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Dominican Republic
Overview
The Dominican Republican has been on a bit of an economic
roller coaster ride in recent years.
Lifted by trade and tourism, the Dominican Republic
in the 1990’s had one of the fastest growing economies
in the region, with an average annual growth rate of
6.5 percent. In fact, tourism recently surpassed agriculture
as the leading employer. But unfortunately a slide in
global tourism as well as regional problems have caused
Dominican Republic’s fortunes to shrink.
Adding to this forecast was a bank crisis in May, 2003
in which the country’s second largest bank crashed,
taking two other banks in tow. The crisis affected more
than 400,000 depositors, many of them individuals and
small businesses. In the end the crisis produced considerable
political unrest, and was credited for ending the career
of President Hipolito Mejia, who this year was defeated
from seeking a second term by the reelection of former
President Leonel Fernandez.
Amid the election speculation, allegations were raised
on the reported role that the Dominican Republic plays
as a transfer point for Colombian cocaine en route to
U.S. shores.
Meanwhile, the Dominican Republic, which occupies two-thirds
of the island referred to as Hispañola with Haiti,
was devastated by floods in May, 2004. The flood claimed
at least 900 lives on Hispañola and left an additional
15,000 homeless.
On the positive side, the Dominican Republic recently
has signed a free trade agreement with the United States.
It is anticipated that the Dominican Republican’s
agreement will be placed under the umbrella of the Central
America Free Trade Agreement (CAFTA), which would make
CAFTA the second largest U.S. export market in Latin
America, behind only Mexico, with a combined total trade
relationship of approximately $32 billion.
The USAID Program: USAID plans to
spend $26.6 million in 2004 on programs to increase
economic opportunities for all Dominicans, especially
the poor, strengthen the roots and institutions of democracy
and provide for expanded health services for vulnerable
populations.
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