businesses is critical to increasing employment and reducing poverty in the Dominican Republic.

Protecting Dominican natural resources is critical to its future economic growth and political stability and the well-being of its population. Getting local government, private business, non-governmental organizations (NGOs), and community-based organizations involved in effective compliance with the existing environmental laws and regulations is essential to achieve this objective.

WHAT IS USAID DOING IN THIS AREA?

The overall objective is to assist the Dominican Government expand the economic opportunities of DR-CAFTA to the less advantaged through the effective and transparent implementation of DR-CAFTA, the growth of small businesses, and the protection of the country’s environment and natural resources. 

Effective DR-CAFTA Implementation:  Our trade capacity building (TCB) policy agenda is focused on activities to assist the country to take full advantage of the potential benefits of DR-CAFTA by expanding investment and export market opportunities and mitigating the impacts on those socio economic sectors that may be negatively affected (e.g., rice, milk) by free trade. USAID provides TCB technical assistance to facilitate trade (especially exports), increases private productive investment, and improves competitiveness (especially among medium, small and micro enterprises).

USAID also helps the Dominican Government to become eligible either for a MCA Compact or a Threshold Program. In particular, the Economic Growth Team focuses on helping the government improve on the weaknesses identified in the World Bank’s 2008 Doing Business Report for the DR; that is, to achieve greater efficiency in starting and closing businesses, contract enforcement, and effective dispute resolution, among others.

Increased Small Business Growth in an Environmentally Sustainable Manner:  USAID provides assistance to support the competitiveness and growth of small businesses, primarily in the rural sector, by identifying new market opportunities, providing training and technology transfers to help such businesses produce quality products and services, such as sustainable tourism/ecotourism services, and facilitating linkages to appropriate financial institutions, other input suppliers, and output markets.

Achieving greater competitiveness and working in clusters that have a competitive advantage in a global free-market economy are key factors for the survival and growth of small and medium enterprises in the Dominican Republic. Consequently, USAID’s goal is to support small and medium firms in key clusters, such as tourism, ecotourism, non-traditional agricultural exports, wood, and light manufactured products. In addition, USAID provides support to small private firms who are interested in investing in clean production techniques and programs that protect the environment, water resources and the country’s natural resource base. 

Environmental Policy:  USAID supports the Secretariat of the Environment and Natural Resources, municipalities, and local civil society groups to promote the protection of natural resources and biodiversity. USAID’s primary short-term goals in this area are to strengthen the country’s compliance with its existing environmental laws, Chapter 17 of DR-CAFTA, and Multilateral Agreements (MEAs) including CITES; to improve biological conservation through community-based micro-watershed management, sustainable tourism programs and environmental protection services; and to promote the sustainable management and conservation of critical protected areas. The long-term goal is to develop an effective decentralized system of community-based organizations to protect the country’s natural resources, biodiversity, and protected areas.

USAID assistance will focus on (1) Natural Resources Policy and Governance; (2) Sustainable Natural Resources Management and Production; and (3) Biodiversity Policy and Governance. These three elements complement one another to comply with the laws and regulations to protect the country’s natural resources and biodiversity, and are critical for the sustainable growth of the economy, particularly in tourism and agriculture.

WHAT DOES USAID EXPECT TO ACHIEVE?

Public institutions and private firms better prepared to meet the challenges of competing and growing in a more open and global market.

Increases in income and wealth for small and medium Dominican firms in the tourism and agribusiness sectors.

A functional environmental regulatory regime and local governments capable of ensuring compliance with the environmental requirements outlined in Chapter 17 of DR-CAFTA.