Enrique De Marchena Kaluche and Andrés Ceara Brugal from DMK Abogados paid a courtesy visit to the National Council of Export Free Zones of the Dominican Republic, at which time they exchanged views with Daniel Liranzo, Executive Director of the National Council of Free Zones, Silvia Cochón, Head of the Promotion Department and Yarisol López, Head of the Productive Chains Division, on the current status of the industry, its surprising resilience and recovery capacity in the face of the crisis generated by the spread of Covid-19, as well as The new administration’s plans for the elimination of excessive bureaucracy and the promotion of the country in the area of Free Zones, an effort in which DMK Lawyers committed to collaborating as it has done in the past.
Export Free Zones, a sector that has resisted and surpassed the COVID-19 PANDEMIC
As a consequence of the implications of the Covid-19 pandemic, the global value of exports has decreased by approximately 23% so far this year. Fortunately for the Dominican Republic, the export free zone sector has been resilient, allowing national exports to have only been reduced at a rate of 12%, that is, practically half of the impact suffered by world exports.
Free zones generate more than 171,863 jobs in the country, it is, together with the tourism sector, one of the sectors with the greatest impact on the growth of the Dominican Republic’s economy, producing free zones close to US$6,000 million in exports to more than 130 countries.
Jobs in the Free Zones sector have been reactivated by more than 85% from February to October 2020. By August, around 137,870 jobs had already been recovered. In fact, in some sub-sectors, such as Medical Devices and Cigars, companies have been forced to hire more employees than they had before the start of the pandemic to respond to the growing demand for products.
Another great news is that, despite the current economic situation, a considerable number of free zone companies have expanded their operations in the country, through the acquisition or lease of new industrial buildings, in the same way, we can confirm that there are also new industrial parks under construction.
The challenges facing the Free Trade Zone sector
The biggest challenge currently facing the Free Zones sector is to satisfy the demand for skilled labor presented by companies that manufacture medical devices and other technological branches, for this purpose the National Council of Free Zones, some companies, and other government institutions Like INFOTEP, they have undertaken a joint effort with high study houses to train, prepare and bring to the market young professionals with the necessary aptitudes and abilities to satisfy the highest requirements.
The new government and the new management of the National Council of Free Zones have established as a goal, a comprehensive program to improve the infrastructure of the quality of our products, promote the controls and quality management established by the International Organization for Standardization ( ISO), for which they are still evaluating action plans that will define how the public sector will facilitate obtaining the aforementioned certifications.
Apart from those that have already been mentioned, the National Council of Export Free Zones faces the challenge of establishing a program to link-local chains to the export sector, for which it has been proposed to promote clusters and associations by specific branches with the objective promoting positive externalities, as well as fostering a favorable environment for supply chains and logistics.
Andrés Ceara Brugal, Junior Partner-DMK Abogados
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