Although Covid-19 now poses significant challenges to FDI in the Dominican Republic, 2019 was a year of growth.
The UN Conference on Trade and Development’s World Investment Report 2020 revealed that inflows increased by 19%, growing to $3bn, mainly linked to investments in the telecommunication and power sectors.
The main investor in the country was the US, representing almost 32% of inflows.
Tourism accounted for as much as 30% of FDI inflows in the Dominican Republic in 2019, so the downturn in this sector caused by the Covid-19 pandemic will hit overall FDI flows hard in 2020.
Project announcements for the construction of tourism infrastructure declined by 45% in the first quarter of 2020, in comparison with 2019’s quarterly average, the World Investment Report 2020 shows.
The report also states that new ecotourism infrastructure projects planned before the pandemic are now at risk of being postponed or cancelled altogether.
The Embassy of the Dominican Republic in Spain and the Official Chamber of Commerce, Industry and Services of Madrid held a virtual roundtable on 23 June, titled ‘Dominican Republic versus Covid-19: Economic reopening and business opportunities’. During the event, Dominican Republic Minister for Economy, Planning and Development Juan Ariel Jiménez highlighted how his country has the best economic growth prospects of any Latin American nation in 2020, according to the UN’s Economic Commission for Latin America and the Caribbean.
The pandemic may create opportunities as well as challenges. Like other Latin American countries such as Costa Rica and Mexico, the country has opportunities to increase manufacturing of medical equipment in response to the pandemic.
According to the World Investment Report 2020, this could enable the country to boost FDI flows in this sector.