During the final week of November 2023, the corporate director of economic studies for Latin America at Scotiabank pointed out that “the Mexican economy will maintain its good dynamism at least until the first half of 2024 because the public deficit will focus on consumption, but further onward and with the change of government the progress will be slower.” This statement was given at the same time that the Timely Indicator of Economic Activity, prepared by Mexico’s National Institute of Statistics and Geography (INEGI), disclosed that during October, economic activity decreased by 0.1% compared to the previous month of September. However, when making an annual comparison, the economy would have expanded 2.9% for that month.

Mexico will get a boost from nearshoring

To a large extent, the positive expectation maintained by various analysts is related to nearshoring. The president of the Association of Banks of Mexico declared that due to the relocation of industry supply chains, “Mexico’s exports could experience an increase of between 15 billion and 50 billion dollars for the next four years, but there are several challenges ahead.” On the other hand, in the words of the Secretary of Foreign Affairs, Alicia Bárcena, Mexico still does not understand this phenomenon and the critical opportunity it represents to boost the economy,” which is taken  better advantage of by other nations like Vietnam, for example.” However, it is worth noting that Mexico attracted 5.4 billion dollars in foreign direct investment to manufacture cars and trucks in the first three quarters of 2023. According to data from Mexico’s Ministry of Economy, this amount represents an increase of 67.7% year-on-year and a record high.

At the same time, according to data also from the Ministry of Economy, Mexico attracted 2.7 billion dollars of foreign direct investment in the mining industry in the first three quarters of 2023, the most significant amount in similar periods in the last decade. Finally, it is worth noting that Banco Santander estimated that in just over a year, foreign direct investment in Mexico will exceed the capture of remittances due to the nearshoring phenomenon. After presenting the “Nearshoring Data Monitor,” the bank specified that this dynamic would benefit employment, growth, development, banking, and credit. Despite implementing a minimum wage increase in Mexico at the beginning of 2024, more nearshoring will occur.

The agriculture sector has lost some productivity

The positive FDI figures and their promising impact on developing sectors such as manufacturing, financial services, and automobiles, among others, contrast with the recent data published regarding the primary or agricultural sector. It serves as an example to detail that corn production has not rebounded under the current government and presented a productivity loss between 2018 and 2022. It decreased from 27 million 169 thousand tons to 26 million 553 thousand during that period. In parallel to these figures, in November 2023, it was published that the “2022 Agricultural Census” prepared by the INEGI showed that the high costs of inputs, losses due to inclement weather, decreased sales, and even insecurity are some of the problems facing Mexican agricultural producers.

These data serve to expand the context in which, according to some analysts, the price of tortillas is headed for a new increase during the first months of 2024, also caused “by the transgenic corn war by which Mexican President Lopez Obrador banned genetically modified (GM) corn for human consumption, the increase in the cost of electricity, gas and the maintenance costs of the tortilla machines .”

It will be necessary to review how the abovementioned variables impact employment and consumption in the country. For now, we must be attentive to the minimum wage increase in Mexico that will be implemented in 2024.

The minimum wage increase in Mexico will have both positive and negative effects

The Mexican government has said that the new proposal for a minimum wage increase in Mexico will benefit more than 6.3 million workers. However, analysts also point out that micro and small businesses will be put in an adverse circumstance due to increased labor costs since up to 90% of their employees are compensated at that income level. The questions that must be raised are: How will Mexico better involve the primary sector in the dynamics of integration with the US economy? Will the minimum wage increase in Mexico go hand in hand with increases in the marginal productivity of work and competitiveness? In the international context the country faces, which sectors will benefit most from this situation? Where will it be worth investing in the Mexican economy?

