Capital flight from Venezuela comes to Dominican market
Diario Libre
SANTO DOMINGO.- In the middle of the political conflict surrounding the administration of President Hugo Chaves, the investments of Venezuelan capital in the Dominican Republic registered a big increase during 2010, when the amount reached US$140.4 million, according to the Central Bank information.
That number is more than 50% of the accumulated investment from that country on Dominican soil over the last 10 years, which totaled US$264,1 million, and represent an increase of US$109.3 million with respect to 2009 which was US$31.3 million.
This interest of the Venezuelan businessmen to invest in the Dominican Republic forms par, in the judgment of some economists of a need to invest in businesses outside of Venezuela, due to the political situation generated by the measures adopted by Chavez.
Nevertheless, among business from that country consulted by Diario Libre, the reasons are not more than the need to expand their businesses and to take advantage of the favorable conditions that the Dominican market offers.
For the economist Bernardo Vega, we are dealing with capital flight that includes other countries and he cites the case of the big investments by Venezuelan businessmen in the real estate sector in Florida, in the United States.
Vega bases his statement on the fact that they are businessmen that are arriving alone since they do not know the programs of the Dominican government or those of the national private sector, that are aimed at attracting investments in the country.
"The Dominican government has not sent a mission to Caracas to promote investment in the Dominican Republic and neither has the private sector, which is different from the United States government and Europe. This capital has simply been arriving," he stressed.
Marcos de la Rosa, the president of the Dominican Association of Foreign Investment Companies (ASIEX) agreed as well in that the private investment is leaving Venezuela and looking for new destinations, although he says that he does not know the reasons. As an example of this, he refers to the report of the Economic Commission for Latin America and the Caribbean (CEPAL) regarding Direct Foreign Investment (IED) during 2010, in which Venezuela is the only country with negative numbers in the entire region.
According to the report of Cepal, Latin America and the Caribbean was the region, in the whole world, where the percentage of reception of foreign investments grew the most, totaling US$112.6 billion, 40% more than in 2009. Of this amount, 56% (some US$85.1 billion) was received by South America, with the most favored countries Brazil, Chile and Peru, besides Colombia and Argentina that experienced an increase. Nonetheless, Venezuela presents a negative result of -US$1.404 billion, which according to CEPAL, "shows a strategy in which the IED is not the central axis of development and the nationalization of foreign assets is a relative phenomena."
De la Rosa insists that "the truth is that I do not know what the reasons are, but when one sees that number, it seems that private capital is taking the decision to leave Venezuela, for some reason. Perhaps it does not find the environment adequate for investment".
Over the last few years, the government of Hugo Chavez has implemented a policy of nationalization of companies, among which the CEPAL cites the United States glass maker Owens Corning.
Las May, several newspapers from Spain published the complaint from the Federation of Spanish Centers in Venezuela (FECEVI) that the expropriations by Chavez had ruined some 500 Spanish businessmen.
The attractiveness of the DR
Alfredo Ignacio Vargas Salas, the corporate director of the Multi Bank of Las Americas (Banamerica) and Juan Casanova, the director of Group Vtres, agree with the president of ASEIX in pointing out the favorable conditions of the Dominican market for investments.
"The growth of the economy over the last five years which has been the highest in all of the Caribbean and Central America; the geographic location is very strategic, at 1 hours and 15 minutes from Venezuela and 2 hours from the United States. The free trade agreement makes the possibility of installing some type of local production for a future or possible export feasible, besides the political and economic stability and the language. Plus the relations that exist in both countries for many years, make the Venezuelan want to invest in this country," commented Vargas Salas.
The young businessman, together with Casanova, heads the Alliance of Venezuelans in the Dominican Republic, which is aimed at offering guidance and support to those businessmen and professionals from Venezuela who arrive in the country.
This agency, just a couple of months old, already has 150 members, people that, according to what Casanova says, have faith in Venezuela and in some cases maintain businesses there, but have wanted to take advantage of the business opportunities in another country.
In the specific case of Banamerica, Vargas Salas indicates that they arrived in Santo Domingo motivated by the chance to grow in the sector. He reminded the reporters that the access to banking services in this country is very low, with less than 30% (of the population) using bank services, which give them an opportunity to expand, and moreover with the new regulations the financial system is very healthy and trustworthy, which makes people tranquil.
He said that Banamerica, (which employs 175 people, only two Venezuelans, according to what he says)is a long range project, and that they came two years ago to continue to grow and contribute to the national development.
