Active International, the world’s
largest corporate trading firm, today announced a new trade program that
will enable the Instituto Agrario Dominicano (IAD), the Dominican Republic’s
national agrarian organization, to trade commodities and finished products
in exchange for vital equipment and services.
The IAD is an autonomous government
agency formed by the Dominican Republic to improve the economic and social
conditions of Dominican farmers and sustain the national agricultural
economy. This is the first agreement of its kind forged between government
and private enterprise in the Dominican Republic.
Under the agreement, the IAD
will be able to leverage commodity and finished products such as tobacco,
sugar, and cocoa to acquire equipment and services, including irrigation
equipment, tractors, trucks, and energy generators, which will help to
further enhance the economic base of the country.
Members of the IAD will utilize
their products as a currency to purchase critical infrastructure, equipment
and services through Active, drastically reducing their cash expenditure.
“By working with Active,
the Dominican Republic will be able to maximize the full value of our
country’s rich agricultural commodities, while giving participating
businesses a financial tool to acquire equipment and services critical
to the growth of our country,” said Secretary of State and Director
General of the IAD, Tomas Hernandez Alberto. “The Economic Development
Program provides us with a unique opportunity to take advantage of the
multiple benefits of international corporate trade.”
Active and the IAD will work
together to determine the value of the products, which will be used as
a form of payment in lieu of currency. In turn, Active will establish
a trade bank which will be utilized to purchase infrastructure, equipment
and/or services based on predefined requirements.
By working with Active, the
IAD has access to new sales distribution channels for products that might
otherwise go unsold, distribution of goods to a global marketplace, and
the use of products to purchase desired business-related products, creating
additional liquidity for the business community.
“We are excited to be
playing a key role in this historic agreement with the Dominican Republic,”
said David Gallagher, senior vice president of international operations
for Active International. “The Dominican Republic, for the first
time, will be able to use their natural resources to fund economic development
programs. This has significant implications to their economic growth and
For example, a surplus in the
global supply of tobacco may leave Dominican agricultural businesses with
tobacco that they cannot sell, or would be forced to sell at a price significantly
below its value. Active International would acquire the tobacco from IAD
members in exchange for specified business products.
Through the IAD program, participating corporations identify infrastructure
requirements, such as new trucks and tractors, which Active would exchange
as payment for the tobacco. Active would then identify additional targets
to resell the tobacco to around the world. The Dominican Republic is a
major producer of top quality tobacco, as well as the world’s largest
producer of handmade cigars.
The Dominican Republic, Central
America’s leading exporter of organically-grown products including
sugar cane, bananas, tobacco and potatoes, is primarily dependent on agriculture,
trade, services, and tourism. Although the service sector has recently
overtaken agriculture as the leading employer of Dominicans (due principally
to growth in tourism, energy, telecommunications, and Free Trade Zones),
agriculture remains the most important sector in terms of domestic consumption
Active is in the first phase
of developing programs with the Dominican government. Currently, the rate
of export for the Dominican Republic is at $6.2 billion for products including
textiles, sugar, coffee, ferronickel, cacao, tobacco, meats and medical
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