The minimum wage increase in Mexico in 2024 can have multifaceted effects on the country’s economic landscape. On the one hand, an increase may lead to higher business costs, potentially diminishing their competitiveness in domestic and international markets. This could result in reduced foreign investment and a shift of some industries to lower-cost regions. However, from a productivity standpoint, higher wages can incentivize Mexican workers to enhance their skills and output, potentially driving innovation and efficiency in various sectors. Additionally, an uptick in purchasing power among lower-income groups can stimulate domestic consumption, fostering economic growth and reducing income inequality. Thus, while a minimum wage hike may introduce short-term challenges for businesses, its long-term impact on Mexico’s overall economic health depends on a balanced approach that considers both competitiveness and the welfare of its workforce.

Brazil is one of the largest economies in the world and is ranked within the top 10 in terms of nominal GDP. This is primarily due to its well-developed industrial sector. Industrial sectors in Brazil represent the majority of the national gross domestic product.

The most significant sectors industrial sectors in Brazil are comprised of the following industries: automotive, agricultural, chemical, steel, metallurgy, mining, and petrochemicals.

In this blog post, we will learn about Brazil’s leading industrial sectors and examine each one’s importance for the national economy.

The role of industrial sectors in Brazil

The development of Brazilian industrial sectors is encouraged by government policies, which create conditions favorable for their development.

Several industries in Brazil are responsible for most of the Brazilian Gross Domestic Product (GDP). They guarantee the production of goods essential for the population, such as food, clothing, medicines, and electronics, among many others.

Brazilian industry is mainly concentrated in the Southeast and South regions of the country, where the most prominent industrial centers are located. São Paulo has the most industrial activity in Brazil, followed by Rio de Janeiro and Minas Gerais.

The automotive industry in Brazil

The automobile industry is one of the industrial sectors most important in the Brazilian economy. With approximately 4% of GDP participation, the sector generates more than 1.3 million direct and indirect jobs.

This is one of the industrial sectors in Brazil that plays a crucial role in the country’s economy. This is because it is responsible for producing automobiles, trucks, motorcycles, and accessories that are essential in transporting people and cargo, spurring economic development between states and cities. Some of the major automobile manufacturers in Brazil include:

• Fiat Chrysler Automobiles (FCA): The company has a strong presence in Brazil and has been manufacturing vehicles there for many years.
• Volkswagen: Volkswagen has a long history in Brazil and produces a range of vehicles for domestic and export markets.
• General Motors(GM): GM has manufacturing facilities in Brazil and produces several models for the Brazilian market.
• Ford: Ford operates in Brazil and produces various vehicles tailored to the local market.
• Renault: The French automaker is in Brazil and manufactures vehicles at its local facilities.
• Toyota: Toyota has been expanding its presence in Brazil and produces vehicles tailored for the local market.
• Honda: Honda has manufacturing operations in Brazil and produces vehicles and motorcycles for the domestic
• Hyundai: Hyundai has invested in Brazil and produces vehicles for the local market.

The Brazilian agricultural sector

Agriculture consists of activities associated with soil cultivation and animal husbandry to produce food and supply raw materials for the processing industry. It is part of the economic sector and develops through extensive or intensive systems in rural areas. Agriculture production plays a vital role in the international economy and is one of the largest industrial sectors in Brazil. It is one of the sectors with the most considerable growth in the country. Among the most prominent agribusinesses in Brazil are:

