Capitalizing on natural resources and a primordial geographical location, the island nation considers a multitude of possibilities to export exports and encourage foreign investments.
A cultural affinity with the United States and a tropical climate all year round have made the Dominican Republic an attractive destination for tourists in the North. But the number of visitors tends to descend and the new tax on versions in the law “Big and Beautiful Bill” by President Donald Trump highlighted the need for the island nation to accelerate its long march diversifying the economy.
“The Dominican economy has diversified since the fall of the dictatorship of Trujillo” in 1961, underlines Franklin Vásquez, economist and CEO of Cyfras Consisers. “We have promoted and favored financial capital, then we went to the promotion of tourism, then free trade zones, then we opened the economy to neoliberalism in the early 1990s. Then we supported the agricultural sector.”
Currently, the emphasis is placed on the services and the creation of a logistics center, capitalizing on the proximity of the Republic with the interest of the United States and China to include it in the Belt and Road initiative.
Foreign investors can take advantage of the free trade zones, of which the Dominican Republic has 92, housing 850 companies. Logistics companies, which represented 3.14% of GDP in 2023, are treated in the same way, in terms of taxes, as those who have settled in free trade areas. According to a recent report by the Ministry of Industry, Trade and Small Businesses (MICM), the logistics GDP tranche could increase to 3.78% over the next decade. Five logistics centers and 33 companies combine more than $ 2 billion in income per year, or 1.58% of GDP of $ 126.2 billion in the country.
“With adequate policies, we must increase the complexity of our export basket.”
Juan Ariel Jiménez NúñezFormer Minister of Economy
Eduardo Sanz Lovatón, Director General of Customs, sees the Dominican Republic becoming the most important Logistics Center in the Caribbean. In addition to its geographical position, Sanz stresses that 20% of the country’s $ 4.5 billion in the country’s foreign investment in 2024 were channeled in manufacturing. Companies, including manufacturers of Hanes and Timberland clothing, aerospace companies such as Eaton Corporation, and IT companies such as Rockwell Automation have established installations on the island.
The challenges for companies that envisage relocation include scaling to predict the fast -growing Asian market; Education needs, especially for engineers; And occupancy rates in the country’s sophisticated commercial parks, which take place from 99% to 100%. But with the age of a 28 -year -old median worker, former Minister of Economy Juan Ariel Jiménez Núñez also sees a path to reindustrialisation. This workforce is “ready to learn, willing to speak English,” he said. “I think we should try industrial goods: more medical devices and electrical components.”
This could help to take up the challenge posed by the Trump payment payments tax, which could cost the Dominican Republic more than $ 234 million a year, according to the Center for Global Development. Tourism represents 8.3% of GDP with added value; With funding, this increases to almost 30%.
“With adequate policies, we must increase the complexity of our export basket,” says former Minister of Industry and Trade José Del Castillo Saviñón. “We should have more tourism for sure, but we have to have better tourism. We should do health tourism and retirement tourism. It is not only diversified by tourism, but also the diversification of the tourism industry itself. ”
The Republic already has a tourist diversification policy in place, which should have added nearly 104,000 tourists from South America this year. The tourist visits of Argentina have doubled since the signing of an open sky agreement in December 2024 which increased direct flights and included international promotion by the government. This helped to compensate for 88,000 tourist arrivals from North America in the first quarter of 2025, which the Ministry of Tourism explains as due to seasonal factors, especially the year of jump and the first celebrations of Holy Week.
The increase in the country’s presence in the processing of commercial services (BPO), which currently reports $ 250 million per year, according to Statistica, is another option. At least 14 BPO start-ups are currently operating in and around the capital of Santo Domingo, employing 36,000 workers in the call center. A report by the Central Banco of the República Dominicana calculates that the industry has increased by 12% per year in the past five years.
Dr’s Geographical advantages
Another characteristic that the Republic could exploit is its northern port, Manzanillo, which is two days by boat from the east coast of the United States. At present, the country mainly uses its southern ports, including Haina and Santo Domingo. While the country continues to develop a cruise port in Arroyo Barril in the East, the north coast remains underused.
Jiménez thinks that the Dominican Republic could also be the main supplier of agricultural and industrial goods in the Caribbean Islands. Further on, it pleads for increased integration with the United States and perhaps Europe, but not Latin America, since the United States offers clearer competitive advantages.
Another option is the diversification of energy: in particular nuclear energy.
In June, Gaddis Corporán Segura, vice-minister of nuclear energy, revealed that a nuclear law project was ready to be presented in the Chamber of Deputies. If the Republic becomes nuclear, it would be the first Caribbean island to do so. Other short -term measures could include a Dosimetry calibration laboratory that could be used in the region. This would allow the Dominican Republic to calibrate the instruments used in industry, medicine and research.
The Latin and Caribbean Development Bank (CAF) has promised $ 2.5 billion in the region to help improve the ocean economy. The CAF objectives include the preservation of oceans, the encouragement of responsible tourism, the management of the coasts of the region, the conservation and the restoration of marine ecosystems, the development of clean technologies and renewable ocean energy, as well as decarbonizing ports and maritime transport. In June 2024, the Dominican Republic issued its first sovereign green obligation for $ 750 million through the Ministry of Finance.
But despite the “good relations” between the Dominican Republic and the multilaterals of the region, Jiménez notes that timing will be a major problem, because the discussion of these projects can take more time than many governments of the region. Consequently, the Dominican Republic had to rely more on the issue of sovereign bonds than on multilateral loans.
Mining has always been one of the largest export industries in the Republic. Last year, the sector contributed 43.3% of the country’s exports and 1.4% of GDP. China is a leading export market and experts think that, with gold – that Barrick Gold has managed to exploit – copper, zinc, bauxite, money and precious metal waste has significant growth opportunities. The southeast of the country, in particular, could benefit from new grants for the government’s exploration: including, says Vasquez, for oil.
However, the most important recent economic trend in the Republic may have been the rapid increase in women who join the workforce.
“I believe that women were the largest beneficiaries of the labor market and economic dynamics,” explains Vásquez. “Before, you could have had a labor market which was 20% to 30% of women; Now we see that 50% of the labor market is women. If you look at the financial system, the majority of bank employees and financial institutions are women. Dominican women have been independent and formed. They wanted to go ahead. ”
The biggest problem, however, is that the types of work ensure women. The assistance of a World Bank program aims to repair an imbalance that sees only 18% of students choose information and communication technologies and women represent only 5% of STEM graduates.
Nevertheless, greater economic participation by women has contributed to an improvement in social stability in a country which already has economic and political solidity, according to Vásquez. A plethora of laws and policies aim to limit public spending and increase access to financial services, potentially expand the tax base.
Given these attributes, “the Dominican Republic is the diamond in Latin America,” says Jiménez. “With adequate policies, especially with a better education system, we can very much shine this diamond.”