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                                                                                                    August 2012



                         PPIAF Assistance in the Dominican Republic
The Dominican Republic is a nation on the island of Hispaniola, part of the Greater Antilles archipelago in
the Caribbean region. The Dominican Republic is currently the second largest Caribbean nation
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(after Cuba) by both area and population, with 48,442 km and an estimated 10 million people. The
Dominican Republic has the ninth largest economy in Latin America and the second largest economy in
the Caribbean and Central American region.

Technical Assistance for the Dominican Republic’s Public-Private Partnership Enabling
Environment

In 2000 the Dominican Republic was the fastest growing country in Latin America and the Caribbean.
This growth was fueled largely by tourism, construction, telecommunications investments, and free trade
zone exports. Yet the country faced the challenge of increasing the efficiency of a large share of its
domestic economy, which was not growing and operated in one of the worst business environments in
the hemisphere.

Improving the low coverage and operational efficiency of the country’s infrastructure sectors—especially
transportation, logistics, power, and water and sanitation—was vital to increasing economy-wide
competitiveness, sustaining growth, and ensuring wider distribution of the benefits of growth. The
government had embarked on a series of private participation in infrastructure initiatives since 1992 to
support that effort, but much remained to be done in developing an appropriate regulatory framework,
improving governance, mitigating risk, and enhancing infrastructure performance across the board. A
holistic view of the legal, regulatory, and institutional framework was vital to solidify the reform and build
on previous achievements.

The government wished to enhance the country’s policy and regulatory environment for infrastructure. In
the medium-term, this would imply increased private participation in service provision and result in
improved access to infrastructure services. Thus PPIAF funding was requested in 2000 to support the
development of an integrated strategy for reform in the Dominican Republic’s infrastructure sectors in the
hopes of enhancing infrastructure efficiency and coverage; improving the environment for private
provision of infrastructure services; and raising the country’s economic competitiveness.

The resulting Country Framework Report consisted of: i) an assessment of the post-liberalization
performance of the different infrastructure sectors in terms of efficiency, access, competitiveness, and the
environment for private participation; ii) a determination of the regulatory, legal, financial, and institutional
barriers that have led to poor performance and that impede private participation in infrastructure; iii) an
assessment of the impact of poor infrastructure performance on growth, international competitiveness,
and poverty; iv) a synthesis piece bringing together common themes in regulatory reform and presenting
overarching issues of competition policy and utility regulation in the infrastructure sectors; and v) policy
recommendations and an action plan for government consideration.

The main value-added of this Country Framework Report was the integrated, cross-sectoral view that was
provided of legal and regulatory priorities for attracting private participation in infrastructure, ensuring
access to the poor, and improving the efficiency of infrastructure. The report provided the government
with a strategy and blueprint of actions to be taken regarding regulatory reform in the various
infrastructure sectors. It also served as a natural forum for bringing together policymakers, users, utility
officials and regulators, as well as members of the private and financial sectors in the Dominican Republic
and the world. As such, the discussions around the report helped build a public consensus among these
players on the need for reform and the specific actions to be taken in this regard in the short term.

The Dominican Republic has made progress with attracting private sector participation in its infrastructure
sectors by opening the telecommunications monopoly to competition, unbundling the electricity sector,
and awarding an airport concession.




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     Results of PPIAF’s Activities for the Dominican Republic’s PPP Enabling Environment

Category                          Outputs
Enabling environment reform
                                     Private Participation in Infrastructure—Country Framework
Analyses/assessments prepared
                                      Report, March 2003
Capacity and awareness building
                                     Consultation workshop for dissemination and consensus
                                      building among the different stakeholders, which include
Workshops/seminars
                                      government officials, private sector representatives, and
                                      potential investors, 2003


Category                        Outcomes
Capacity and awareness building
                                     Consensus achieved on moving forward with the
                                      recommendations in the Country Framework Report, including
Consensus achieved
                                      the need for reform and the specific actions to be taken in this
                                      regard in the short term, 2003




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