Dominican Republic leads CELAC to promote regional economic integration

PUBLISHED TO MARK THE DOMINICAN REPUBLIC’S PRESIDENCY OF
THE COMMUNITY OF LATIN AMERICAN AND CARIBBEAN STATES
CELAC: Promoting economic integration
in Latin America and the Caribbean
DOMINICAN
REPUBLICAGRICULTURE • TOURISM • INFRASTRUCTURE • FINANCE
O F F I C I A L R E P O R T

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DOMINICAN
O F F I C I A L R E P O R T

DOMINICAN
O F F I C I A L R E P O RT
C1 OFC Dominican Republic 2016.indd 1 22/03/2016 11:25
H.E. DANILO MEDINA SÁNCHEZ
President of the Dominican Republic
Towards a more integrated region 4
ANDRÉS NAVARRO GARCÍA
Minister of External Relations, Dominican Republic
A new ‘architecture of diplomacy’ 6
HÉCTOR VALDEZ ALBIZU
Governor, Central Bank of the Dominican Republic
Steady as she goes 8
JOSÉ DEL CASTILLO SAVIÑÓN
Minister of Industry and Commerce, Dominican Republic
The power of regional trade 10
FRANCISCO JAVIER GARCÍA
Minister of Tourism, Dominican Republic
Growth through diversification 12
ANGEL ESTÉVEZ BOURDIERD
Minister of Agriculture, Dominican Republic
Raising the bar in agriculture 16
OSMAR BENÍTEZ
President, Junta Agroempresarial Dominicana (JAD)
Growing for gold 18
DR JEAN-MARC ANGA and DR JOSÉ ANTONIO MARTÍNEZ ROJAS
Executive Director, International Cocoa Organisation (ICCO),
and National Coordinator, 3rd World Cocoa Conference (3WCC)
A model for the future of cocoa 21
HÉCTOR RIZEK and MASSIMILIANO WAX
CEO and Vice-President, Strategy and Business Development, Rizek Cacao S.A.S.
Moving up the value chain 26
DR ANTONIO ISA CONDE
Minister of Energy and Mines, Dominican Republic
Developing new resources 29
KEITH DUNCAN and GUILLERMO ARANCIBIA
Group CEO and Country Head, Dominican Republic, JMMB Group
The regional player making waves 30
ENRIQUE RAMÍREZ PANIAGUA
Administrator General, BanReservas
Promoting financial inclusion 32
DR JEAN ALAIN RODRÍGUEZ
Executive Director, Centre for Export and Investment
of the Dominican Republic (CEI-RD)
Onward and upward 34
H.E. DR FEDERICO CUELLO CAMILO
Ambassador of the Dominican Republic to the United Kingdom
New diplomacy in action 36
Contents
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By H.E. DANILO MEDINA SÁNCHEZ
President of the Dominican Republic
Towards a more integrated region
4
T
he Dominican Republic takes the helm
of the Pro-Tempore Presidency of
the Economic Community for Latin
America and the Caribbean (CELAC)
in a year in which the world in general – and our
region in particular – are facing immense challenges,
in a complex web of interlinked problems that can
only be addressed and resolved politically. Through
CELAC we should speak with one voice, conveying
the consensus political solutions required.
After Asia, the Latin American and Caribbean
(LAC) region will see the largest share of its population
moving up to the middle class – 130 million according
to the OECD. However, together with Sub-Saharan
Africa, the LAC region is the most unequal in the
world. Ten per cent of the population earns 32 per
cent of regional income, while the poorest 40 per cent
retains just 15 per cent. Inequality is the enemy we have
to beat together.
Addressing inequality through regional integration
Inequality, as measured by the GINI coefficient, has
decreased 5 per cent. But with growth slowing down
to barely 0.2 per cent for the region as a whole, clearly
a collective response is needed so that we can rely more
on the growth potential of our own regional market,
rather than suffering disproportionately the effects of
extra-regional developments.
In this regard, regional integration, promoted
through CELAC, has to be an important element
in the battle against inequality. Our integration
mechanisms, however, are advancing at different paces.
MERCOSUR, SICA, CARICOM, the Pacific Alliance,
the Andean Community, UNASUR, and ALBA, among
others, have not been able to bring us together around
the same table to address our common challenges.
In seeking to deepen LAC’s regional integration, the
needs of three types of actors have to be considered:
First, 67 per cent of our regional output is produced
by fully globalised firms that generate just 20 per cent
of our jobs. Then, SMEs provide 23 per cent of the
region’s GDP and 30 per cent of our jobs. And last,
microenterprises and the informal economy generate
the remaining 10 per cent of the regional output while
proving jobs for about half of our citizens.
Therein lies the challenge of overcoming inequality
in the LAC region: to develop stronger links in our
value chains, between our globalised firms, our SMEs
and our informal sectors, so that they can increase their
productivity and generate much more than the barely
10 per cent of GDP our SMEs and informal sectors are
providing presently.
This, in the context of a renewed commitment to
deepening our regional integration, should provide
us with the internal dynamics our growth trajectories
currently lack, thus making us less vulnerable to
changes in our main export markets.
The urban-rural nexus in sustainable development
With the renewed focus on sustainable development
provided by Agenda 2030, standards of living in rural
areas have to increase so that our cities can themselves
become more sustainable, thus helping us master the
urbanisation process and slowing down its pace.
Our most prosperous rural areas are filled with
agricultural cooperatives of smallholder farmers,
which have decreased rural-urban migration. This is
one of the many reasons why the Dominican Republic
has increased funding for agriculture, providing
land titles to our farmers and ensuring their access
to seeds, technology and irrigation infrastructure.
Through a policy of surprise visits, I supervise this
process personally, achieving sustained rates of growth
in a sector that has been left behind from our policy
priorities for much too long.
DOMINICAN REPUBLIC
FIRST
DANILO MEDINA
was elected President of
the Dominican Republic
in May 2012, and took
office in August that
year. A graduate of the
Universidad Autónoma
de Santo Domingo
(UASD), he was elected
a Deputy in the National
Congress in 1987, and
rose to become President
of the Chamber of
Deputies in 1994. He
subsequently served
twice as Secretary of
State to the Presidency.

5
A collective
response is
needed so
that we can
rely more on
the growth
potential
of our own
regional
market, rather
than suffering
disproport-
ionately
the effects
of extra-
regional
developments
In the meantime, the Dominican Republic has
declared 2016 as the Year of Housing. Allied with
the private sector, we seek to build thousands of
new homes so that our peoples can live with dignity
in healthy communities, thus helping us overcome
health challenges, increase security and ensure peaceful
coexistence, while generating jobs and educating our
peoples. It is my hope that Habitat III, taking place in
Quito this year, will take us in the direction of making
housing a right for all of our peoples.
Drugs: time to explore new avenues
International drug trafficking is a social problem that
generates grave institutional and security challenges.
For many decades, the region has dedicated an
important share of its human and financial resources
to fight a problem that is far from diminishing in
importance. This in a region with urgent educational,
energy, health and urban security needs.
From South America to Mexico, through Central
America, the Dominican Republic and the rest of the
Caribbean, the transit of drugs through our territories
towardsthosecountrieswheretheyareconsumed–mostly
developed country markets – threatens the stability of our
democracies and the very lives of our citizens.
We cannot allow this issue to continue taking centre
stage at our encounters, year after year, while facing
the constant scepticism and frustration of our peoples
without exploring new avenues nor opening new
perspectives for our debates.
This year’s Summit of the General Assembly on
the world drug problem should propose policies and
measures on drugs that are centered on the human
being, taking into account the inalienable rights of all
peoples, that should result in the reduction not only
of the supply but most importantly the demand for
drugs. CELAC wants the problem to be addressed as
one requiring prevention, a public health approach and
of rehabilitation, introducing a systematic evaluation
process of its outcomes.
It is all our countries, the ones suffering the most
from this trade, who must make our voices heard.
Addressing youth unemployment
World Bank figures paint an appalling picture: one in
five young people in the LAC region between 15 and
24 years of age neither goes to school nor works. There
are millions of young men and women brimming with
energy, enthusiasm and ability, needing our message of
hope and our efforts to create opportunities for their
education and their honest work, which are the only
ways for us to prevent their criminalisation.
Let us always be mindful of our young people when
we envisage the future of CELAC. Our efforts should
be guided by their aspirations, hopes and needs.
Towards a more integrated, operational and
proactive CELAC
ThecommitmentoftheDominicanRepublictoCELAC
is real and immediate. It is in the faces of our people and it
is propelled by the urgency of their demands.
Our turn at the pro-tempore Presidency fills us
with joy and with pride. It renews our commitment
to the strengthening of our bonds with extra-regional
partners such as the European Union. It is the
occasion for us to demonstrate our political will to be
proactive in facing our challenges and advancing our
common interests.
In this fashion, we will do our best to hand over
the Presidency in 2017 after contributing to a more
integrated, more operational and even more recognised
common space on the global stage. F
FIRST
Opposite: President
Medina addresses the
IV Summit of CELAC
heads of state in Ecuador
Left: President Medina
makes a surprise
visit to a deprived
neighbourhood in
Los Guarícanos

