SANTO DOMINGO.- The Dominican Republic is closely monitoring the escalation of international conflicts, which in recent weeks has focused global attention due to the military offensive by Israel and the United States against Iran, while the war between Russia and Ukraine persists, a conflict that continues to generate economic and commercial effects globally.
In an official statement yesterday, the Dominican Foreign Ministry condemned Iran's attacks against the Gulf States and expressed solidarity with the United Arab Emirates, Qatar, Saudi Arabia, Jordan, Bahrain, and Kuwait, without commenting on the offensive launched by Israel and the United States. This silence has been questioned, given that diplomatic stances in contexts of international tension directly influence the perception of stability and confidence for foreign investors.
Russia-Ukraine: a tangible impact on tourism and trade
The conflict between Russia and Ukraine continues to have direct economic repercussions in the Dominican Republic. According to an analysis by the Export and Investment Center (ProDominicana), the war has affected the flow of tourists from these countries. Each month, the Caribbean nation could lose 22,467 tourists from Russia and Ukraine, which translates to US$33.7 million in monthly tourism revenue. If the conflict lasts for six months, the losses could reach US$202.2 million.
On average, the Dominican Republic would lose US$1.12 million daily, equivalent to US$8.02 million weekly, especially affecting the hotel sector and the tourism services industry in areas such as Punta Cana, Bávaro, Miches and Puerto Plata.
ProDominicana reports that, based on 2021 figures, visits from Russia totaled 183,700 tourists and from Ukraine 85,912. With an estimated average expenditure of US$150 per tourist per night and an average stay of 10 nights, tourism revenue from these two countries reached US$404.4 million, with Russia accounting for 68.1% (US$275.5 million) and Ukraine the remaining 31.9% (US$128.85 million).
International trade and import costs
The impact is not limited to tourism. The Russia-Ukraine conflict has disrupted supply chains and increased transportation and raw material costs. Import freight rates from Europe have risen significantly, resulting in higher costs for goods and services for Dominican consumers.
Currently, Dominican exports to the European Union represent 8.4% of total exports, while exports to the European continent as a whole represent 17.5%. On the import side, the Dominican Republic receives 11.4% from the EU and 14.9% from Europe. These figures demonstrate the vulnerability of the local economy to global disruptions that alter trade and logistics flows.
Foreign investment and the real estate market
The conflict is also affecting the confidence of foreign investors. In the Dominican Republic, Russian and Ukrainian capital is present in strategic sectors such as real estate, free trade zones, and agribusiness. A prolonged conflict could slow down tourism and residential development projects, especially those aimed at international clients, and alter the perception of risk in a market that has established itself as attractive for foreign investment.
ProDominicana suggests that the country explore other markets to maintain foreign investment, taking advantage of agreements such as the EPA, which facilitate the placement of Dominican products in the European Union and can partially offset losses from Russia and Ukraine. Dominican rum and cigars, for example, face the risk of reduced demand due to the decline in tourism and trade to those countries.
Dominican tourism and resilience
Although global conflicts generate uncertainty, the Dominican Republic maintains competitive advantages: relative macroeconomic stability, an attractive legal framework for investors, and established tourist destinations. The challenge will be adapting to international volatility by diversifying markets and strengthening promotional strategies to ensure the continuity of tourism and investment flows, despite global tensions.
In this context, the interaction between geopolitics and economics is becoming increasingly evident. Decisions made by international powers, from the invasion of Ukraine to the offensive in Iran, generate repercussions that cross oceans and directly affect the country's strategic sectors, from tourism to real estate investment and agribusiness.
The key for the Dominican Republic will be to act with a strategic vision and anticipate risks, consolidating its position as a safe and reliable destination, capable of maintaining the confidence of international investors and tourists, even in a world marked by uncertainty and armed conflicts.
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