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DE RUEHDG #0027/01 0222252
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O R 222252Z JAN 10
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0607
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHMFIUU/CDR USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 000027 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL ETRD EINV HA DR
SUBJECT: DOMINICAN GOVERNMENT SEES ECONOMIC THREATS AND OPPORTUNITIES 
IN HAITI CRISIS 
 
REF: SANTO DOMINGO 23 
 
¶1.  In a 01/22/10 meeting with Charge and Emboffs, Eddy Martinez, 
Executive Director (with ministerial rank) of the Dominican Export 
and Investment Center (CEI-DR), explained that the Government of 
the Dominican Republic (GoDR) is concerned the Haitian earthquake 
and its aftermath will adversely affect Dominican companies that 
relied on exports to that country, while at the same time 
recognizing that the Haiti relief and reconstruction effort 
provides export opportunities for Dominican firms, as well as the 
possibility of promoting economic integration on the island of 
Hispaniola that would boost economic growth and sustainable 
development in both countries.  Martinez led Emboffs on a tour of 
CEI-DR's exhibition center showcasing Dominican products that 
address emergency needs in Haiti, put in a plea for expanding the 
HOPE program from Haiti to the DR, handed over two reports on 
Dominican exports to Haiti and the effect the earthquake has had on 
this sector, and provided points of contact for American firms and 
NGOs looking to purchase relief supplies in the DR for distribution 
in Haiti. 
 
¶2.  Martinez was present at the beginning of Charge's 01/20/10 
meeting with Foreign Minister Carlos Morales (Reftel), where he 
expressed the GoDR's concern that Dominican companies that have 
relied on the Haitian market will be severely adversely affected by 
the Haitian earthquake and its aftermath.  Many Dominican firms 
have lost their Haitian customers, he explained,  either through 
the destruction of the latters' stores and warehouses, or through 
their deaths.  There is also the fear, Martinez added, that the 
enormous influx of humanitarian assistance will displace Dominican 
exports to Haiti for an extended period of time.  He asked Charge 
to visit CEI-DR's Haiti Relief Export Center to view its operations 
and receive a more detailed briefing. 
 
 
 
¶3.  Charge, accompanied by Pol-Econ Counselor, Agricultural Attache 
and USAID Economist, met with Martinez and CEI-DR New Business 
Manager Sofia Ortiz on 01/22.  Martinez provided Emboffs with a 
study on border commerce and another on the impact of the 
earthquake on DR-Haiti commerce.  According to Martinez: 
 
 
 
n  Exports from the DR to Haiti totaled USD 647.3 million in 2009, 
an increase of 14.5 percent over the previous year; 
 
n  Most of the formal exports went through the southern border 
crossing at Jimani (USD 152.3 million in 2009) to Port au Prince; 
 
n  These exports have "virtually disappeared" since the earthquake, 
as the major retail businesses in the Haitian capital were 
destroyed ; 
 
n  Informal exports in the border towns of Pedernales and Elias 
Pina (USD 25.5 million in 2009) have fallen 15-30 percent since the 
earthquake; 
 
n  On the other hand, the market in Dajabon in the north (the least 
affected part of Haiti) has operated normally; 
 
n  The decrease in trade with Haiti is negatively affecting many 
Dominican businesses, particularly small- and medium-enterprises 
for whom Haiti was their major if not sole export market; 
 
n  The GoDR fears that many of these companies may go bankrupt 
unless a way can be found to renew their export trade to Haiti; 
 
n  There is also concern that donations for Haiti relief will 
displace Dominican exports, particularly as certain unnamed 
countries have informed the GoDR that their reconstruction projects 
will be carried out using materials imported from the donating 
country; 
 
n  CEI-DR is assisting Dominican companies by hosting in its 
exhibition hall a Haiti Relief Export Center, where Dominican 
companies can show their products that would contribute to relief 
and reconstruction efforts (fertilizer, medical supplies, plastic 
sheeting and storage, food products, pesticides, building 
materials, etc...); 
 
n  CEI-DR is encouraging international organizations, foreign 
embassies and NGOs to visit the Center to explore purchasing goods 
from Dominican suppliers for Haiti; 
 
n  Recent visitors have included the Inter-American Development 
Bank, the World Bank, UNICEF and representatives from actor Vin 
Diesel's foundation; 
 
n  Companies, organizations and NGOs interested in visiting the 
Center should contact either Sofia Ortiz or Patricia Fernandez at 
809-530-5505 and/or visit CEI-DR's website at www.cei-re.gov.do; 
and 
 
n  The GoDR is emphasizing to local manufacturers that they should 
look beyond making a quick buck on a few exports to Haiti now, and 
instead should look to charging minimal mark-ups in order to firmly 
establish themselves in the Haitian market, gain goodwill and 
demonstrate their competitiveness. 
 
 
 
¶4.    Looking beyond immediate measures for Haitian relief, 
Martinez described what the GoDR is doing and what it suggests the 
U.S. can do to promote long-term economic  growth and sustainable 
development in Haiti and the Dominican Republic: 
 
 
 
n  The Dominican Export Free Zone has generated some employment in 
Haiti; 
 
n  Expansion of the U.S. HOPE program for Haiti to the entire 
island of Hispaniola would accelerate this process and could lead 
to the creation of thousands of jobs in both countries, taking 
advantage of Haiti's unskilled labor pool and combining it with 
more skilled labor in the DR; 
 
n  Many Dominican companies are already basing some if not most of 
their manufacturing in Haiti (Note:  Grupo M, a textile 
manufacturer, does most of its production at a 4000 worker plant in 
northern Haiti, with the more-skilled finishing work performed at 
its factory in Santiago.  End Note); 
 
n  GoDR ministries are looking at revising the tax treatment for 
companies that export to Haiti, and 
 
n  (In response to a query from Emboffs) The GoDR could look at 
relaxing import tariffs on inputs for goods manufactured for export 
to Haiti; 
 
n  (In response to a question from Charge) The GoDR will also look 
at taking steps to encourage service exports to Haiti and explore 
setting up a similar export resource center to promote such exports 
and make their availability known to interested parties; and 
 
n  The GoDR will study the capacity of its industry to produce for 
the Haitian market. 
 
 
 
¶5.  COMMENT:  The GoDR is correct in seeing the Haiti earthquake as 
both a threat and an opportunity in economic terms.  The USG should 
take this into consideration both for the immediate political need 
to maintain the GoDR's impressive assistance to and cooperation 
with Haiti relief and rebuilding efforts, as well as the long-term 
economic integration and development of both countries.  Embassy 
will continue to engage Martinez and other GoDR officials on these 
issues.  With respect to the possible expansion of HOPE to the DR, 
Martinez was uncertain as to whether this would conflict with the 
terms of CAFTA-DR.  Guidance on this question from the Department 
would be appreciated.  END COMMENT. 
Lambert