The DR has only been surpassed in productivity by Panama and Costa Rica.
Santiago, Chile—The Dominican Republic’s labor productivity growth is only surpassed by that of Panama and Costa Rica.
In labor productivity, calculated by dividing Gross Domestic Product (GDP) by the number of hours worked, the Dominican Republic is among the highest performers in Latin America and the Caribbean.
According to an Economic Commission for Latin America and the Caribbean (ECLAC) report, the Dominican Republic’s labor productivity growth was over 50% between 2005 and 2024, surpassed only by the productivity growth of Panama and Costa Rica. Panama’s productivity growth has been astonishing: it grew by 151% in the period.
Costa Rica’s labor productivity also increased by over 50%, and the rest of the countries were divided between those with moderate productivity growth and those with low productivity growth.
Among the countries with moderate labor productivity growth are Paraguay (49%), Bolivia (48%), Colombia (46%), Cuba (42%), and Chile (35%), while in the group with low productivity growth are Honduras (5%), Ecuador (5%), Mexico (11%), Jamaica (14%), El Salvador (15%), Argentina (15%), Brazil (17%), Trinidad and Tobago (18%) and Guatemala (23%). Venezuela experienced a 52% decline in productivity.
To illustrate what happened to productivity in the region, an indicator that measures the efficiency and performance of the economy, the ECLAC report comments that “while in 2005 the productivity of countries in the region that could be considered high-income countries was US$25 per hour worked and that of medium-low income countries was US$5 per hour worked, in 2024 this productivity is US$34.4 per hour worked and US$6.5 per hour worked, respectively”.
The findings of this report reaffirm the content of another report that the Economic Commission for Latin America (ECLAC) published in December 2022, which classified the countries of the region among those whose average labor productivity grew more than that of the United States (Brazil, Costa Rica, Dominican Republic and Chile), those whose average labor productivity grew at a slower rate than that of the United States, but with a closing of the gap (Peru, Bolivia and Colombia), and those whose average productivity did not grow, or grew at a rate that further widened the gap separating them from the United States (Mexico, Venezuela, Uruguay, Guatemala, Paraguay).
Among the factors that have contributed to the increase in productivity in the Dominican Republic are political stability, its enviable geographical location, its robust infrastructure (especially in ports, airports, and road networks), the high flow of foreign investment, its institutional advances, changes in the tax structure (less dependent on taxes on foreign trade), and technological transformation.
However, much remains to be done, especially in implementing reforms to facilitate the business climate further and continue strengthening human capital, creating an ecosystem that promotes innovation and research in the country.
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Publish date : 2024-09-14 03:33:00
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