Interview with ANDRÉS NAVARRO GARCÍA
Minister of External Relations, Dominican Republic
A new ‘architecture of diplomacy’
6
It’s a little over a year since you took office as
Foreign Minister. What have been your main
priorities to date, and how successful have you
been in meeting them?
One of the main challenges this government has
taken on is that of strengthening the institutions of
the Dominican Republic, and in my case, that means
a complete overhaul of the foreign ministry and our
diplomatic corps.
Last year, 2015, we embarked upon a process of
institutional reform aimed at creating a new ‘architecture
of diplomacy’, and that has involved changing the whole
structure of the ministry. But this has only been the first
step, and the process of implementing a strategic plan
to coordinate the ministry’s activities will take five years.
This plan includes verification mechanisms to allow
us to evaluate the efficiency of the ministry’s different
activities. For example, we have created a prize for
diplomatic excellence and are now rewarding best
practices by our staff. We have also reformed the way
the ministry is financed. Just as importantly, we are in
the process of improving the training our diplomats
undergo. Among the things I most want to see is
Dominican diplomats accredited abroad taking a more
proactive role in disseminating information about the
country, especially the government’s human rights and
social policies.
At the same time, the Export and Investment Centre
of the Domincan Republic (CEI-RD) is preparing a list
of exportable products so that diplomats can look for
opportunities in the countries where they are posted.
Another key task is to look after the interests of
Dominicans living abroad, who number some two
million, or 20 per cent of the population. With this
in mind, we have launched the Dominicans Abroad
Institute (INDEX), an academic, arts and research
institution. This initiative is aimed at averting
the Dominican diaspora’s disconnect with the
Dominican Republic and to assist the large Dominican
communities living in cities like New York, Madrid,
and Barcelona. These communities can play a big role
in helping the towns and cities they come from back
home. For example, in Madrid, most of the Dominican
community comes from four or five towns in the same
region. We need to be establishing stronger ties
between them.
It’s time we let the world know that the Dominican
Republic is more than beach, bachata and baseball. In
short, we are creating a competitive institution able
to play an important role in regional affairs, and the
reforms I have outlined are part of a new vision of
diplomacy, one that is more inclusive, that involves
society as a whole: business, civic organisations,
NGOs. Our reinvigorated diplomacy should reflect the
interests of the nation, not the just the government.
This is a process that must involve the whole country.
How important is this year’s Presidency Pro
Tempore (PPT) of the Community of Latin
American and Caribbean States (CELAC) for the
Dominican Republic, and what does it mean for
the image of the country abroad, both regionally
and globally?
It is true that traditionally we have not played a very big
role in CELAC – or for that matter, the Organisation
of American States (OAS). For us, CELAC is important
because it is a space for political dialogue: it is different
to the OAS because its agenda is more focused on our
region. As I’m sure you know, over the last year there
has been a concerted international campaign against
our immigration policies toward Haiti and Haitians
living in the Dominican Republic. Our aim now is for
CELAC, and the OAS, to get to know the DR better
and to understand why we have taken certain decisions.
Under the leadership of President Danilo Medina,
the Government of the Dominican Republic’s
DOMINICAN REPUBLIC
FIRST
ANDRÉS NAVARRO
attended the Universidad
Autónoma de Santo
Domingo (UASD) and
Universidad Nacional
Autónoma de México
(UNAM), before
embarking upon a
diverse career as an
architect, writer,
professor and politician.
Between 1998 and
2014 he held a number
of senior posts in the
municipality of the
National District (Santo
Domingo), becoming
Secretary General in
2012. He served as
Cabinet Director to the
Minister of Public Works
from April to September
2014, when he was
appointed Minister of
External Relations by
President Danilo Medina.
Everybody needs
good neighbours: the
Dominican Republic’s
Foreign Minister, Andrés
Navarro with Former
President of Haiti,
Michel Joseph Martelly

7
Diplomacy
is about
more than
just foreign
affairs:
business
relationships
are often more
sustainable
than their
political
counterparts
overriding priority is to reduce poverty and inequality
among CELAC’s 33 members. This theme tops the
five pillars of the “Agenda 2020”, tabled by Costa Rica
and Ecuador, which held the presidency in 2014 and
2015 respectively. The other pillars are education,
technology and innovation; the environment and
climate change; infrastructure and connectivity, and
financing for development.
During our presidency of CELAC, the DR will
also be pushing the United Nations 2030 Sustainable
Development Agenda, which we believe should be the
cornerstone of OAS policies. The problem our region
faces is that it has become too isolated, and that is
something we want to address during our presidency.
In the case of the OAS, we want to see reform: the
organisation needs to be stronger, it needs renewing,
and it needs to be more cohesive. Overall, the
main challenge we need to tackle is how to promote
better dialogue among the members of both
organisations, and in particular over human rights,
democracy, and security.
I would also like to mention CARICOM, which
has been particularly critical of the DR over our
immigration problems with Haiti. The DR needs time
to establish a relationship with CARICOM if we are to
address the concerns of Haiti.
You have dedicated a lot of your time in office to
resolving the difficult bilateral relations with the
DR’s closest neighbour. What outcomes do you feel
you have achieved?
Haiti is our neighbour on the island of Hispaniola
(originally known as Quisqueya to the native Taíno
indians), and as such it is one of our most important
relationships. But the situation there has been very
unstable for many years, and has been made more
difficult since the earthquake of 2010. Quite simply, the
situation is still not stable enough to establish an agenda
yet. We will have to wait until the country is able to hold
its general elections, and then make a decision based on
what happens afterwards. All of this has made it difficult
to establish long-term relations and to map out policies
for the future. Everything we did last year was necessary
to help establish this relationship. As soon as a new
government is installed we will continue talking.
The government and business leaders of the
Dominican Republic will continue to work with our
Haitian counterparts to overcome stumbling blocks,
and we have already outlined areas for cooperation.
These include improving trade and normalising
freight transport between the two countries. We have
both given our support of the Quisqueya Binational
Economic Council (CEBQ) initiative, which gives a
key role to the private sectors of our two countries.
At the same time, our respective foreign ministries are
in constant contact to coordinate the repatriation of
undocumented people.
The two countries’ private sectors appear to have
closer relations than their governments, as the
CEBQ initiative shows. What can government learn
from the approach and experience of the private
sector in this regard?
We return to the idea that diplomacy is about more than
just foreign affairs: business relationships are often more
sustainable than their political counterparts, which is
how the CEBQ will help promote human development
in our border regions with Haiti. Improving relations
with Haiti is not just about political dialogue, there is a
whole range of other organisations and sectors involved
in the process: sport, culture, business, education, and so
on. As with the European Union, which doesn’t function
simply at the political level, neither can our diplomatic
relations with our neighbours. We need to take a more
inclusive, participative approach to diplomacy, and that
means involving civil society and business.
At home, the foreign ministry’s team is working
closely with the leadership of the National Business
Council (CONEP) to outline a strategy to boost
exports and promote trade and investment in the
Dominican Republic.
Our aim is to forge a partnership to collaborate
and develop various topics of common interest with
the private sector as part of an ongoing process of
trade liberalisation, creating jobs and spurring the
growth of exports in the process. The government is
committed to bolstering ties with the export sector,
which, as I say, can play a leading role in the efforts
of our ambassadors abroad. Ours is a broad vision that
will connect the foreign ministry with business, in
the knowledge that this strategic alliance can lead to
economic development. F
FIRST
Dominican Foreign
Minister Andrés Navarro in
conversation with Alastair
Harris, Editor of FIRST

Interview with HÉCTOR VALDEZ ALBIZU
Governor, Central Bank of the Dominican Republic
HÉCTOR VALDEZ
ALBIZU
is the Dean of Central
Bank Governors of the
Americas. During his
18-year tenure (1994-
2000 and 2004-present)
of continued
macroeconomic stability,
the Dominican Republic
registered the highest
average rate of growth
in the Americas, more
than tripling the size
of per capita GDP. He
is a graduate of the
Universidad Autónoma
de Santo Domingo
(UASD), the Institute of
Social Studies of Chile’s
Universidad Católica and
the IMF’s Institute of
Advanced Studies.
Steady as she goes
8
A
t a time when Latin American and
Caribbean economies are struggling to
adjust to the downturn in China and the
continued impact of the financial crisis in
the EU and the United States, in contrast, the mood
in the Dominican Republic is one of quiet confidence
in the future.
“The governor of the Central Bank of Mexico
recently told me that we’re laughing while our
neighbours are crying,” says Central Bank governor
Héctor Valdez Albizu, adding: “The big risk to the
region comes from the fall in commodities prices:
Latin America now faces the conditions that will
reduce growth.”
Mr Valdez Albizu has worked at the Central Bank
for most of his career, rising through the ranks after
he joined in 1970 to become governor in 1994, a post
he has occupied continuously since then, aside from
a four-year break between 2000 and 2004. A veteran
political insider, he is one of the main architects of
the Dominican Republic’s economic reforms of the
last two decades, and offers unique insight into his
country’s success story and what sets it apart from its
regional neighbours.
“Generally speaking, there are two kinds of economy
in Latin America and the Caribbean: those focused on
exporting raw materials and commodities, and those
like ours, which while small, are open, flexible, and
diversified,” he explains.
After growing by an average of 4.3 per cent between
2004 and 2011, the economies of Latin America
managed just 2.6 per cent in 2015. “Brazil has had to
raise interest rates sharply to contain inflation and is
unlikely to beat its 2013 growth of 2.3 per cent. Mexico,
although less commodity-driven than South America,
is unlikely to do much better. The data suggests that
Chile is growing at its slowest rate for four years. Even
Peru, along with Panama, the region’s star economy of
the past decade, is feeling the pinch,” says Mr Valdez.
“Last year, Brazil went into recession, while we
enjoyed 7 per cent growth; the previous year was 7.3
per cent. The growth in our economy has not been
affected by the financial crisis in the US or China’s
slowdown,” he continues, noting that in 2015, tourism,
the economy’s biggest sector, brought in US$6.5
billion in foreign earnings, while remittances from
Dominicans working abroad amounted to US$4.5
billion. In total, the Dominican Republic’s foreign
exchange earnings from tourism, remittances, foreign
investment, and exports of goods and services for last
year exceeded US$23 billion, or 35 per cent of the total
GDP, says Mr Valdez. The country’s economy is worth
around US$61 billion. Inflation remains at 2.3 per cent,
below the 4 per cent target set by the government.
Mr Valdez says neither is he overly concerned about
fall-out from the situation in Venezuela, even though
its heavily oil-dependent economy has been sent into
a tailspin by the collapse of crude prices, starving the
country of cash to pay for domestic energy subsidies
and imported goods. With little foreign currency
reserves left, the economy is contracting, inflation has
soared and the government has resorted to rationing
food and other consumer staples.
Under former President the late Hugo Chávez,
Venezuela launched the so-called Petrocaribe accord
in 2005, seeking to become a low-cost energy provider
and win political favour among small island economies
heavily reliant on oil imports. Since then, it has
drastically cut back that policy.
“Fortunately, the Dominican Republic has a more
diverse source of oil imports and will not be hit as hard
by the loss of cheap Venezuelan oil,” says Mr Valdez.
Furthermore, he says, much of the capital flight from
Venezuela has landed in the DR’s tourism sector.
Looking to the longer term, Governor Valdez
believes a solution will be found to the current political
stalemate in Venezuela.
Learning the lessons of history
The Dominican Republic learned the lessons of
overdependence on commodities during the military
rule of the early 1960s. When it emerged from civil
war in 1965, successive governments introduced
legislation to create an industrial base and to diversify
the economy.
By the mid-1990s, having laid the foundations for
a reasonably diversified economic base, successive
governments began setting up special economic zones
that provided the ideal conditions for capital investment
by allowing companies within them to effectively
operate outside the regular domestic economy.
What the DR also did was embrace globalisation.
While many other countries have also done the same
since, the Dominican Republic’s experience has
DOMINICAN REPUBLIC
FIRST