• BS SA: JBS is a global leader in the meat processing industry and one of the largest beef producers in the world. The company is heavily involved in beef, pork, and chicken production.
• Bunge Limited: Bunge is a significant player in agribusiness and food processing. The company is involved in producing and processing soybeans, grains, and oilseeds and marketing and distributing agricultural commodities.
• Cargill: Cargill is a multinational agribusiness company that operates in various segments, including the production and processing of agricultural commodities, food products, and animal nutrition.
• ADM (Archer Daniels Midland): ADM is a global agribusiness conglomerate involved in producing and processing crops such as soybeans, corn, and wheat. The company also deals with food ingredients and feed products.
• Bayer: Bayer is a major player in the agrochemical and seed industry. The company develops and sells crop protection products, seeds, and traits.
• Syngenta: Syngenta, now owned by ChemChina, is a global agribusiness company specializing in seeds, crop protection, and other agricultural technologies.
• John Deere: John Deere is a well-known agricultural machinery and equipment manufacturer with a strong presence in Brazil. The company provides farm equipment and solutions to the Brazilian agriculture sector.
• Marfrig Global Foods: Another major player in the meat processing industry, Marfrig is involved in beef, pork, and poultry production and export.
• Copersucar: Copersucar is one of Brazil’s largest sugar and ethanol trading companies. The company produces and exports sugar and ethanol derived from sugarcane.
• Vale S.A.: While primarily known for its involvement in the mining industry, Vale is also a significant player in agribusiness, particularly in producing iron ore and pellets used in steelmaking.

The steel industry in Brazil

The steel industry is also one of Brazil’s most critical industrial sectors. Steel is one of the most essential inputs in civil construction and the automotive industry.

The Brazilian steel industry began in the 40s with the establishment of the first factory in the country. Since then, the sector has developed significantly, and today, Brazil is the fourth biggest steel producer in the world. The major players in the steel industry in Brazil are:

• Gerdau SA: Gerdau is one of the largest steel producers in the Americas and has a strong presence in Brazil. The company produces long steel products, including rebar, structural shapes, and wire rods.
• Usiminas (Usinas Siderúrgicas de Minas Gerais SA): Usiminas is a leading integrated steel producer in Brazil, with a focus on flat steel products such as hot-rolled and cold-rolled coils, plates, and galvanized products.
• ArcelorMittal Brasil: ArcelorMittal, a global steel giant, has a significant presence in Brazil through its various operations. The company produces a wide range of steel products, including flat and long steel products.
• Companhia Siderúrgica Nacional (CSN): CSN is one of the largest steel producers in Brazil and is involved in producing flat and long steel products and mining activities for iron ore.
• Votorantim Siderurgia: Votorantim Siderurgia is part of the Votorantim Group and produces long steel products, including rebar and wire rods.
• Ternium Brasil: Ternium is a leading American steel producer and operates in Brazil. The company produces a range of steel products, including flat and long steel products.
• Vallourec Brasil: Vallourec is a global leader in premium tubular solutions. It is in Brazil, producing seamless steel tubes and pipes for various industries, including oil and gas.

The Brazilian metallurgical industry

Metallurgy is another one of the most important industrial sectors in Brazil.

It is responsible for transforming steel and, consequently, supplying materials for the civilian construction, automotive, and aeronautical industries, among others.

Brazilian metallurgy has stood out internationally in recent years, thanks to the technological innovations introduced by companies in the sector. Some prominent companies in the Brazilian metallurgical sector include the aforementioned significant players in the Brazilian steel industry.

The petrochemical industry in Brazil

The importance of the petrochemical industry in Brazil is significant. Petrochemistry is the area of chemistry dedicated to obtaining products from oil and natural gas.

Petrochemicals are one of Brazil’s most important industrial sectors and are responsible for a large part of the production of fuels, energy, rubber, plastics, etc. These raw materials are essential for manufacturing many products necessary for day-to-day living. The major players in the petrochemical sector of the Brazilian economy are:

• Braskem S.A.: Braskem is the largest petrochemical company in Brazil and one of the largest in the Americas. The company produces many petrochemical products, including polyethylene, polypropylene, PVC, and chemical intermediates.
• Petrobras (Petroleo Brasileiro SA): Petrobras is Brazil’s state-controlled oil and gas company and has a significant presence in the petrochemical sector. The company produces petrochemicals such as ethylene, propylene, and various other chemical products through its refining and petrochemical operations.
• Ultrapar Participações S.A.: Ultrapar is a Brazilian company with operations in the petrochemical sector, particularly in distributing petrochemical products and other related services through its various business units.
• Unigel: Unigel is a Brazilian petrochemical company that produces a range of petrochemical products, including acrylic resins, methacrylates, and other specialty chemicals.
• Quattor: Quattor was a major petrochemical company in Brazil, but it has since been acquired by Braskem, further strengthening Braskem’s position in the Brazilian petrochemical industry.
• Oxiteno: Oxiteno, a subsidiary of Ultrapar, is a leading producer of specialty chemicals and petrochemicals in Brazil. The company produces many products, including surfactants, solvents, and chemical intermediates.