Regarding the areas of interest for investments, both businessmen stressed the financial sector, real estate, tourism, and construction, although they also warn of a large participation of Venezuelan investments in the areas of medicine and foodstuffs.
That number is more than 50% of the accumulated investment from that country on Dominican soil over the last 10 years, which totaled US$264,1 million, and represent an increase of US$109.3 million with respect to 2009 which was US$31.3 million.
This interest of the Venezuelan businessmen to invest in the Dominican Republic forms par, in the judgment of some economists of a need to invest in businesses outside of Venezuela, due to the political situation generated by the measures adopted by Chavez.
Nevertheless, among business from that country consulted by Diario Libre, the reasons are not more than the need to expand their businesses and to take advantage of the favorable conditions that the Dominican market offers.
For the economist Bernardo Vega, we are dealing with capital flight that includes other countries and he cites the case of the big investments by Venezuelan businessmen in the real estate sector in Florida, in the United States.
Vega bases his statement on the fact that they are businessmen that are arriving alone since they do not know the programs of the Dominican government or those of the national private sector, that are aimed at attracting investments in the country.
"The Dominican government has not sent a mission to Caracas to promote investment in the Dominican Republic and neither has the private sector, which is different from the United States government and Europe. This capital has simply been arriving," he stressed.
Marcos de la Rosa, the president of the Dominican Association of Foreign Investment Companies (ASIEX) agreed as well in that the private investment is leaving Venezuela and looking for new destinations, although he says that he does not know the reasons. As an example of this, he refers to the report of the Economic Commission for Latin America and the Caribbean (CEPAL) regarding Direct Foreign Investment (IED) during 2010, in which Venezuela is the only country with negative numbers in the entire region.
According to the report of Cepal, Latin America and the Caribbean was the region, in the whole world, where the percentage of reception of foreign investments grew the most, totaling US$112.6 billion, 40% more than in 2009. Of this amount, 56% (some US$85.1 billion) was received by South America, with the most favored countries Brazil, Chile and Peru, besides Colombia and Argentina that experienced an increase. Nonetheless, Venezuela presents a negative result of -US$1.404 billion, which according to CEPAL, "shows a strategy in which the IED is not the central axis of development and the nationalization of foreign assets is a relative phenomena."
De la Rosa insists that "the truth is that I do not know what the reasons are, but when one sees that number, it seems that private capital is taking the decision to leave Venezuela, for some reason. Perhaps it does not find the environment adequate for investment".
Over the last few years, the government of Hugo Chavez has implemented a policy of nationalization of companies, among which the CEPAL cites the United States glass maker Owens Corning.
Las May, several newspapers from Spain published the complaint from the Federation of Spanish Centers in Venezuela (FECEVI) that the expropriations by Chavez had ruined some 500 Spanish businessmen.
The attractiveness of the DR
Alfredo Ignacio Vargas Salas, the corporate director of the Multi Bank of Las Americas (Banamerica) and Juan Casanova, the director of Group Vtres, agree with the president of ASEIX in pointing out the favorable conditions of the Dominican market for investments.
"The growth of the economy over the last five years which has been the highest in all of the Caribbean and Central America; the geographic location is very strategic, at 1 hours and 15 minutes from Venezuela and 2 hours from the United States. The free trade agreement makes the possibility of installing some type of local production for a future or possible export feasible, besides the political and economic stability and the language. Plus the relations that exist in both countries for many years, make the Venezuelan want to invest in this country," commented Vargas Salas.
The young businessman, together with Casanova, heads the Alliance of Venezuelans in the Dominican Republic, which is aimed at offering guidance and support to those businessmen and professionals from Venezuela who arrive in the country.
This agency, just a couple of months old, already has 150 members, people that, according to what Casanova says, have faith in Venezuela and in some cases maintain businesses there, but have wanted to take advantage of the business opportunities in another country.
In the specific case of Banamerica, Vargas Salas indicates that they arrived in Santo Domingo motivated by the chance to grow in the sector. He reminded the reporters that the access to banking services in this country is very low, with less than 30% (of the population) using bank services, which give them an opportunity to expand, and moreover with the new regulations the financial system is very healthy and trustworthy, which makes people tranquil.
He said that Banamerica, (which employs 175 people, only two Venezuelans, according to what he says)is a long range project, and that they came two years ago to continue to grow and contribute to the national development.
Regarding the areas of interest for investments, both businessmen stressed the financial sector, real estate, tourism, and construction, although they also warn of a large participation of Venezuelan investments in the areas of medicine and foodstuffs.
Diario Libre
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