9
Whilst its
regional
neighbours
are buffeted
by the
chill winds
of global
commodity
markets, the
Dominican
Republic
continues to
chart its own
very different
course
permeated more deeply, says Mr Valdez.
By the first years of the new millennium, the
Dominican economy was stronger than it had ever
been: it had enjoyed the fastest economic growth in
Latin America since the 1970s, averaging 3.2 per cent
annually until 2003. But that year it embarked on the
ill-advised bailout of Banco Intercontinental (known
as BanInter), the country’s second-largest private bank,
sparking a crisis that doubled government debt and
destroyed the value of the currency.
“A drastic overhaul was needed to restore
macroeconomic stability and confidence in the
financial sector, as well as to tame spiralling interest
and inflation rates,” explains Mr Valdez.
In the years that followed, a series of hard-hitting
financial reforms and the close coordination between
monetary and fiscal policies ushered in a new period
of economic growth and a revitalisation in all sectors.
Since then, the country has continued to attract
FDI, which has increased by 245.5 per cent over the
last decade. “The main factors that have influenced this
increase are the country’s macroeconomic stability, low
inflation and relative stability of the exchange rate and
a healthy financial, liquid, solvent and well capitalised
system,” says Mr Valdez.
“Creating the conditions investors need is not
rocket science,” he notes, highlighting the impact of
continued legislation to improve the business climate,
such as an FDI Act that provides the same facilities
and guarantees to foreign investors as Dominicans,
based on clear rules and regulations, with incentives
for investors in different sectors.
“Diversification has contributed to the increase in
investment flows,” says Mr Valdez. “In 2000, four
sectors: electricity, telecommunications, trade, and
tourism, accounted for 82 per cent of FDI. Today,
the spectrum of sectors has expanded to include real
estate, construction, and finance. We’re confident
that we can now attract greater investment to develop
mining and agriculture.”
“In addition, ours is a country characterised by long-
standing democracy that has provided political and
social stability,” he adds.
The country also benefits from its location along
Caribbean and Central American shipping routes,
while it is just three hours flying time from the eastern
seaboard of the US. The country has first-world
transport infrastructure, with eight international
airports and a world-class telecommunications system.
Over the last four years, the DR has also pursued a
policy of greater regional integration.
The country’s participation in major trade
agreements like DR-CAFTA, CARICOM, the
Economic Partnership Agreement (EPA) with the
EU and others boosts its appeal as an investment
destination. In January, the Dominican Republic took
over the rotating presidency of the Community of
Latin American and Caribbean States (CELAC).
Banking sector reform
Since the crisis of 2003-2004, the financial sector has
undergone considerable development through the
implementation of robust policies that have addressed
fundamentalweaknessesandgreatlyimprovedperformance.
New regulations, such as additional capital
requirements, have been implemented, says Mr
Valdez. Enhanced transparency in the eyes of the
general public has been a key step, which has been
supported via independent regulatory institutions and
the introduction of relevant banking requirements,
he explains.
“The principles of the Basel Accords were also
adopted so as to enhance the standing of the Dominican
Republic’s financial sector within the international
system: market risk is now highly regulated by
ensuring equal treatment to all entities, regardless of
capital origin,” says Mr Valdez. The periodic review of
contingency plans is also employed in order to address
the shortage of funds of financial intermediaries.
Measures such as publishing of monthly and annual
financial statements, as well as detailed information on
the loan portfolios of various financial intermediaries,
have improved transparency in the sector and
contributed to its health: “We have moved to a model of
risk-based supervision, based on high levels of liquidity
and solvency, as well as greater international openness.”
Elections unlikely to affect growth or investment
Mr Valdez is confident that the presidential elections
in May, which current incumbent Danilo Medina
is expected to win, will have little impact on the
broader economy: “We project that this year, the
DR will continue its sound economic performance,
growing by its potential level of 5.5 per cent to 6
per cent, and that inflation will converge toward the
lower limit of the target range of 4 per cent to 1 per
cent at the end of the year, with a current account
deficit of around 2 per cent of GDP.” Mr Valdez says
macroeconomic performance will be driven by the
favourable international environment for the country,
characterised by improved terms of trade (particularly
lower oil prices and higher gold prices) and by the
recovery in the United States, the country’s main
trading partner.
“Continued high levels of exports from industrial free
zones, along with tourism, remittances, and foreign direct
investmentwillallcontinue.Additionally,weexpectprivate
sector loans will grow by around 10 per cent, similar to the
rate of expansion of nominal GDP, thus contributing to
maintaining the growth of private production.” F
FIRST

Interview with JOSÉ DEL CASTILLO SAVIÑÓN
Minister of Industry and Commerce, Dominican Republic
JOSÉ DEL CASTILLO
SAVIÑÓN
graduated in Law from
Pontificia Universidad
Católica Madre y
Maestra University,
from which he also
received a Master’s in
Economic Legislation
and Business Law. In
addition to his legal
advisory firm Gabinete
Economico S.A., which
provides legal advice
to private and public
enterprises in trade,
foreign investment,
government relations
and communications,
in 2011 Mr Del Castillo
was appointed Vice
Minister of Industry
and Commerce for Fuels
and Mining, before
assuming his current
role in the government
of President Danilo
Medina in August 2012.
The power of regional trade
10
More than 95 per cent of businesses in the
Dominican Republic are small and medium-sized
enterprises (SMEs), generating more than two
million jobs and accounting for 30 per cent of the
country’s GDP. What is the ministry doing to help
this vital sector?
Within days of taking office we set about implementing
measures to help micro and SMEs which, as you say, are
the backbone of the country’s industrial and commercial
sectors. One of the main problems micro and SMEs
face is barriers when trying to access credit, and for that
reason we are in the process of identifying potential new
financial resources for these enterprises. In this regard,
we have established a fund and created the Solidarity
Bank, which is helping to meet the needs of SMEs.
In October 2013, the government launched a one-
stop shop to facilitate the starting of new businesses
and formalising the existing ones, because we should
remember that more than 50 per cent of jobs are still
in the informal sector. Our goal is also to encourage
the formalisation of small, micro and medium-sized
businesses currently operating in the shadow economy.
Previously, it took up to a month to set up a company,
involving multiple money transfers, three forms, and
four visits to different offices. Now the process to set up
a company takes just seven working days, and requires
just one transfer to the Chamber of Commerce.
How are the various free trade agreements
(FTAs) signed with the US and EU, along with the
country’s Free Trade Zones (FTZs), impacting on
trade and investment?
The Dominican Republic has four FTAs in force. Most
of our trade is carried out through these agreements.
Exports to the US and the EU are at record highs.
Investment comes mostly from those same sources,
although Brazil, Mexico, Colombia and Venezuela are
growing fast in importance.
With Haiti, our second most important export
market at the moment, we hope to strengthen
our regional ties in the context of our Economic
Partnership Agreement (EPA) with the EU, which
includes a regional preference clause to that effect.
By virtue of this clause, what the DR gave the EU
will be extended to Haiti and vice-versa. However,
this requires Haiti to ratify the EPA, which has been
pending since 2009.
The new strategy for trade negotiations envisages
our developing closer ties with countries like Canada,
Colombia, Chile, Mexico and other regional trading
blocs. These are necessary requirements for us to
consolidate our potential to become the logistics hub
of the Americas.
The key policy of encouraging FDI through the
expansion of FTAs and the development of FTZs has
been a significant success. As a signatory to several
major international trade pacts, the Dominican
Republic has attracted the interest of larger markets
as a result of its productive capacity and its enviable
location between North and South America, en route
to the Panama Canal from Europe and other markets
around the world.
The FTAs give us duty-free access to the largest
consumer markets with greater purchasing power.
Furthermore, these facilities place us on equal terms
with Central American countries. Also, these treaties
provide us with an environment of greater legal
certainty, which is a further incentive for investment.
What’s more, these treaties can be beneficial in so
much as they oblige our manufacturers to compete
more effectively by offering products that meet
the standards demanded by these countries. In the
agricultural sector, for example, there is still a lot of
potential for us to reap the benefits of these treaties.
We are also trying to boost our mining exports, a
sector designated as strategic by the government. For
example, the implementation of the Pueblo Viejo gold
mining project will add more than US$2 billion to our
overall export figures in 2016, which represents a 20 per
cent increase in our exports. The government also aims
to provide continuity to the Export Processing Zone
(EPZ) scheme to further attract FDI into the Dominican
Republic, especially in the manufacturing sphere.
The Dominican Republic currently holds the
presidency of the Community of Latin American
and Caribbean States (CELAC), which puts
increasing regional trade as one of its primary
goals. Is the Dominican Republic making the most
of the potential to boost its exports to the region?
Obviously, our biggest export market is by far the
United States: nearly 60 per cent of our exports go
there. After that, it’s Haiti and the EU, the main
destinations for goods produced in the DR. In total,
DOMINICAN REPUBLIC
FIRST