The Brazilian economy is one of the largest and most dynamic in Latin America and the world. It exerts a significant influence on regional and global markets. Central to its economic prowess are several key sectors that have achieved advanced development and global competitiveness over the decades. For instance, the automotive industry, anchored by major manufacturers like Fiat Chrysler Automobiles, Volkswagen, and General Motors, underscores Brazil’s capabilities in manufacturing and innovation, catering not only to domestic demand but also serving as a hub for export markets. The agribusiness sector, boasting giants such as JBS and Bunge, positions Brazil as a global agricultural powerhouse, with robust production and exports of commodities like soybeans, beef, and poultry.

Meanwhile, in the steel and metallurgical sectors, companies like Gerdau, Usiminas, and ArcelorMittal Brazil exemplify Brazil’s strength in transforming raw materials, particularly iron ore, into value-added steel products, supporting infrastructure and industrial development domestically and internationally. Brazil’s petrochemical industry, led by Braskem and Petrobras, further diversifies its economic landscape, providing essential chemical products and serving as a cornerstone for various downstream industries. These industrial sectors in Brazil contribute significantly to the country’s GDP and underscore its multifaceted economic capabilities and its role as a pivotal player in the global economy.

Inflation management is one of the best-evaluated areas within Uruguayan President Lacalle Pou’s management.

Businessmen’s expectations for a favorable business climate in Uruguay in 2024 remain steady. This is the case even within a scenario where, in recent months, several signs of a less favorable economic panorama have taken hold.

That is one of the main conclusions of the business expectations survey carried out by the Uruguayan consulting firm Exante, whose latest edition was recently released. The survey covered the opinions of 330 managers and senior executives of large and medium-sized companies operating in Uruguay. It was carried out between October 2 and October 31, 2023.

85% of the executives consulted consider that the business climate in Uruguay is “good” or “very good.”

Among the most positive aspects that currently contribute to the business climate in Uruguay are the legal security and stability of the country. The businessmen also mentioned straightforward rules, low inflation, economic openness, and political and legal stability.

Among the most negative aspects of the country’s business climate they mentioned were the exchange rate delay, high costs, bureaucracy, unions, labor conflict, market size, and the situation in

Economic Situation

In this new semi-annual survey, positive responses regarding the recent economic performance and the general situation of companies in the last year fell again. Nearly 25% of those surveyed consider the economic situation less favorable than a year ago.

Meanwhile, the growth expectations of the Gross Domestic Product (GDP), with a horizon of three or four years, moderated again and are barely above 2% annually (when in 2021 and until the beginning of 2022, they had risen on a 3% basis annually).

According to Exante, this is consistent with what the macroeconomic indicators indicate, with the shift towards more restrictive financial conditions in the international context and the fact that several sectors continue to be exposed to severe competitiveness difficulties within the region.

Fall in inflation and adjustment of expectations for the business climate in Uruguay

In Uruguay, inflation is currently approximately 4% and is within the target range set by government authorities, between 3% and 6%. The sharp drop in recent months has been reflected in an improvement in businessmen’s inflation expectations.

According to the survey, only 6% of respondents expect inflation to close 2024 above 8%, and half believe it will be within the target range.

Expectations over three or four years also fell, with an expected average inflation of 6.1%, contrasting with records systematically higher than 7% in the years before the pandemic.

In any case, the survey warns that inflation expectations are not fully anchored since, when assessing the business climate in Uruguay, half of executives continue to expect inflation to exceed the target range in that medium-term horizon.

