Dominica

Dominica

Dominica: Market Profile

1536049594364_486118Dominica1e_486118.jpg

 

 

  • Located about 1,400 miles south of Miami and halfway between the French islands of Guadeloupe and Martinique, Dominica is an island nation in the Eastern Caribbean. The country has seen its GDP double over the past two decades to reach US$0.6 billion in 2017. However, its exposure to frequent natural disasters such as flash floods and hurricanes can put its economic growth and development plans at risk. In September 2017, for example, Hurricane Maria caused about US$1.3 billion worth of damage to crops and the country’s physical infrastructure, such as road and power supply, bringing much of the country’s economic activity to a halt and impacting its economic growth.
  • Dubbed “The Nature Island of the Caribbean”, Dominica’s unique natural beauty has helped it become one of the region’s tourism hot spots. Its natural attractions include one of the largest boiling lakes in the world in the UNESCO World Heritage Site at Morne Trois Pitons National Park. With tourism becoming an increasingly important part of the country’s economy, the Dominican Government has increased its efforts to develop the sector, attracting investment in high-end boutique hotels, exclusive villas, eco resorts, health and wellness spas, marinas and attractions for stay-over, excursion and cruise passengers, such as green tourism featuring nature-related activities and experiences.
  • Another key driver of Dominica’s economy is agriculture, thanks largely to the fertile volcanic soils which are good for cultivating bananas and tropical fruits. In line with the country’s emphasis on attracting investment in sustainable and environmental-friendly manufacturing activities with employment and export-earning potential, the growth of the country’s agro-processing sector has been encouraged. This covers light manufacturing areas such as bulk and bottled water, brewing, seafood, beverages and juice, canned food and fruit processing, and herbal teas and natural medicines.
  • There is a growing demand for “near-shoring” relocation in Latin America among businesses looking to cater to the North America market. To take advantage of this, the Dominican Government has designated business processing outsourcing (BPO) as a key sector for further development on the island and strongly supports foreign investment in the sector with generous investment incentives. Situated at the centre of the Caribbean in the same time zone as the Eastern US, Dominica is increasingly becoming a location of choice for investment by the BPO industry.
  • As a member of the Eastern Caribbean Currency Union (ECCU), Dominica uses the Eastern Caribbean dollar as its official currency. Dominica benefits from a number of preferential trade agreements with countries such as Armenia, Australia, Canada, the Caribbean Community (CARICOM) members, the EU, Japan, Kazakhstan, New Zealand, Russia, Turkey and the US. For instance, under the Caribbean Basin Economic Recovery Act, the US offers duty-free treatment for Dominica-origin products.
  • Since 2013, sustainable and climate-resilient development has become one of Dominica’s leading priorities.  The country has facilitated foreign investment, for example, by offering incentives such as tax holidays of up to 15 years (20 years in the case of hotel and resort developments), waivers of import duty for machinery, equipment, spare parts, building materials, raw and packaging materials used for local manufacturing, processing and services, and no restrictions on the repatriation of earned profits. The Citizenship by Investment Programme is another ongoing initiative to attract foreign investment, particularly in the public projects and the real estate industry. More information on the investment environment and the relevant regulations or programmes can be found at the country’s investment promotion agency, Invest Dominica Authority.
  • Tunisia is part of the Greater Arab Free Trade Area (GAFTA) which entered into force in 1 January 1998 with 16 other member countries including Egypt, Morocco, Libya, Saudi Arabia and UAE. The GAFTA aims to facilitate inter-trade between countries and achieve economic integration in the region. Tunisia is also a member of the World Trade Organization (WTO) and has signed a Trade and Investment Framework Agreement with the US.
  • Tunisia was the first country in North Africa to sign as an associate member with the EU and its trade profile is heavily oriented towards the EU, which accounted for 77% of Tunisia’s exports and 72% of its imports in 2016. France is the most important trading partner, followed by Italy, Germany and Spain. Tunisia and EU are currently negotiating for a Deep and Comprehensive Free Trade Area (DCFTA) to support Tunisia’s ongoing reforms by creating trade and investment opportunities.
  • China had a long history of bilateral relationship with Tunisia, although largely were unreported. The first trade deal was signed back in 1958 between the two countries, making Tunisia one of the first Arab countries to establish diplomatic ties with China.
  • Tunisia has signed agreement with China in July this year on its adhesion to the Belt and Road Initiative, looking to open economic cooperation in trade and investments between the two countries and curb the high youth unemployment. Given Tunisia’s close and long-established relationship with Europe, China is increasingly looking to Tunisia to serve as an ideal middleman for market expansion to Europe.
  • A partnership agreement on digital economy infrastructure development was signed between Tunisia and China, offering opportunities in areas such as e-commerce, telecommunications and network computing. China are also working with Tunisia in the field of satellite navigation by setting up its first overseas centre of BeiDou Navigation Satellite System (BDS) in the country which helps to boost technological advancement and further develop digital economy in the Arab countries.
  • In 2016, cumulative FDI in Tunisia amounted US$29 billion, according to UNCTAD. In the same year, China’s total FDI in Tunisia reached US$16.3 million.