11
The only way
to create a
stronger Haiti,
one that can
be a better
business
partner for all
the countries
in the region,
is to sit down
and talk
we are talking about exports worth US$9.6 billion
last year. Unfortunately, one of the main challenges
we face in increasing our share of trade with some of
our regional neighbours is the protectionist policies
they still pursue. This has to do with the scale of their
economies: they cannot compete with us on price,
so they protect their markets. They see us a power
in the region, the biggest economy in the Caribbean
region, for instance, and in many ways as a threat to
them. The other difficulty is lack of connectivity.
We do not have fast, efficient ways to get our goods
to these regional markets. Transport costs are high.
The Caribbean should be a natural market for us, but
it isn’t. We want to diversify our export markets, but
until these two issues are addressed, we’ll have to look
further afield. We are looking at Russia particularly, as
well as China and Asia, for luxury goods such as rum,
organic cocoa, and cigars: we control 40 per cent of the
world cigarette and cigar market. They are our second
biggest agroindustrial export.
What is being done to improve tax collection?
The informal economy is the key challenge here.
This is why part of the measures we’ve introduced are
fostering people working in the shadow economy to
formalise SMEs while making it simpler for them to
pay their taxes. What’s more, we have tax scales so that
smaller firms pay a lower rate of tax.
On the issue of unfair competitive advantages of
companies operating in FTZs, they are entitled to sell
part of their production to the domestic market, and
recently adopted legislation has approved a 2.5 per cent
tax on these companies’ activities in the local market
that effectively constitutes an income tax. Such a move
aims to eradicate potentially unfair competition. We
believe that the EPZ scheme should be continued,
because it currently generates 130,000 direct jobs and
over US$4 billion in exports.
The first meeting of the Quisqueya Binational
Economic Council (CEBQ) to facilitate the
development of the Haiti/DR border area, took place
in November, between leaders of the private sectors
of Haiti and the Dominican Republic. Given the
current uncertainty in Haiti, how confident are you
that this initiative can gain traction?
As you know, Haiti is in the midst of a major political
crisis and this has interrupted the talks. We understand
the difficulties they face, but our more immediate
priority is to deal with the Haitian ban on Dominican
imports. These sanctions could end up costing us
US$500 million in lost exports over the year. As part
of ongoing trade talks, our two governments agreed
to enhance commercial trade and normalise ground
transport of goods. Even though there have been
political problems between the Dominican Republic
and Haiti, trade between our two nations continues on
a daily basis, although much of it is smuggling. We
will be able, through this agreement on trade, to fight
against smuggling – the scourge that hinders economic
development in Haiti. Estimates suggest Haiti loses
more than US$300 million because of smuggling. The
only way to fix it and to help build a stronger Haiti,
one that can be a better business partner for all the
countries in the region, is to sit down and talk. The
private sectors in both countries have asked their
respective governments to work faster toward the
ratification of mechanisms for tariff harmonisation,
taking into account existing regional trade agreements.
In recent years the DR has begun developing closer
ties with China. How has the trade relationship
been affected by China’s economic slowdown?
China is not a key export market for us yet, in fact it’s
our competitor in terms of manufacturing. Recently,
we have been benefitting from increased labour costs
in China, particularly in textiles. China has been hit by
different factors that have pushed up its manufacturing
costs, which has allowed us to position ourselves better,
particularly in the FTZs, where we have created 46,000
jobs in recent years. So, the slowdown has not had a
negative effect, in fact, it has helped us. That said, over
the last few years, we have increased diplomatic and
trade relations with China, and we now have mutual
commercial representative offices here and there. At
the same time, we are organising official visits between
both countries to improve trade links. Trade relations
will increase as we move forward, and as I said, we
are focusing on increasing exports to China. There
are many opportunities for both countries to develop
commercial and industrial ties, particularly in the
mining and energy sectors.
Looking to the future, which sectors do you
expect to drive sustained economic growth in the
Dominican Republic?
We are looking at developing non-traditional areas,
and we will do this through the FTZs. As I just
mentioned, we want to increase our share of textiles
exports, and jewellery, medical instruments,
pharmaceuticals, electrical and electronic components,
are already at the top of our export list. Moreover,
we’re strengthening our presence in Europe through
organic products, particularly cocoa and banana, as
well as tropical fruits and vegetables. We also have
potential in heavy industry, as well as technology,
and we are talking to [Taiwanese electronics giant]
Foxconn about setting up an assembly plant. We also
need to set up clusters to link education, technology,
and manufacturing to foster innovation. F
FIRST

Interview with FRANCISCO JAVIER GARCÍA
Minister of Tourism, Dominican Republic
FRANCISCO JAVIER
GARCIA
graduated in Economics
from UASD and also
undertook postgraduate
studies in Law at
the University of the
Caribbean. He is a
member of the Partido de
la Liberación Dominicana
(PLD) and the principal
director of its election
campaigns, including
the current campaign
of President Danilo
Medina and those of
his predecessor, Leonel
Fernández. Mr Javier has
held a number of senior
roles in government
and public life, and was
Minister of Industry and
Commerce prior to his
appointment as Minister
of Tourism, by President
Fernández, in 2008.
Growth through diversification
12
What is your assessment of the current health of
the Dominican tourism sector, both in historical
terms and vis-à-vis your competitors in the region?
The Dominican Republic leads the Caribbean in
tourism growth. 2015 was our most impressive year
to date, with a record 5.6 million tourists, about 9 per
cent higher than 2014. Growth should continue during
2016, both in arrivals – due to additional tourism
avoiding crisis areas in the Mediterranean – and in
capacity, with more than 1500 rooms under contract,
in order to keep up with the present upward trends.
What is the current contribution of the industry to the
Dominican economy, both directly and indirectly?
Last year tourism generated US$6.2 billion and over
250,000 direct and indirect jobs. For a country with
the ninth largest economy in Latin America – and the
largest in the Caribbean and Central America – these
are not insignificant numbers. We are talking about
a sector that represents 10 per cent of Dominican
GDP and generates about the same share of direct and
indirect jobs.
Tourism also makes the Dominican Republic more
resilient to international shocks. In 2008, the last crisis
year for the world economy, tourism managed to grow
3 per cent. Since then, growth rates have picked up
and new investments continue to arrive, allowing us to
cater to different market segments.
You have overseen one of the most important
periods of growth in the DR’s tourism sector
since taking office in 2008, and have said that
the country’s future prosperity depends on the
further development of the sector’s potential. Is
the country’s mainstay – the all-inclusive sun and
beach model – sustainable, in your view? What
is your strategy for diversifying the Dominican
tourism offering and moving it further up the
value chain?
Diversification for us means moving up-market. There
are more villas for sale and for rent than ever before,
surrounded by award-winning golf courses. Growth in
this segment continues unabated.
New luxury hotels in all areas of the Dominican
Republic have opened up. Some belong to the most
prestigious networks, such as Relais Chateaux,
the Leading Hotels of the World and the Small
Leading Hotels of the World. In all cases, the natural
environment is as superb as in the all-inclusive hotels
– this is the Dominican Republic after all – but the
quality of service and the sophistication of the facilities
have reached new heights.
All niches are being targeted: golf travel, eco-
tourism, MICE (meetings, incentives, conferences
and exhibitions) adventure travel and business-leisure
spaces – but we are working to define, support, grow
and sustain these categories and initiatives.
Punta Cana continues to receive about 66 per cent of
our visitors. While all-inclusive hotels – in Punta Cana
and the rest of the country – will continue to be a staple
of Dominican tourism, new types of travelers, whether
interestedinournaturalparksorourheritage,inadventure
or in luxury, have plenty of lodging options available.
The Dominican Republic has an ‘embarrassment
of riches’ in niche sub-sectors such as wildlife and
eco-tourism, yet is only just beginning to market
itself as such. What is your view of the potential
of this area, and what is the ministry, and the
private sector, doing to capitalise on it?
The potential offerings for eco-minded travelers
are rich and plentiful. We are proceeding cautiously
and with great care to structure eco-tourism in a way
that minimises the impact on our ecosystems, while
sustaining the surrounding communities. In order
to become successful in these sectors, we must be
able to preserve them not only for the enjoyment of
DOMINICAN REPUBLIC
FIRST
The historic Fortaleza
San Felipe in Puerto
Plata: the region was
at the forefront of
the DR’s early tourism
development and is now
experiencing a revival in
visitor interest