On the other hand, almost 40% of those surveyed indicated that their companies must incorporate minor nominal price and cost adjustments in their budgets for 2024. This shows that inflationary inertia still represents an important challenge for economic policy, Exante highlighted.

What is expected about the dollar?

Most executives surveyed anticipate an exchange rate higher than the current value ($39.9), although lower than they estimated in previous surveys. A third of business owners foresee an exchange rate below $41 within a year.

The situation and prospects for companies

Despite the signs of a less optimistic situation, the businessmen consulted maintain a relatively positive vision of the business climate in Uruguay and the performance that their companies will have during the coming months.

In this sense, about half expect an increase in production and greater investment, while negative responses do not exceed 10% in either of the two areas.

In both cases, this is a more optimistic outlook than the one that prevailed in the years before the pandemic, when the economy was also relatively stagnant (at that time, positive responses were between 20% and 30%), notes Exante.

In addition, the proportion of those who expect a favorable business climate in Uruguay and an increase in profitability in 2024 remained at 35%. In any case, the net balance of responses “will increase” – and “will decrease” remains positive (23%).

Hiring of personnel and real salary

Regarding the decision to hire personnel, a cautious view continues to predominate. Only two in 10 executives indicate they expect to hire more workers next year.

The high real salary (49%) appears as the main element that, in the opinion of businessmen, determines the increase in employment. This is followed by low business volume (46%) and the availability of labor-saving technologies (40%), which are among the most mentioned.

In any case, the net balance of responses will “increase” vs. “will decrease” about employment in the company itself varied slightly and remains positive.

Main challenges in the business climate in Uruguay

Six out of 10 responses indicated that their companies’ main challenge is cost pressure. This is consistent with the situation of low competitiveness and growth that the economy is experiencing. Other factors, such as growing competition, human resource management, and lack of demand, also appear on the list. These conditions were noted by approximately one-third of those consulted.

How do you evaluate government management?

The evaluation of the management of Luis Lacalle Pou’s government continues to be “extremely favorable,” according to Exante. 79% approve of it, and only 2% disapprove of it.

The balance is favorable in almost all management areas. Still, on this occasion, there was an appreciable increase in positive assessments regarding the management of inflation and, on the contrary, a deterioration in the net balance of responses regarding international competitiveness.

The business climate in Uruguay offers considerable advantages

The business climate in Uruguay offers several distinct advantages. Firstly, Uruguay boasts a stable political environment with a strong rule of law, ensuring predictability and security for investors. Secondly, its strategic location between the larger economies of Brazil and Argentina provides access to a broader market and regional integration benefits. Thirdly, Uruguay has a highly literate and skilled workforce known for its proficiency in various sectors, particularly services and technology. Furthermore, the country’s robust infrastructure, including modern ports and efficient transportation networks, facilitates seamless trade operations. Additionally, Uruguay has established a favorable regulatory framework for foreign investments, offering incentives, tax breaks, and protection mechanisms to encourage business growth and innovation. Lastly, its commitment to sustainable practices and environmental stewardship positions Uruguay as a responsible and forward-thinking business destination, appealing to global partners and conscious investors alike.

US and European companies will invest their capital in the country, says Minister Álex Contreras.

Confidence in investing in Peru is at its highest level in recent years. It improved from fifth to first place as the most attractive country in the region for foreign capital in 2024. This assessment is according to a recent survey conducted by Apoyo Consultoría that was recently highlighted by the head of Peru’s Ministry of Economy and Finance (MEF), Álex Contreras.

The MEF expects numbers to indicate a recovery in the third and fourth quarters of 2023. The Peruvian economy shows signs of improvement going forward. Apoyo Consultoría, Peru’s leading business consulting firm in economic, financial, and strategic matters, notes that its investment confidence indicator is at 17 points, the highest level since March 2019.

