Free zones ask for emergency measures

[NewsWhore]

The Association of Dominican Free Zones (Adozona) publishes a large advertisement in all today's papers. In it, the association basically says that unless emergency measures are taken, there will be a catastrophic breakdown of the entire free zone system. One of the first suggestions is for the country to enter into the DR-CAFTA agreement without further delay. Another is for the exchange rate to be relaxed. All companies operating under the aegis of the free zone model are also asking for a reduction in energy costs. The press release says that internal costs in dollars have increased and some aspects of the labor market are too rigid for them to be able to compete in the international markets. The free zones also have the same complaint as the petroleum companies: there is too little freedom in choosing transport of merchandise from the factories to the ports. For these companies, which formerly employed over 150,000 men and women, neither the government nor the nation has any provisions or plans to alleviate the plight of the tens of thousands of workers now faced with unemployment. The Adozona note rejected President Fernandez's comment that the free zone model was "worn out" and declares that the sector can still provide great opportunities for the country. The note says that this is not rhetoric. Adozona says that there is an urgent need to remedy the damage already caused by the government's inactivity or disdain, and prevent further closures. One of the major factories closed down last Friday, dismissing thousands of workers. Besides the country's immediate entry into DR-CAFTA and relaxing the exchange rate, the associates want the government to seriously consider the other points on the agenda that has been on the table for several months. Business leader Felix M. Garcia told reporters from El Caribe that "without the treaty, there is no more free zone sector." The president of the Santiago Development Association was quite explicit on two important points. The first was the customary annual dismissal of the entire workforce at each factory, which is not covered under any of the current labor laws, but which forces the factory to keep a massive amount of capital in reserve. This does not just lead to the loss of the use of the reserve fund, but labor courts are obliging employers to pay severance packages for the entire time an employee worked for the factory, in spite of the fact that each December the employee received a yearly severance package! Garcia called on the government to sponsor a case all the way to the Supreme Court to see if this contradictory situation can be cleared up. The second issue is the use of the dollars that the free zone companies receive for their work. Under current controls, this money cannot be sold on the open exchange market, and they are forced to sell them at below-market prices. However, the same companies are forced to purchase dollars at an above-market price, and this is yet another contradiction that needs to be dealt with by the authorities.

More... (http://www.dr1.com/index.html#7)