13
Last year
tourism
generated
US$6.2 billion
and over
250,000
direct and
indirect
jobs in the
Dominican
Republic
future generations, but with the utmost respect for our
indigenous flora and fauna.
Our protected national parks represent about two-
fifths of the national territory. They are open and
ready for adventurous visitors willing to experience
our unique ecosystems, our indigenous flora and
fauna and the legendary hospitality of Dominicans in
rural areas. In spite of the hype elsewhere, no other
country in Central America or the Caribbean has the
biodiversity we have in the Dominican Republic. This
being recognised more and more and, in a sustainable
way, has to become part of what we offer our visitors.
Do you see a significant role for the likes of health
and religious tourism in the country?
We have seen more interest in historic/cultural travel
and wellness travel as a whole. Travelers are interested
in visiting us to learn about our diverse history
and how this has shaped our culture – this includes
Carnival parades, visits to Santo Domingo’s Colonial
Zone to explore our extremely rich cultural heritage,
participating in Holy Week celebrations, making
pilgrimages to the Basilica in Higüey or the Santo
Cerro (Holy Hill) in La Vega and more.
Visitors also are arriving to our more nature-centric
areas, such as Samaná, Puerto Plata and Jarabacoa,
to pursue many forms of wellness – seeking to
“detox” or to disconnect from their devices and daily
stress, and use nature or adventure as a path to their
personal wellbeing. More and more of our hotels have
outstanding spa facilities, where the healing hands of
Dominican masseuses are guaranteed to work their
magic on many a painful back.
You recently announced new investment projects in
Pedernales province. What more can you tell us about
the government’s master plan to develop the region?
Wehaveastrategicmasterplantodeveloptheprovinceof
Pedernales,beginningin2017.Theplanhasbeendesigned
to maintain the sustainability of the protected areas that
make up 55 per cent of the territory of the province.
Despite the evident prosperity of the Capital, and
other hubs like Punta Cana, the reality for ordinary
Dominicans living in rural areas is very different.
What role can the tourism sector play in spreading
the economic benefits to those most in need?
Punta Cana is the destination that sees the heaviest
number of tourism arrivals. However, it is just the
easternmost tip of the island. We are working to
demonstrate to travelers that there is much more to
the Dominican Republic than all-inclusive resorts.
Other up-and-coming tourism hubs include Puerto
Plata, Samaná, La Romana, Jarabacoa and Pedernales,
to name a few.
The tourism industry truly benefits the entire
country, and all of its sectors. From jobs provided
by the existing pillars of tourism – resorts, hotels,
restaurants, spas, attractions and transportation – to
the creation of new jobs through further developments
elsewhere in the country.
Agriculture, animal husbandry and fishing benefit
greatly from tourism as well. All of the food served
in our hotels is grown locally, ensuring rural jobs and
further enhancing the impact of tourism in fighting
poverty. Our food-producing sectors supply the
Dominican and Haitian domestic markets as well as
important export markets in the Americas and Europe.
But clearly, the additional demand arising from an
additional 5.6 million visitors is an additional source
of ‘exports’ to our foreign visitors, without having to
worry about international freight rates.
In addition to these, we are still constantly looking
for ways that we can do more. This is reflected in our
cruise port strategy. Our cruise ports are located near
rural areas that so that those areas may benefit from the
cruise passengers’ spending on locally manufactured
crafts. We are looking for additional ways to increase
the number of tourists that arrive via cruise ship, so
that we may continue to grow the economies of these
surrounding communities.
How concerned are you about the impact of
improved Cuban-US relations and the easing of
travel restrictions for US citizens on what is, after
all, the DR’s most important source market? Which
other countries are you targeting to make up for
any shortfall?
Lifting travel restrictions from the US to Cuba should
increase the rate of growth of the Cuban economy.
The logical consequence is that greater growth in Cuba
FIRST
Bahia de las Aguilas
in Pedernales
province, near the
border with Haiti, is
widely considered
one of the finest
beaches in the world
Allphotographs:MinistryofTourismoftheDominicanRepublic

All of the
food served
in our hotels
and resorts is
grown locally,
ensuring
rural jobs
and further
enhancing
the impact
of tourism
in fighting
poverty in
the DR
14
should result in more Dominican growth: our private
sector has a history of catering to the needs of the
Cuban market in a number of areas, from construction
materials to toiletries to foodstuffs. Moreover, it should
benefit the Caribbean as a whole by making it a more
diverse and unique travel destination for the US tourist.
The hotel industry in the Dominican Republic is
conscious of the capacity constraints in Cuba, a market
with which they have been competing for non-US
tourists for many years now. Once these are overcome,
we will continue to be prepared for further competition
by providing to the most discerning tourists something
unique – our very diversified tourism product, with
our nine distinct ecological zones, our rich and unique
cultural heritage, our growing roster of luxury resorts,
our award-winning golf courses and our gastronomy.
We are well-prepared to welcome the new waves of
travelers that should become ever more interested in
the Caribbean as a result of the changes in Cuba.
In addition, the Dominican Republic is investing
in growth opportunities outside of North America,
and these have already begun to see success. Markets
include, but are not limited to Brazil, Argentina, Chile,
Venezuela and Colombia.
The Hard Rock Hotel chain is developing a
40-storey property in Santo Domingo, which seems
a pretty bullish move, to put it mildly. What is the
Ministry’s strategy for attracting more visitors to
the Capital – and where does the MICE segment
figure in your plans?
The city is a booming hub for business travel. Its
conference and meeting spaces offer the latest in
presentation and professional technology, in a setting
that is as cosmopolitan as it is historic. We are working
to demonstrate to a variety of niche markets that our
capital city has much to offer, whether that may be a
family looking for an educational vacation, a group
interested in haute cuisine, travelers searching for a
boutique hotel experience or business travelers looking
to make the most of their trip.
We are similarly confident in the opportunities for
growth in Santo Domingo, and are doing the necessary
research, so we have the hard data to support our goals.
A recent example is the feasibility study we conducted
on building a new convention centre in Santo Domingo
by 2017.
The MICE segment is an important one for this
destination, particularly given Santo Domingo’s central
location and the accessibility to the other destinations of
Punta Cana, Samaná, Puerto Plata and others.
It is probably fair to say that many visitors to
the DR are unaware that it shares the island
of Hispaniola with Haiti. The private sector-
driven Quisqueya Initiative [to promote cross-
border investment and economic development
between the two] represents an important step
in improving economic – and hopefully, political
relations. What potential do you see for greater
collaboration in tourism?
We have already set several things in motion to help
Haitian tourism regain its growth potential. We have
developed a special committee of leaders from the
private and public sectors of both countries. Together,
they are working to develop and promote not only
tourism to Haiti, but also understanding how we can
work together to grow as a multiple destination – once
they are ready.
Mosquito-borne diseases such as Chikungunya,
and most recently, Zika, have caused widespread
alarm, particularly among those travellers
thinking of starting a family – such as
honeymooners, who have long favoured the
Caribbean as a ‘dream’ destination. What impact
has the outbreak had on tourist numbers in the DR
so far? What is the Government doing to address
the issue, and what would you say to would-be
visitors worried about the situation?
We have not seen a significant change in visitor
numbers, nor many travel cancellations. We have
long been aware of various mosquito-borne ailments
and have been taking proactive measures against such
diseases for many years. Due to this, the impact of the
recent alarm on the country has been minimal – tourist
areas have not been impacted, as we have dedicated
teams working to treat for the insects and educate hotel
operators and locals alike on how to safely destroy
mosquito breeding grounds, which includes regular
removal of any standing water. F
DOMINICAN REPUBLIC
FIRST
Santo Domingo’s
Colonial Zone: the
centrepiece of the
government’s strategy
to develop the capital’s
tourism potential

LA MÁXIMA EXPRESIÓN
DONDE LA ATENCIÓN A LOS DETALLES, HACEN LA DIFERENCIA
FRENTE A LOS MÁS EXIGENTES VIAJEROS.
DE ESTILO Y ELEGANCIA.
Contamos con salones de reuniones y eventos, gran
variedad de servicios de lujo en el Lounge Ejecutivo.
Ubicados en el lujoso y moderno complejo comercial
Blue Mall SD.

Interview with ANGEL ESTÉVEZ BOURDIERD
Minister of Agriculture, Dominican Republic
ANGEL ESTÉVEZ
graduated with a BSc
in Agricultural Sciences
from UASD. He began his
career in 1985 at DOMEX,
an Israeli company
producing and exporting
melons and vegetables,
before joining Anglo-
American as a seller
of agrochemicals. He
subsequently moved
to CALOSA in 1993,
becoming general
manager of the company
in 1996. A member of
the PLD since 1982, he
joined the party’s Central
Committee in August
2012 and was appointed
Minister of Agriculture
on 24 April 2014.
Raising the bar in agriculture
16
The agricultural sector in the Dominican Republic
has expanded significantly in recent years. What
have been the main factors driving this growth, and
how do you see the outlook in the medium term?
Over the past four years, total agricultural production
in the Dominican Republic increased in volume by 5.6
per cent, from 5.7 million metric tonnes in 2012 to
6 million tonnes in 2015. Among the factors driving
this growth were the increased planting of rice, which
posted a record increase of 17 per cent in the first half of
2015, despite the severe drought. As part of this drive,
the Bioarroz project was launched in Juma, Bonao,
renovating three centres producing high-quality rice
seeds and thus improving rice varieties.
More generally, growth in agriculture has resulted
from the additional availability of credit, with US$1.2
billion disbursed over the period. Productivity gains
have been obtained as well: levelling of agricultural
lands enabled a 300 per cent increase in corn [maize]
production in the province of San Juan alone.
Risk management has also been an important factor
in enabling this growth. By virtue of the new Law
on Agricultural Risks, enacted in 2013, some 27,000
subsidised insurance policies have been issued, a
cumulative growth of 74 per cent, covering an area of
16,719 hectares, for about US$5.4 million.
Agriculture should continue to grow 15 per cent by
volume in the medium term, to 7 million tonnes. This we
expect to achieve by incorporating new planting areas –
from 325,000 to 362,500 hectares, a 10 per cent increase;
through a 48 per cent growth in greenhouse production
– reaching some 14 million square metres; by distributing
1.6 million seedlings, covering at least 10,625 hectares
of fruit production; and by better pest control practices
through precision application of pesticides.
Investment in infrastructure, a mainstay of Dominican
agriculture, should continue as well, through the
construction and rehabilitation of 5,000 km of roads
between farms, reducing transport costs for inputs to
farms and of farms’ output to destination markets.
Water scarcity will continue to be addressed by
accelerating the introduction of efficient irrigation
systems on top of our network of water canals. Priority
will be given to the irrigation of bananas and plantains,
which represent 38 per cent of planted areas.
Agricultural credit is set to increase as well, by
70 per cent, from US$1.2 to 2.0 billion. And so is
the expansion of agricultural insurance, by 108 per
cent, from 96,471 to 200,522 hectares. In terms of
employment, we expect to create 112,526 additional
direct jobs, for qualified and non-qualified personnel.
The DR has been extremely successful in adding
value to its tobacco and cocoa exports, in
particular. Which other agricultural products do
you see as offering significant potential in this
regard, and what steps is the government and
private sector taking to move the country further
up the value chain?
There are several crops with high export potential,
which have experienced dramatic growth recently.
Among these, pineapple exports grew by 34 per cent,
mango exports by 7 per cent, passion fruit exports by
291 per cent and eggplant [aubergines] by 174 per cent,
from US$2.3 to 6.3 million.
In the livestock sector, the export of fish and shellfish
grew 38 per cent, from US$9.5 to 13.1 million; beef
exports grew 93 per cent; honey and derivatives grew
38 per cent and milk and dairy products grew 6 per
cent, from US$8.3 to 8.8 million.
The government tries to encourage investment
in these products while focusing on creating and
maintaining the right sanitary conditions to reduce
risks in demanding destination markets in Europe and
North America.
Much of the DR’s agricultural produce still
comes from smallholdings. What support is the
government providing to help improve these
farmers’ productivity and expand their operations?
In order to develop the agricultural sector, priority
is given to supporting small and medium-sized
producers. Whilst all projects and initiatives are aimed
at benefitting all producers, special priority is given
to those smallholders with less than 2 hectares which,
left unsupervised, would have to survive through basic
subsistence farming.
All smallholders are potential agricultural
entrepreneurs. To realise their potential, the ministry
is promoting associations and cooperatives, in order
to increase productivity by allowing the production
of greater volumes of standardised products meeting
the demands for quality of domestic and international
clients. Success in exporting Fairtrade bananas and cocoa
DOMINICAN REPUBLIC
FIRST