The same results are indicated with the 12-month economic expectations published by the Central Reserve Bank (BCR), the highest level in recent years,  Contreras stated.

The Perception of Investing in Peru

The Apoyo Consultoría survey showed that Peru is positioned to date as the most attractive destination for investments in the region in 2024, commented the minister.

He maintained that this improvement in the confidence index in the country is also verified on an international scale. This was confirmed during the recent meetings with businessmen from Spain.

He said that many companies ratified their confidence in investing in Peru. Among those that stand out are those in the transportation, infrastructure, and energy sectors. “Something also important is that Peru has received the commitment of multilateral entities, both European and non-European, to support the financing of green projects in Peru. These include water and sanitation projects.”

Álex Contreras explained that he will meet in New York with risk agencies, international investors, and multilateral organizations to promote more interest in investing in Peru.

“Investments are already materializing. The worst capital outflow in Peru’s history was stopped, and record projects were awarded under the modality of public-private partnerships that will begin to be built. In addition, new business investment projects worth 12.5 billion dollars were recently announced. He stated that Peru will continue with the work to regain confidence and develop further foreign direct investment,” he stated.

The present months are crucial because companies prepare budgets and decide the projects they will develop in 2024, Contreras added.

An international tour

Furthermore, Minister Contreras highlighted that the international investors he met with in the United States are confident in continuing activities aimed at investing in Peru.

He said that as part of the tour he carried out in the United States, accompanying the President of the Republic, Dina Boluarte, he met with international business groups to discuss opportunities for investment in Peru, and the response was quite positive.

“Companies in the mining, infrastructure, and telecommunications sectors are interested in investing in Peru.” Many American companies that opted to invest in  Peru expressed their confidence and positive view of Peru before President Boluarte and the group of ministers who accompanied her. Contreras confirms that good winds are blowing towards Peru.

He highlighted that the tour of the United States was “very fruitful” because it allowed government officials to contact investors, who are “global players, companies that have investments on an international scale.”

“This ratification of trust in investing in Peru will be reflected in more private investment, which the country wants most now. Twenty percent of private investment is foreign. That is why being here and involved in Peru’s economy is important,” he stated.

A chance to capture investment

The President of the Central Reserve Bank (BCR), Julio Velarde, maintained that Latin American countries can attract new investments to their economies due to the confrontation the United States and Europe have had with China commercially.

“Mexico, which has a significant industrial base and exports to the United States, and Costa Rica have benefited from this movement to ‘nearshore’ operations. However, no country in the region has taken full advantage of this enormous potential,” he stressed while participating in the Budget and General Account Commission of the Republic of Congress.

Additionally, he warned of a possible impact of citizen insecurity on the atmosphere for foreign direct investment. “Some businessmen hesitate to send their families abroad and, because of security concerns, they invest less,” he commented. However, Peru’s Ministry of Economy and Finance recently announced that it will allocate more than 200 million soles (USD 54 million) to strengthen citizen security.

The benefits of investing in Peru

In 2024, investing in Peru will offer an unparalleled opportunity for forward-thinking companies seeking sustainable growth in a dynamic market landscape. Peru, endowed with rich natural resources including copper, gold, and silver, has positioned itself as a pivotal player in the global commodities market. Moreover, the country’s strategic location as a nexus between South American markets presents a gateway for companies aiming to capitalize on the continent’s burgeoning consumer base. Recent infrastructural advancements, such as expanding the transportation network and modernizing ports, have further enhanced Peru’s attractiveness for foreign investment. Furthermore, Peru’s commitment to economic reforms, fostering a conducive business environment, and promoting innovation through public-private partnerships underscores its dedication to fostering long-term economic stability and growth. By leveraging Peru’s unique advantages and aligning with its progressive policies, companies stand to benefit from enhanced market access, operational efficiencies, and robust returns on investment. In essence, Peru emerges as a pole of opportunity, offering foreign direct investors a strategic advantage in navigating the complexities of the global economy and securing a prosperous future.

