Attacks on Law 28-01 stymie investors

[NewsWhore]

Of the 134 business ventures that were approved by the Coordinating Commission for the Special Frontier Development Zone (CCDF) after the passage of law 28-01, only 36 have actually set up their industries. This has led to an investment of US$140 million and generated 4,500 new jobs. The speed with which businesses were supposed to be installed was much reduced as efforts to change the law became more and more strident. Part of the problem is that some industries, alluding to protection under Law 28-01 have begun operations illegally. On the other hand, pressure groups from powerful business groups in Santo Domingo have opposed the development of the frontier region, seeing such an event as unfair competition. As a result, they have lobbied to have the law repealed. One of the more successful ventures, San Miguel del Caribe, a soft drink manufacturer, was closed for 10 days for non-payment of ITBIS, which was covered under the original law. Due to the legal uncertainty surrounding the law's application, many companies have held off their investments. Most of the population in the seven affected provinces is totally in favor of the law and the installation of new industries. In Santiago Rodriguez alone, the soft drink firm had created 200 jobs and is, by far, the major private employer in the province. The success of companies such as San Miguel and Cementos Andinos demonstrates that the region, previously a focus for small-scale agriculture and cattle ranching, can support industries that bring innovative technologies to the area.

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