17
All small-
holders are
potential
agricultural
entrepreneurs.
To realise
their
potential,
the ministry
is promoting
associations
and
cooperatives,
in order to
increase
productivity
would have been impossible without this approach.
A massive land title programme is also well under
way, so that small holders are eligible for credit
in formal markets. Additional support is provided
through public services such as training, extension,
and land levelling, as well as through the provision of
high-quality planting materials, and our long-term
commitment to the improvement of infrastructure.
At the other end of the scale, where do you see
the greatest investment opportunities for the
expansion of larger-scale agribusiness in the DR?
I think there is a great opportunity in sub-sectors such
as fruit and vegetables, and livestock. The DR has the
necessary conditions to produce almost all kinds of
food. In addition to which, our strategic location allows
our producers to reach quickly and reliably our main
destination markets in the US and Europe. The private
sector has already identified these opportunities,
and it is only a matter of time before the take-off of
Dominican agro-industry is achieved.
There is great investment potential in harnessing the
added value of agricultural commodities such as coconut,
cocoa, and corn [maize], as well as in greenhouse
production, aquaculture, honey and derivatives, among
others. In this fashion, we are ready to take the next step,
moving from our status as a provider of high-quality
commodities. Branded cosmetics and pharmaceuticals
are being produced already with Dominican inputs. The
next step would be to add value to our commodities in
our own territory, taking advantage of our favourable tax
regime for industrial exports, as well as of our optimal
location, logistics and free trade agreements with the US
and Europe.
Last year’s outbreak of Mediterranean fruit fly
was a wake-up call for Dominican producers
who had grown used to relying on the United
States as the main destination for the country’s
exports. How successful has the DR been in
diversifying its export markets, and what steps
are being taken to prepare for the expiration of
preferential tariffs in 2020?
In recent years, the country has diversified both its
exports and its target markets. In this regard, our
main export markets are the US, Haiti, the EU,
Russia, Japan, China, and other Asian and African
countries. Regarding livestock, we managed to reopen
markets in Hong Kong, El Salvador, Cuba and Haiti.
So, we are making good progress in diversifying
our destination markets. And with the joint efforts
of institutions that promote the quality of our
products around the world, such as the Ministry of
External Relations and CEI-RD, we hope to continue
succeeding in the future.
Demand for quality foodstuffs continues to rise
in many parts of the world. To what extent is
the DR able to ramp up its production to meet
this demand?
The DR has the potential to increase its export volume
to address the growing demand in existing markets
as well as the needs of new markets. Our agricultural
exports grew 15 per cent during 2012-15, from US$1.8
billion to 2.0 billion. Over the next four years we
expect an increase of 56 per cent, or US$1.1 billion,
from US$2.0 to 3.1 billion. This is underpinned by the
expected growth in total agricultural production of 15
per cent mentioned earlier.
The DR’s hosting of the 3rd World Cocoa Conference
in May this year is a testament to the quality and
efficiency of the country’s farming and processing
methods. In which other agricultural sub-sectors do
you see the DR leading the world in future?
The DR has the capacity to lead the world in
productivity and quality of a number of products,
including organic bananas, organic and non-organic
avocados, red peppers, plantains and coconuts.
The most serious challenge to the sector has been
the drought that has affected the country over the
past three years. What lessons have been learned
from this experience, and are you confident that the
government is getting to grips with the situation?
Climate change is a growing reality that threatens
world agricultural production, including, of course,
the DR. Some of the corrective measures taken I
mentioned earlier – such as land levelling and precision
irrigation. Other measures include the promotion of
silage for the livestock sector, and the storage of water
in wells and reservoirs, as well as the construction and
repairing of dams. And, of course, the introduction of
high-yielding varieties requiring less irrigation.
The DR’s agricultural sector has benefitted greatly
from the volume of air traffic generated by the
country’s tourism sector. As increasing numbers
of visitors come to the DR from countries such as
Russia, do you see the country’s export footprint
changing significantly?
I believe that these conditions represent an opportunity
to reach markets in which our country still has no
presence, but above all, to increase our exports to
existing markets such as the US, Europe and Asia,
from which 85 per cent of visitors to the DR originate.
Besides that, we are also focused on increasing
domestic exports, interlacing our small producers with
the growing tourism infrastructure of the country. It is
a sizeable market; after all, 5.6 million tourists visited
the Dominican Republic in 2015. F
FIRST

Interview with OSMAR BENÍTEZ
President, Junta Agroempresarial Dominicana (JAD)
OSMAR BENÍTEZ
is the CEO of the
Junta Agroempresarial
Dominicana (the
Dominican Agribusiness
Board). He graduated
from the Universidad
Católica Madre
y Maestra, as an
Agricultural and Food
Technology Engineer
and holds a Master’s in
Agricultural Economics
and Agribusiness
Management from Ohio
State University, USA.
Mr Benítez has been
Agricultural Advisor to
the last 4 Presidents of
the Dominican Republic:
Joaquin Balaguer, Leonel
Fernández, Hipólito Mejía
and Danilo Medina.
Growing for gold
18
How did the creation of JAD come about? What are
the organisation’s main activities, and how does
it differ from other industry associations in the
Dominican Republic?
JAD was created out of a need to establish new technical
skills to facilitate the development of non-traditional
agriculture in the Dominican Republic. We saw that
there was a need to provide technical assistance to
agricultural entrepreneurs who were looking for new
investments to take advantage of the huge market
opening that came about with the US Caribbean Basin
Initiative, under President Ronald Reagan.
Our main activities include increasing the
productivity and competitiveness of the agriculture
and livestock sectors, and improving investment
opportunities in them.
JAD differs from other industry associations due to
the size and extent of its membership representation
throughout the country: we are the largest and most
important organisation of farmers and agribusiness
entrepreneurs in the Dominican Republic with a
membership of over 160,000 producers. In addition to
acting on behalf of its members in any policy discussion
with the Executive, Legislative and Congressional
Powers, JAD also provides the largest and most
complete technical assistance programme to the
farming sector in the Dominican Republic.
Our services range from direct technical assistance
to market development – both export and local – a
commodities exchange, market intelligence and reports,
economic analysis, financial assistance, agricultural
laboratories, farmers’ training and support, watershed
reforestation, and eco/agro tourism, among others.
What benefits do producers derive from their
membership of the organisation?
Membership of JAD offers producers the opportunity
to belong to a recognised national and international
institution that unifies the agricultural sector and
promotes the valuable role played by farmers and
agribusiness in the country: one that promotes the
best interests of the sector and which has obtained
important gains for its members, such as zero tariff
rates for the importation of inputs, equipment and
machinery for the agricultural sector.
In the international arena, JAD acts in the interests
of its members in a number of important areas,
such as leading trade negotiations to ensure proper
treatment of goods and services in accessing potential
markets that will boost our economy. It promotes
the enactment and adoption of laws, policies and
measures that help create a better investment
environment and policies to benefit the agricultural
sector, as well as providing high-quality laboratory
analysis at competitive prices.
Furthermore, JAD offers commercial, organisational,
and technical assistance services, which improve the
productivity and competitiveness of its members. It has
updated information on aspects such as markets, prices,
production costs, and business opportunities, and
provides producers with a programme of Integrated
Management of Pests (IPM) which makes possible the
phytosanitary health of crops, thereby improving the
quality of their produce.
What do you regard as the DR’s greatest
achievements, in agricultural terms?
The Dominican Republic has reached a very high level
of performance and enjoys positive brand recognition
in the international specialty agricultural export
markets, particularly in the organic and fair trade
sectors. The Dominican Republic is the major exporter
of organic bananas and cocoa worldwide.
DOMINICAN REPUBLIC
FIRST
Some like it hot:
Dominican producers
now export more than
100 agricultural products
to world markets

19
In less than
four years,
the DR’s
agricultural
exports have
gone from
US$1.2bn
to almost
US$1.7bn
Are Dominican producers doing enough to
diversify their product portfolios and export
markets, in your view?
Yes, I think so. Dominican producers have worked
very hard to diversify our agricultural economy away
from well-known traditional crops like sugar cane,
cocoa, coffee and tobacco. Nowadays, we export
more than 100 different crops that find their way into
the international market. In less than four years, our
agricultural exports have gone from US$1.2 billion to
almost US$1.7 billion.
One area of Dominican agriculture that still
requires attention, however, is getting producers to
take greater advantage of the country’s existing Free
Trade Agreements, especially DR-CAFTA and our
Economic Partnership Agreement (EPA) with the EU.
What are the main trends shaping the growth and
development of the agricultural sector in the DR,
and which products and niches do you expect to
benefit most?
I would say that the most promising new trends in
international and domestic markets that are driving
the future of the Dominican farming sector sector are:
Organic Agriculture, Tropical Agriculture, Ethnic
Agriculture, Cosmetological and Medical Agriculture,
Touristic Agriculture and Political Agriculture. All
of these provide extraordinary opportunities for
Dominican farmers to participate in a food market-
driven future. The market demands of these seven
segments have shown an exponential increase in
consumption. We should take advantage of that, and
we are working on it.
What rules and regulations should prospective
foreign investors be aware of when exploring
agribusiness opportunities in the DR?
The Dominican Republic has the most complete
foreign investment legal system of any country in
the whole of Central America and the Caribbean,
which is why we have been so successful in attracting
international capital into our economy.
In addition to this legal framework, the DR’s people,
its government and its infrastructure are high-value
assets that any foreign investor would want to have, to
give them confidence in investing their resources. In
addition to which we have a free and open market to
the most important regions of the world.
What do you regard as the DR’s main competitive
advantages in the agricultural sector, and where
do you see areas of concern?
The Dominican Republic’s competitive advantages
include its natural resources, fertile soils, abundant water
supply, skilled labour, economic and political stability,
and the fastest-growing economy in the region.
In addition, we also benefit from a unique
geographical location, close to the most important
markets in the world: the United States and the
European Union.
How satisfied are you with the government’s
support for the sector – particularly its response
to the drought of the past three years? What more
would you like to see it do?
As I mentioned earlier, JAD is the largest agribusiness
institution in the country, so I can safely say that we
speak for the sector regarding the government public
policy for the sector.
Broadly speaking, I would say we are satisfied with
the government’s performance and its attitude towards
the agricultural sector. The current President, Danilo
Medina, when he was still a candidate for the presidency,
committed himself to fulfilling a ten-point policy
proposal that we submitted as a guide to fostering the
agricultural transformation of the country.
To date, his government has complied with each and
every one of these ten points that we jointly agreed that
we would work on together.
What is the Bolsa Agropecuaria de la República
Dominicana (BARD) and how does it work?
The Bolsa Agroempresarial de la República Dominicana
(BARD) was created under Securities Market Law
No. 19-00, with the objective of increasing efficiency
in the trading of products, articles and services in the
industrial and agribusiness sectors. To date, BARD has
provided a platform for new business worth more than
US$500 million to the farming sector. F
FIRST
No grain, no gain: the
Dominican Republic
intends to raise its total
area under cultivation
from 325,000 hectares
to 362,500 by 2020