The economy of the Dominican Republic has experienced significant economic growth over the past few decades, primarily driven by various industries and a diversified export base. This overview delves into the primary industries, the goods and services they produce, and the characteristics of the workforce, along with the country’s export profile and primary trade partners.

Main Industries and Their Products

Tourism

Description: The Dominican Republic boasts some of the Caribbean’s most popular tourist destinations, including Punta Cana and Puerto Plata. Tourism plays a pivotal role in the nation’s economy.

Goods and Services Produced: Hotels, resorts, restaurants, recreational activities, and related services are the primary outputs. The country also offers cultural and eco-tourism experiences. Below are some of the main tourist attractions in the country:

• Punta Cana & Bávaro: Located on the easternmost tip of the Dominican Republic, this area is famous for its pristine beaches, luxury resorts, and world-class golf courses.
• Santo Domingo: As the capital city, Santo Domingo is a blend of historical and modern attractions. The Zona Colonial, a UNESCO World Heritage site, features colonial-era buildings, the first cathedral in the New World, and the Alcázar de Colón, the former residence of Christopher Columbus’s son.
• Samana Peninsula: Known for its picturesque landscapes, waterfalls like El Limón, and the annual whale-watching season when humpback whales migrate to the area.
• Puerto Plata: Offers visitors a mix of beaches, the historic Fortaleza San Felipe, and the nearby Mount Isabel de Torres, accessible by a cable car, offering panoramic views.
• La Romana & Casa de Campo: This region is home to luxury resorts, the Altos de Chavón artists’ village, and the beautiful Isla Catalina.
• Jarabacoa & Constanza: Ideal for nature lovers, known for their mountainous landscapes, waterfalls, and opportunities for hiking, rafting, and birdwatching.
• Las Terrenas & Las Galeras: Coastal towns with beautiful beaches, water activities, and a laid-back atmosphere.

Contribution of Tourism to the GDP:

Tourism is a cornerstone of the economy of the Dominican Republic. While the exact percentage can vary slightly from year to year based on various factors, as of 2022, tourism contributed around 17-20% to the country’s GDP. This figure underscores the sector’s significance in driving economic growth, creating jobs, and fostering development across various industries, from hospitality and transport to entertainment and retail.

Agriculture

Description: Historically, agriculture was the backbone of the Dominican economy. While its relative contribution has diminished, it remains a significant sector.

Goods Produced: Sugar, coffee, cocoa, tobacco, bananas, and tropical fruits are the primary agricultural products.

As of 2022, the main countries importing agricultural products from the Dominican Republic include:

• United States: Given its proximity and historical ties, the U.S. is a significant market for Dominican agricultural exports. Products like organic bananas, cocoa, and coffee find substantial demand in the U.S. market.
• European Union: Countries within the EU, such as Spain, Germany, and the Netherlands, are vital markets for Dominican agricultural products, mainly organic cocoa and coffee.
• Haiti: The neighboring country is a notable importer of Dominican agricultural products, including rice, poultry, and dairy products.
• Other Caribbean Nations: Countries within the Caribbean region also import a range of Dominican agricultural goods, benefiting from regional trade agreements and proximity.

Contribution of Agriculture to GDP

As for the agricultural sector’s contribution to the Dominican Republic’s economy, while the exact percentage can fluctuate based on yearly performance and other economic factors, historically, the farm sector has contributed around 6-8% to the country’s GDP. However, it’s essential to note that while the percentage might seem modest compared to other sectors like tourism or manufacturing, agriculture plays a crucial role in employment, rural development, and food security in the Dominican.

