Senator Aubyn Hill — Jamaica’s minister of industry, investment and commerce — along with the support of JAMPRO, led another successful business delegation in April, this time to the Dominican Republic.
Minister Hill has been relentless in his drive to assist Jamaican companies to expand into new territories, particularly with our nearshore neighbors in the Caribbean, as have been evidenced by recent trade and investment trips to Guyana and Trinidad. Also of primordial importance has been attracting further investment to Jamaica and joint-venture opportunities.
A Successful Business Delegation
JAMPRO, in collaboration with other stakeholders, organized over 30 B2B meetings between Dominican and Jamaican companies to discuss supply chain integration, export opportunities and possible service contracts. The discussions and meetings provided a foundation for further potential deals and served as windows to better appreciate each country’s strengths and capabilities.
JAMPRO had the opportunity to meet with Dominican companies in the hotel, BPO, and logistics sectors in order to highlight Jamaica’s value proposition and synergies as a nearshore investment for Dominican companies seeking to expand.
Jamaica’s Private Sector Organisation of Jamaica (PSOJ) also signed a memorandum of understanding (MoU) with the Consejo Nacional de la Empresa Privada (Conep) — its counterpart in the Dominican Republic — to promote investment and commercial development.
About the Delegation
The Jamaican delegation was composed of a diverse group of companies such as Dairy Industries, City Fusion, Konnexx Services, Purple Team, Jamaica Broilers, Dolla Finance, Grace Kennedy, Executive Director of the Private Sector Association of Jamaica, Mrs. Imega Breeze-McNab and the President of the Private Sector Association of Jamaica, Mr. Metry Seaga, among others.
The range of Jamaican companies highlights the mutual interest that has been growing between Jamaica and the Dominican Republic in terms of trade and investment. Dominican companies have established significant operations in Jamaica in the past few years in a range of sectors, including auto dealerships (Magna Motors), Construction (CODELPA and Grupo Theresstra), heavy machinery (IMCA-Caterpillar), and agrochemicals (Fersan).
The Dominican Economy
The Dominican Republic, an upper middle-income country, has been the fastest growing economy in Latin America over the past 50 years, according to World Bank data.
The Export and Investment Center of the Dominican Republic (ProDominicana) reported that the country is positioned in 2022 for the second consecutive year with a historical record in exports, according to preliminary records of the General Directorate of Customs (DGA), with an amount of USD $12.3 billion, consistent with the estimates of the Central Bank.
During a meeting with the Jamaican delegation, Mrs. Bibiana Rivero, Executive Director of ProDominicana highlighted that raw gold continues to be positioned as the main exported product, representing 10.53% of the total, equivalent to USD $1.3 billion and cigars with 8.14% of the total value. Among the main products exported from the agricultural sector, the following stand out: Cocoa beans USD $211 million, bananas $USD 196 million, tobacco USD $141 million, among others.
Regarding major destinations, the United States remained their main export partner during 2022, accumulating a total of USD $6.24 billion, equivalent to 50.4% of the total and with a growth of 5% compared to the previous year. In terms of relevance, it is followed by the Haitian market with USD $1.04 billion and a share of 8.4%, then there is Switzerland, with export values of USD 1.03 billion and an 8.36% share.
Likewise, other destinations that show very significant percentage growth are South Korea, with a relative inter-annual variation of 771.8%, the United Arab Emirates 141% and Canada growing by 95%, among others.
Currently, there are 79 free zone parks in the country that house 734 companies that in turn generate a total of 183,335 jobs and represent an accumulated investment of US$5.13 billion. These areas concentrate 50% of activities such as: Tobacco and its derivatives, medical and pharmaceutical products, clothing and textiles, and services (BPO, call centers and back office services). The Free Zones account for 62.7% of total exports, and 80% of the companies operating in Free Zones are foreign-owned. For their part, exports under the local tax regime registered a growth of 2.7%, representing 34.5% of total Dominican exports.
The Dominican Republic has managed for more than a decade, a series of reforms to modernize the legal and economic framework with which companies operate in their country, as a strategy to encourage the flow of foreign capital in its territory and facilitate adaptation of its economy to the new international competitiveness schemes.
Foreign direct investment in the Dominican Republic totaled US$3.802 billion in 2022. This amount is an increase of 22.57% compared to 2021.
The inflow of foreign investment was driven mainly by investments in the tourism (US$759.2 million), energy (US$687.3 million), and commerce and industry (US$524.1 million) sectors.
The source countries also showcase the diversified nature of the investments.
- United States – $1.74 billion
- Mexico -$290 million
- Canada – $265 million
- Spain – $247 million
- Germany – $97 million
- Venezuela – $77 million
- Panama – $70 million
- UK – $57 million
- Italy – $37 million
- Colombia – $5.8 million
Investment Growth Requires Differentiation and Boots on the Ground
During my time as Manager of New Market Development at JAMPRO, it has become even more evident that — given the unprecedented number of investment promotion agencies now competing for the attention and business of a more cautious and discerning international investor audience — smart approaches to strategic differentiation, communication and “boots on the ground” engagement is becoming increasingly critical to engaging with international investors and reinforcing the message that Jamaica is one of the best nearshore investment destinations in the Latin American and Caribbean region.
The Dominican Republic and other key Latin American countries, represent expanded avenues for trade and inward investment to Jamaica and a roadmap to diversifying the footprint of foreign investors in the island. If a company is seeking a location with low barriers to entry and operational costs, combined with free trade agreements, political stability and a skilled workforce, Jamaica is always a top contender. Jamaica also promises tax incentives for logistics, hotel developments and business service firms.
During my visit to the Dominican Republic I asked several senior executives from Dominican companies with operations overseas (including Jamaica) what was the driving factor for their expansion abroad. Most mentioned realigning their footprint to protect against disruptions and finding new markets, while half said they wanted to capture value from regional and trade bloc agreements.
JAMPRO will continue to actively engage with international investors from key countries in order to spur sustainable long-term investment in our sectors of opportunity such as hotels, BPO, limestone mining, logistics and industrial park development (Special Economic Zones). The key to this success will be to continue to seek out and attract sector specific, catalytic investments which stimulate economic growth and provide jobs.