21
T
he Dominican Republic’s cocoa sector
has begun implementing a sustainable,
value-added business model that bigger
producers around the world can learn
from to protect their own livelihoods and guarantee
the future of the global chocolate industry, according
to the International Cocoa Organisation (ICCO).
In May, the resort town of Bávaro, on the country’s
east coast, will host the ICCO’s third biennial World
Cocoa Conference (3WCC), an opportunity for the
DR’s producers to showcase their achievements and
share their knowledge and experiences in moving
cocoa up the value chain.
“One of the reasons we awarded the conference to
the Dominican Republic was so that representatives
from Africa in particular could talk to growers and
producers here about developing new business models
for growers,” says Dr Jean Marc Anga, the ICCO’s
outgoing executive director and the driving force
behind its strategy to create a sustainable cocoa value
chain since he took over the organisation in 2010.
Cocoa (from the Spanish cacao) cultivation dates
back to at least 400 BC, under the Maya cultures of
Central America and southern Mexico. By the 14th
century, it was a central part of the Aztec civilisation.
The first outsider to drink chocolate was Christopher
Columbus, when he visited the shores of Venezuela
on his third trip to America, but it was Hernán Cortés,
leader of an expedition in 1518 to the Aztec empire,
who returned to Spain in 1528 with the Aztec recipe
for xocoatl.
Over the following 500 years, cocoa cultivation has
spread around the world in a belt 10 degrees either side
of the equator. The largest producing countries today
are Côte d’Ivoire, Ghana, and Indonesia. Prices have
fallen steadily since the high of US$18,000 per tonne
in 1977 to around US$3,000 per tonne over the last
year, and over the last four years, annual production
has averaged around 4 million tonnes.
Since that mid-1970s high, the global cocoa sector,
says Dr Anga, has been increasingly unstable, recently
raising concerns about its future and talk of “peak
chocolate”, whereby supplies will collapse by 2020.
Dr Anga, who has more 20 years’ experience in
agricultural commodity development, seventeen of
which have been acquired at the ICCO, explains the
problems facing the cocoa sector: on the demand side,
“growth in demand is likely to continue for decades as
incomes, population, emerging markets and taste for
more and new cocoa and chocolate products continue
to expand.” What’s more, consumers are increasingly
demanding sustainable, certified, traceable cocoa
and chocolate products. “But we have not been able
so far to reassure consumers that cocoa is sustainably
produced, or that the additional efforts required by
farmers to do so will be rewarded,” he adds.
On the supply side, he says, farmers are struggling to
meet the requirements of demand: “This is due to lack
of organisation, poor business skills, lack of information
on existing cocoa resources, low yields, losses from pests
and diseases, ageing trees, land and soil degradation,
competing land use, food security, climate change, lack
of access to financing, and finally, young generations
moving away from the country.” At the same time, the
long-term nature of cocoa growing means that supply is
further threatened by under-investment in research, and
creating seed banks, for example.
Under Dr Anga’s leadership, the ICCO continued
with its roots-and-branch overhaul of the sector that had
begun in 2007 in Accra, Ghana, when the ICCO brought
together representatives from all the players in the cocoa
value chain: producers, cooperatives, traders, exporters,
processors, chocolate manufacturers, wholesalers,
government and non-government organisations,
financial institutions, as well as donors and international
development aid bodies. Out of this meeting several
priority areas along the cocoa value chain were identified,
chief among them creating an institutional framework
through the ICCO, along with sustainable production,
trade, processing and manufacturing, and consumption.
Two years later, participants got together to set an
agenda for future meetings that included transparency,
compliance with laws, remuneration for quality cocoa,
productivity and improving income for farmers, access
to credit and rural development, market access and
information, decent working conditions, support
for farmers’ associations, land use planning and
infrastructure, and conservation and diversity.
A year later, in 2010, an International Cocoa
Agreement was concluded in Geneva under the auspices
of the UN. The next year, the ICCO agreed to organise
the WCC in 2012 in Côte d’Ivoire’s capital, Abidjan.
“At that conference, all the stakeholders in the
cocoa value chain reviewed the key challenges facing
FIRST
A model for the future of cocoa
DOMINICAN REPUBLIC
JEAN-MARC ANGA
Executive Director,
International Cocoa
Organisation (ICCO)
JOSÉ ANTONIO
MARTÍNEZ ROJAS
National Coordinator,
3WCC
Interview with DR JEAN-MARC ANGA and DR JOSÉ ANTONIO MARTÍNEZ ROJAS
Executive Director, International Cocoa Organisation (ICCO), and National Coordinator, 3WCC

It is important
that changes
are put in
place so that
producers
can earn a
living wage
from cocoa.
In short,
we need to
stop selling
beans and
start selling
chocolate
22
the world cocoa economy, hammering out a strategy
to tackle them. The outcome was the Global Cocoa
Agenda for a sustainable world cocoa economy, with
an action plan at the global level to implement specific
actions at national levels,” explains Dr Anga.
The Global Cocoa Agenda was again ratified at the
Amsterdam WCC, adding further recommendations,
to address cocoa genetic resources, consumption
promotion in emerging and origin countries, prices
and farmers’ incomes, diversification, minimum
farm size and crop combination to ensure economic
profitability, land tenure, best agricultural practices,
farmers’ organisations, farmers’ training in business
management, certification, child labour, gender
equality, the impact of climate change, and biodiversity.
Since it was set up in 1973, the ICCO has been
based in London, home to the benchmark NYSE Liffe
cocoa futures contract, but is now set to relocate to
Abidjan, a decision that not everybody in the ICCO,
particularly some Latin American and Asian producers
have welcomed.
At the Abidjan WCC, President Alassane Ouattara,
who won the country’s elections in 2010 but only took
full control of Côte d’Ivoire in 2011, offered to house the
ICCO in Abidjan rent free for ten years during which
the organisation would build its offices in the capital.
As Dr Anga explains, President Ouattara has been
pressing ahead with a reform of the cocoa sector, the
country’s most important industry. The government
has introduced forward-selling auctions of cocoa,
aimed at improving price stability and guaranteeing its
farmers a greater share of revenues.
Until civil war erupted in 2002, Abidjan was a
financial hub for West Africa, and home to the
headquarters of the African Development Bank. The
hope now is that the country once described as the
Switzerland of Africa can now regain its former role.
Dr José Antonio Martínez Rojas, founder of the
Dominican National Cocoa Commission and National
Coordinator of 3WCC, signed the agreement to move
the ICCO to Abidjan in 2001. He remembers visiting
Côte d’Ivoire shortly after to oversee the ICCO’s move
there. “It was crazy: there was a curfew and fighting
going on, so we decided to put off the move until things
settled down. But it was always the intention to move
here: after all, this was where the first WCC was held,
and West Africa is the biggest producer,” he explains.
Dr Martínez, who has spent most of his life
working in the cocoa sector, has been Chairman of the
ICCO and twice Chairman of the Alliance of Cocoa
Producing Countries (COPAL), headquartered
in Lagos, Nigeria, and is a pioneer in producing
organic cocoa, having created the Hispaniola brand
in 1985. He stopped exporting several years ago. “I
may resume exporting when my children return from
their studies in the United States,” he says from the
Bibijagua bar, restaurant and craft market complex he
owns, on a prime location along the beach front in
Bávaro, where the WCC will be held.
A long-standing activist in supporting farmers,
DOMINICAN REPUBLIC
FIRST
Photographs(rightandcentre):AlastairHarris