Manufacturing

The Dominican Republic has attracted many foreign manufacturers, particularly in export-oriented industries, thanks to its strategic location, preferential trade agreements, and relatively skilled labor force. Some of the leading foreign manufacturers operating in the country produce:

• Textiles and Apparel: Numerous international clothing brands and manufacturers have set up operations in the Dominican Republic to take advantage of the country’s proximity to major markets like the United States and the European Union. Companies like Gildan Activewear, VF Corporation, and HanesBrands have significant operations in the country.
• Electronics: The electronics manufacturing sector has grown, with companies producing items such as televisions, components, and other electronic goods for export.
• Medical Devices and Pharmaceuticals: The country has become a hub for medical device manufacturing, with several multinational companies establishing production facilities. Additionally, pharmaceutical manufacturing, especially generic drugs, has also seen growth.
• Automotive and Components: Some international automotive companies and suppliers have established operations in the Dominican Republic, producing parts and components for the global market.
• Footwear and Leather Goods: Several international footwear brands and manufacturers have set up production units, capitalizing on the country’s skilled workforce and favorable trade agreements.

Contribution of Manufacturing to GDP

The manufacturing sector has experienced significant growth over the years and has become a principal contributor to the economy of the Dominican Republic. Both domestic and foreign investment drives it. As for its contribution to the country’s GDP, while the exact percentage can vary based on economic conditions and other factors, the manufacturing sector has historically accounted for approximately 16-19% of the Dominican Republic’s GDP. This figure underscores the importance of manufacturing in the country’s economic landscape, generating employment, promoting exports, and fostering industrial development.

Mining

Description: The Dominican Republic possesses significant mineral resources, with gold being the most notable.

Goods Produced: Gold, silver, nickel, and other minerals. Some of the major mining companies operating in the Dominican Republic include:

• Barrick Gold Corporation: One of the world’s largest gold mining companies, Barrick Gold has a significant presence in the Dominican Republic through its Pueblo Viejo mine, one of the largest gold mines in the Americas. The mine is a joint venture between Barrick (60%) and Newmont Corporation (40%).
• GoldQuest Mining Corp.: A Canadian-based company involved in exploration and development activities in the Dominican Republic, primarily focusing on its Romero gold-copper project.
• Precipitate Gold Corporation: Another Canadian exploration company with projects in the Dominican Republic, including the Pueblo Grande project.
• Unigold Inc.: A Canadian exploration company focusing on its Neita property in the Dominican Republic, which has significant gold and copper potential.
• Hemisphere Energy Corporation: This company has exploration projects in the Dominican Republic, including the Cerro de Maimón copper-gold-silver mine.

Contribution of Mining to GDP

In terms of its contribution to the overall GDP of the economy of the Dominican Republic, the mining sector, including gold and other minerals, has historically represented a smaller percentage compared to sectors like tourism, manufacturing, and agriculture. Its contribution is typically 1-2% of the country’s GDP.

Characteristics of the Workforce

The Dominican workforce is diverse, with a mix of skilled, semi-skilled, and unskilled labor. A significant portion of the labor force is employed in the service sector, especially in tourism-related activities. However, the manufacturing and agricultural sectors also employ many workers. The workforce is relatively young, with a significant portion of the population below 30. While Spanish is the official language, English proficiency is growing, especially among the younger generation.

Exports and Trade Partners

The Dominican Republic has a diversified export base, with the United States being its primary trading partner. The main customers for Dominican Republic exports include:

United States: The U.S. is the Dominican Republic’s largest trading partner, absorbing a considerable portion of its exports, especially textiles, apparel, and agricultural products.

European Union: EU countries, particularly Spain and the Netherlands, are significant markets for Dominican exports, including agricultural products and manufactured goods.

Neighboring Caribbean Countries: Countries within the Caribbean region also serve as essential markets for Dominican products, especially in tourism.

The economy of the Dominican Republic has evolved over the years, with a shift from traditional sectors like agriculture to more diversified industries such as tourism and manufacturing. While challenges remain, including infrastructure, education, and income inequality, the country’s economic trajectory remains positive. With continued investment in critical sectors and a focus on sustainable development, the Dominican Republic is poised to strengthen its position in the global economy further.