This would be the economic impact of closing the border with Haiti, experts say

Historically, the commercial exchange between the Dominican Republic and Haiti has been one of the most important if compared to other countries in the region. An example is that, towards the neighboring nation, exports represented US$206.81 million until 2020, according to data from the General Directorate of Customs. By the end of 2021, the increase was US$184.9 million, keeping that country in third place after the United States and India as the leading destinations for Dominican products.

Based on this context, experts in the field consider that the decision of the Dominican Republic to close its land, air, and maritime border with Haiti as of this Friday at 6:00 a.m. could represent a boomerang that will economically affect this side of the island. At present, the trade that crosses between the two nations represents some US$880 million, a figure that decreased, unlike about ten years ago, due to the political, social, insecurity, and economic characteristics that Haitians live.

“Evidently, the Dominican Republic has a favorable exchange, because we export to Haiti almost 800 million dollars, and we only import about 32 million dollars. This means that Haiti is one of the few countries with which we have a positive trade balance. This has an impact: the four big trade blocks, Dajabón, Elías Piña, Jimaní and Pedernales, in addition to the informal cross-border trade. The Government will have to subsidize many producers, too. Only the poultry sector, eggs, chickens, basically Haiti buys them from here, and there is an involuntary business there”, explained the dean of the Faculty of Economic and Social Sciences FCES of the Autonomous University of Santo Domingo (UASD), Antonio Ciriaco.

This position was seconded by Guillermo Caram, an economist and former governor of the Central Bank, who considered that the decision to close the border crossing should be taken into account, not only in economic terms but also at a social level. “The authorities should look for more effective pressure mechanisms without the need to take such drastic measures,” he said.

For his part, economist Haivanjoe Ng Cortiñas said: “With the total closure of the Dominican/Haitian border, the daily negative impact is US$ 4.0 million on the exports side of the country and US$ 4.4 million in the daily value of bilateral trade. The closing of the border will represent a setback for the commercial and productive activity for each country, with Dominican producers and traders being harmed and on the Haitian side the consumers and traders”.

According to Ng Cortiñas, this considers that in the last five years, the commercial flow between the economies of the Dominican Republic and Haiti grew by 25.0%, of which exports from Dominican soil represent 92.0%.

On Thursday, President Luis Abinader announced that the border with Haiti would be closed this Friday after two days of talks between the two governments to seek solutions to the crisis by constructing an irrigation canal on the bordering Masacre River.

Last Monday, the Dominican National Security Council agreed on other measures such as the definitive suspension of entry of “all those involved in the conflict,” the rest of the issuance of visas to Haitian citizens until further notice, the reactivation of a canal which has not been functioning since 2007-2008 to guarantee the supply of water to Dominican producers and farmers, and the beginning of the process of construction of a dam as a long-term solution.