Dominican economy fueled by returning professionals

While much of his time is spent developing and executing strategies to find new sources to fuel the Dominican economy, Eddy Martinez Manzueta’s long-term goal is to increase imports…of lost talent.
Dominican Secretary of State Martinez Manzueta, one of President Leonel Fernandez’ main strategists in the global commerce world, believes the key to competitiveness lies in wooing back the hundreds of thousands of skilled Dominican immigrants who flocked north and east, mainly to the United States and Spain, during the economic crisis of 2003.

A meltdown in the Dominican banking system, brought on by what many have catalogued as “irresponsible” public spending by the administration of former President Haplite Mejia, saw the unemployment rate spike from 13 percent to 19 percent in less than three months in 2003. As a result, a wave of migration of highly skilled and well-trained professionals, mainly to New York City, Boston and Madrid, ensued. Martinez Manzueta, whose position on the presidential economic team is executive director of the Dominican Republic’s Center for Exports and Investment, is part of the group that is repairing that situation.

“The economic crisis was a wake-up call for this entire country,” he said, “and as we have strengthened the economy, we have also found that we need to look for ways to end our Diaspora and for ways to bring back the Dominican talent that left.” Bringing this talent home, Martinez believes, is the key to sustaining the economic comeback the Dominican Republic is enjoying.

“For a time now, Dominican talent has been subsidizing the economy in the United States. There are a great number of Dominican professionals abroad who we know can be a catalyst for growth here. In short, our goal is to create a vibrant economic environment to create jobs that will help us import an export that should have never left in the first place,” Martinez further explained.

Since taking over the government in 2004, President Fernandez has emphasized trade and commerce as the vehicles for recovery. Global competitiveness is not a new term in Dominican policy, however. During his first term as President, between 1996 and 2000, Fernandez had already established trade policies and, with the help of the Congressional Hispanic Caucus in the United States, aggressively sought inclusion into the Free Trade Agreement of the Americas and the Central American Free Trade Agreement, today known as DR-CAFTA.

A now-defunct constitutional amendment kept Fernandez from re-election in 2000 and while some of his policies were continued by Mejia, the fact remains that the banking crisis, “set us back at least 10 years,” according to Rafael Camilo, the Dominican government’s superintendent of banks.

Upon his return to power in 2004, Fernandez tapped Martinez and his economic team to pursue help from international agencies to aid the Dominican Republic’s climb out of the economic hole. A stand-by agreement was reached with the Inter-American Development Bank (IADB) and the International Monetary Fund (IMF) to stabilize the economy and a new, aggressive banking law was enacted to help ensure the elimination of rogue banks and that the remaining banks would not be a hindrance to the country’s credit rating.

“In mid-2003 I think we all knew we had touched bottom,” Martinez explained. “It was a wake-up call for all sectors that even crossed party lines. We had to start again from scratch and focus on a long-term strategy for recovery. Once the banking system stabilized, we moved forward with projects that would attract more investment and more access.”
Since stepping into his governmental role in mid-2004, Martinez has traveled the world, marketing Dominican economic reform with relative success. He has struck trade deals with Taiwan and has gained momentum in recent months to get DR-CAFTA enacted in the Dominican Republic, where congressional stagnation kept several key pieces of legislation, mainly infrastructure and tariff measures, on the desk until March 1, 2007, when it finally went into effect.

Also serving as president of the Santo Domingo Cyber Park, a $200 million project that houses hi-tech industries, Martinez has been able to position the Dominican Republic as a regional leader in technology and biotech, including the groundbreaking of the NAP (Network Access Point) of the Caribbean, an access point that will be operated by Terremark, a Miami-based IT infrastructure company. When completed, NAP will become the nerve center of Internet communications between North and South American and the Caribbean.

Further fueling the growth has been the fact that regional competition has also turned to the Dominican favor. Puerto Rico, a U.S. possession just east of the Dominican Republic, is going through a recession and companies, mainly in the manufacturing sector, are taking advantage of tax incentive phase-outs there to set up shop in the Dominican Republic, where labor costs are controlled.

All the factors combined, including investment ventures with Canadian, German and Spanish capital, allowed the Dominican Republic’s economy to grow at a 9.3 percent clip in 2005. Preliminary numbers tallied by the Inter-American Development Bank estimated growth for 2006 at 11.3 percent.

“We will continue to press with our trade policies because the numbers prove that they are working,” Martinez concluded. “I think President Fernandez is adamant that we continue to pursue this holistic approach. While we continue to get the message out that we’re ready for business, there are other strategies at work to strengthen infrastructure, focus logistics and provide the legal framework that gives the Dominican government the institutional capacity for sustainable growth.”

By all accounts, Martinez’ claims of growth and stability have been proven. The World Economic Forum’s annual competitiveness ratings showed the Dominican Republic with the biggest rise in the rankings for Latin America and the fifth best overall improvement in the world.

For Martinez, it will all be worth it when Dominicans who left begin coming back, proud of coming home.