23
Growth in
demand is
likely to
continue for
decades as
incomes,
population,
emerging
markets and
taste for new
cocoa and
chocolate
products
continue to
expand
Dr Martínez helped set up the National Cocoa
Commission in 1976 to formulate policy relating to
cocoa in the DR, including policies which impact the
prices paid to farmers. It is a semi-public organisation
working in collaboration with the Cocoa Department
of the Ministry of Agriculture. “The NCC is the DR’s
representative in the ICCO and is also tasked with
maintaining the quality of exported cocoa and runs
a free quality control lab for this process. It approves
exports of Dominican cocoa and grants export
licenses,” explains Dr Martínez.
The Dominican cocoa value chain
The Dominican Republic has consolidated its position
as a leading cocoa exporter in recent years and is
now increasingly recognised as a producer of quality,
organic and Fairtrade-certified cocoa.
The prices farmers in the DR receive for their cocoa
is set daily by the companies in the private sector
(which includes producer cooperatives). Exporters sell
based on the New York price, which is also the basis for
the local producer price.
TheDRmayhavecarvedanicheforitselfasaproducer
of high quality, organic cocoa, says Dr Martínez, but
if it is to survive and grow in the long term, its cocoa
sector needs to address the disparity between a growing
international market and weakening local systems of
production, which are characterised by low investments
in farm maintenance, ageing trees and a failure to attract
younger generations. “As the cocoa produced in the DR
can command some of the highest prices on the world
market and has a promising future, it is important that
changes are put in place in order to make sure that
producers capture more benefits from this and earn a
living wage from cocoa. In short, we need to stop selling
beans and start selling chocolate” he argues.
There are between 36,000 and 40,000 active cocoa
producers in the DR who sell to a number of private
exporters. Among these, CONACADO, the National
Confederation of Dominican Cocoa Producers,
is made up of 9,200 producers, while Rizek Cacao
S.A.S., a family-run firm dating back a century, has
6,000 registered producers. Both CONACADO and
Rizek have worked hard to find international markets
for their cocoa and are certified to many social and
environmental standards.
CONACADO’s export director, Abel Fernández,
explains that the cooperative began as a development
project in 1985 through initiatives to improve
both the quality of Dominican cocoa as well as the
living standards of growers. “We work closely with
Fairtrade to build and renovate schools, libraries
and community centres, as well as providing school
supplies and scholarships for students from low-
income families,” he says. The organisation has
also helped with road improvements, building and
repairing bridges, electrification projects, storage/
drying/cocoa collection facilities, housing assistance
for producers, clean water projects, providing a rural
healthcare clinic and free medical check-ups, erecting
FIRST
Opposite:
A path well trodden:
local producers
bring their crop to
CONACADO’s drying
and fermentation
facility in Yamasa
Left:
Budding
entrepreneurs:
improved strains of
cocoa are attracting
young people to
cocoa production
Photograph:RizekCacaoS.A.S.

The DR cocoa
value chain
has both
potential and
limitations:
organic
fermented
cocoa can
command
much higher
prices but,
due to local
production
constraints,
certain
bottlenecks
exist
24
buildings for women’s associations and other support
for women’s groups.
“With help from partners such as the cocoa
processor ICAM, CONACADO soon took the lead
in improving the drying and fermentation process
and in identifying and consolidating Fairtrade and
organic markets,” explains Mr Fernández. Following
CONACADO’s example, other exporters also began
investing in drying and fermentation facilities in order
to capture the higher value of fermented and organic
fermented cocoa. CONACADO now sells around a
quarter of the DR’s cocoa market. “We were also the
first organisation to buy from organic producers,” adds
Mr Fernández.
The DR cocoa value chain has potential and
limitations in equal measures: organic fermented cocoa
can command much higher prices, and demand for it
has increased in keeping with the changing consumer
tastes in the West that Dr Anga and Dr Martínez have
identified. This places the DR in a favourable position
as the leading global producer of organic high-quality
cocoa. But due to local production constraints, certain
bottlenecks exist in the value chain. Value is created
through drying and fermentation, which is not in the
hands of individual producers, as is the case in many
countries. This results in cocoa companies having to
make costly investments in drying and fermentation
facilities and in producers not being able to sell high-
value cocoa directly.
Looking to the future
Nevertheless, cocoa is increasingly perceived as
attractive relative to other crops due to recent price
rises, while at the same time, there is increased interest
in cocoa cultivation by traditional producers such as
Rizek. Higher cocoa prices are also said to be attracting
new farmers who are keen to do things “properly” and
are planting with good quality material, which is a
positive development for the industry.
At the same time, as Juan Cuello, executive secretary
of the National Cocoa Commission, explains, efforts
are underway to boost productivity through the use
of improved strains of cocoa that are attracting young
people to cocoa production, or for children to take over
their parents’ plantations.
Cocoa and coffee cultivation also play an important
role in protecting the DR’s environment, says Mr Cuello.
“Together they account for around 20 per cent of forest
cover. You cannot grow these crops without existing
forest, so it is vital for us to continue to extend forest
cover in the DR through planting saplings. Our forest
cover also protects the sources of our rivers, high up in
the mountains,” he adds. The government has proposed
legislation to pay cocoa and coffee farmers a subsidy in
return for protecting and extending forest cover.
The WCC in Bávaro will provide a unique forum
to take stock of the progress achieved by stakeholders
since the implementation of the Global Cocoa Agenda
adopted in Abidjan in 2012, as well as to review recent
developments in the cocoa sector. Exhibition space
will give brands an opportunity to showcase their
products and projects to the most influential gathering
of professionals from the cocoa and chocolate industry,
says Dr Martínez.
“We expect more than a thousand delegates, among
them industry leaders from all geographical regions
throughout the entire supply chain, and there will be
many side events and parties during the week. Equally
importantly, as Dr Anga has said, it will be a fantastic
opportunity to for our guests to learn about what we
here in the Dominican Republic have been doing to
ensure the sustainability of the sector.” F
DOMINICAN REPUBLIC
FIRST
The organic cocoa market represents a very small
share of the total cocoa market, estimated at
less than 0.5 per cent of total production. ICCO
estimates production of certified organic cocoa
at 15,500 tonnes, sourced from the following
countries: Madagascar, Tanzania, Uganda, Belize,
Bolivia, Brazil, Costa Rica, the Dominican Republic,
El Salvador, Mexico, Nicaragua, Panama, Peru,
Venezuela, Fiji, India, Sri Lanka and Vanuatu.
However, the demand for organic cocoa products
is growing at a very strong pace, as consumers are
increasingly concerned about the safety of their
food supply along with other environmental issues.
According to Euromonitor International, global
organic chocolate sales were estimated to have
increased from a value of US$171 million in 2002 to
US$304 million in 2005.
Certified organic cocoa producers must comply
with all requirements associated with the legislation
of importing countries on production of organic
products. The benefit for cocoa farmers is that
organic cocoa commands a higher price than
conventional cocoa, usually ranging from US$100 to
US$300 per tonne. However, originating countries
with smaller volumes can fetch much higher
premiums. This premium should cover both the cost
of fulfilling organic cocoa production requirements
and certification fees paid to certification bodies.
Organic cocoa and chocolate

Interview with HÉCTOR RIZEK and MASSIMILIANO WAX
CEO and Vice-President, Strategy and Business Development, Rizek Cacao S.A.S.
HÉCTOR RIZEK
CEO, Rizek Cacao
Moving up the value chain
26
T
he Dominican Republic may be one of
the world’s smallest producers of cocoa,
exporting around 85,000 metric tonnes a
year – a drop in the ocean compared to
Côte d’Ivoire’s 1.5 million tonnes – but it has earned a
reputation in international markets for the quality of its
organically grown beans.
Over the last two decades, the country’s oldest and
largest producer, Rizek Cacao S.A.S., has been driving
the transformation of the cocoa sector, establishing the
Dominican Republic as a source of high-grade beans.
Having established itself as a trusted supplier to
some of the world’s leading chocolate producers, such
as Meiji, Mars, Storck, Scharffenberger, and Kraft,
along with smaller manufacturers like the UK’s Green
Blacks, or French luxury chocolatier Valrhona over
the last two decades, in 2011, Rizek decided to become
the Dominican Republic’s first cocoa producer to take
the bean to the bar. The result is Kah Kow, a range of
four 50-gram full-milk, 55 per cent, 62 per cent and 70
per cent bars, along with a “milk-no milk”, all-vegetable
creamy chocolate, made with almond and coconut.
For the moment Rizek has no plans to export the
Kah Kow range, which is available through selected
high-end outlets in the DR, as well as from its own
Kah Kow shop in Santo Domingo’s Blue Mall
shopping centre. The establishment is not only a retail
outlet, but provides customers with a “full chocolate
experience,” explaining the production process from
bean harvesting through to fermentation, and then the
different stages involved in producing chocolate bars.
Visitors are invited to learn to identify the qualities that
make Rizek’s chocolate special at tasting sessions. Also
available at Rizek’s ‘house of chocolate’ are chocolate
cones, and its spreadable Chocodamia, a blend of
chocolate with macadamia; Ganache, a low-sugar
chocolate mousse; and a lighter product, called Parfait.
Founded in 1905, Rizek is the largest producer of fine
or flavour cocoa in the DR. The family-owned business
has some 2,000 hectares of cocoa cultivation, and also
buys some beans directly from its network of around
6,000 small-scale farmers, as well as sourcing through
intermediaries, producing around 14,000 tonnes a year.
Traditionally, Dominican cocoa, known as ‘Sanchez’
after the port from where it was originally exported,
had a poor reputation on international markets.
Recognising that the DR couldn’t compete with
the major cocoa producers of West Africa in terms
of quantity, in the 1990s, Rizek decided to focus on
producing high-quality cocoa beans that would
differentiate it from other competitors. This has
allowed it to meet the demands of luxury chocolate
makers constantly in search of subtle variations in
taste and bouquet. “Since then, we’ve become a very
different animal: we create new things in the cocoa
world,” explains CEO Héctor Rizek, whose great-
great grandfather began the business.
The transition toward high quality production has
involved what Mr Rizek calls “a new definition of who
does what” that started with persuading growers to
introduce new varieties of cocoa and then creating a
control system that allows the company to trace the
cocoa throughout every step of the supply chain.
Producing luxury chocolate starts with growing
the type of cocoa beans that upscale chocolate makers
want. “Using genetic material already in seed banks
and clone gardens, we have improved on the varieties
that have been here for more than a century, such as
criollo, nacional, and trinitario, sometimes creating new,
successful hybrids” explains Mr Rizek.
The next stage in differentiating Rizek’s beans is
the fermentation process, vital for bringing out the
subtle differences in flavour. This begins with drying
the beans. In the past, the poor quality of the DR’s
beans was in large part due to incomplete drying, says
Massimiliano Wax, Rizek’s Vice-President Strategy and
DOMINICAN REPUBLIC
FIRST
MASSIMILIANO WAX
Vice-President,
Strategy and Business
Development, Rizek Cacao

Dominican Republic leads CELAC to promote regional economic integration

Dominican Republic leads CELAC to promote regional economic integration

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