The construction sector was one of the most dynamic in 2021, with growth exceeding 20%, but that growth rate could be decimated in 2022 by the tightening of monetary policy, so it is necessary to focus resources to finance micro, small and medium-sized builders.
This proposal was made by Eliseo Cristopher, president; Frank Guerrero, VP; Eduard Del Villar, Economic and Trust advisor, and Wilson Guerrero, director of Communications of the Dominican Confederation of Small and Medium Construction Companies (Copymecon), during their participation as guests at the Encuentro
Economic Encounter of HOY
The directors of Copymecon indicated that factors such as low interest rates, the confidence generated by the Government in the productive sectors and the increase in the arrival of remittances to the country were key for the construction sector to register an important growth last year.
However, they expressed that 2022 generates some uncertainty, due to the fact that the Central Bank of the Dominican Republic (BCRD) started to take restrictive measures in order to curb inflation.
They recalled that in 2020 the BRCD implemented a program that included the liquidity window mechanism for tourism, construction, manufacturing and exports with resources of RD$20 billion.
In this regard, they stated the need for the monetary authorities to maintain a focused policy, so that the construction sector can continue to maintain an important participation in the country’s economic growth.
In addition to creating the conditions for these resources to reach the micro, small and medium-sized construction companies and not remain only in the hands of two or three large construction companies.
The president of Copymecon, Eliseo Cristopher, said that in recent years the Central Bank has released a significant amount of funds from the legal reserve, but he emphasized that micro, small and medium-sized construction companies have not had access to these funds.
For this reason, he advocated the creation of mechanisms that would allow these resources to reach the construction MSMEs.
He acknowledged that there is a lot of informality in the sector, and that is why a comprehensive formalization plan must be created, which will allow a greater contribution of resources to the Gross Domestic Product (GDP), as well as the creation of more formal jobs.
Regrets the non-application of Law 189-11
The Dominican Confederation of Small and Medium Construction Companies (Copymecon) regretted that Law 189-11, which regulates the construction of affordable housing with workers’ pension funds, through trusts, is not being applied.
He understands that this initiative would provide the opportunity for small homebuilders to have access via trusts to pension funds, which would further develop the real estate market in the country.
He recalled that the idea was that the trust would serve as leverage to be able to access pension funds.
He pointed out that Law 87-01, which creates the Dominican Social Security System (SDSS), also establishes this, while Law 189-11 for the Development of the Mortgage Market and the Trust in the Dominican Republic includes it.