Santiago de los Caballeros

The cigar capital of the world sits in the Cibao valley, 150 kilometers north of Santo Domingo. Santiago de los Caballeros—a city of 1.2 million—anchors an industry that produces 8.4 billion cigars annually and exports $1.34 billion worth, making cigars the Dominican Republic's second-largest export after gold. Of the 160 tobacco-processing companies across the country, the concentration around Santiago is decisive: 85% of national tobacco plantings—6,334 hectares—cluster near Villa González in the Yaque sub-valley. Wikipedia describes Santiago as the Dominican Republic's second-largest city; what it undersells is that this is the epicenter of a global monopoly. Premium handcrafted cigars from these factories reach the US (88%) and EU (10%), with 181 million hand-rolled and 8.2 billion machine-made annually. The free trade zone model (Zona Franca) exempts manufacturers from customs and income taxes, employing 40,000 directly in tobacco and 110,000 across related sectors. The 1993-1997 cigar boom established the pattern that persists: foreign demand drives Dominican processing in tax-exempt zones, creating employment without building domestic consumer markets. In April 2025, the US imposed a 10% tariff on cigar imports—down from an initially proposed 19%—testing the model's resilience. The biological parallel is resource concentration: like a river delta accumulating fertile soil, Santiago collected the regulatory advantages, agricultural conditions, and artisanal expertise that concentrate production. The Procigar Festival celebrates this annually, drawing global buyers to what organizers call 'the cigar capital of the world.'