DOMINICAN REPUBLIC

	FY 1998 Actuals	FY 1999 Estimate	FY 2000 Request
Development Assistance	$8,292,000	$6,039,000	$7,385,000
Child Survival & Disease Fund	$2,470,000	$8,785,000	$2,599,000
Economic Support Funds	$2,500,000	$2,300,000	$3,000,000
P.L. 480 Title II	---	$9,841,000*	---
* includes emergency food aid in response to Hurricane Georges. An additional $5 million in FY99 food aid is also planned to address hurricane reconstruction.

Introduction

The United States has a strong interest in a democratic, stable and economically healthy Dominican Republic. U.S. interests in the country include strengthening democratic institutions, fighting drug trafficking and money laundering, enhancing market access for U.S. exporters, combatting the smuggling of aliens, controlling the spread of AIDS, reducing environmental degradation, and promoting stability in the region. The country is the United States' seventh largest export market in Latin America. The geographic proximity of the Dominican Republic means that its problems often have a direct spillover effect on the United States. The high incidence of poverty, lack of economic opportunity, and social injustice have resulted in sizeable emigration. Roughly one out of nine Dominicans is now thought to live--legally or illegally--in the United States.

Development Challenge

The trail of destruction left by Hurricane Georges, which hit the Dominican Republic on September 22, 1998, has affected virtually all regions of the country and is the worst since Hurricane David passed over the island in 1979. Flooding and wind damage from the hurricane killed at least 280 people and left a further 300,000 homeless. Total direct losses are estimated at $1.96 billion, equal to 14% of the country's 1997 gross national product. The worst hit sector has been agriculture, which accounts for 13% of GDP. Plantains and poultry suffered the most, with sugarcane, cocoa, coffee, citrus and palm producers also experiencing substantial losses. Twenty-five percent of the road network and 60% of all bridges were damaged or destroyed. Further infrastructure damage includes schools, hospitals, clinics, homes, airports, aqueducts, sanitation facilities and irrigation systems. Increased fecal contamination of water and food is leading to higher rates of diarrhea, especially among high-risk groups such as children. Disease-bearing insects and rodents are proliferating due to stagnant water in broken water pipes and uncollected garbage. The U.S. Government has announced a total of $50.3 million in assistance to the Dominican Republic following the hurricane, most of which is being funnelled through nongovernmental organizations (NGOs). Disaster funds were used initially for helicopter transport of critical supplies to isolated communities and provision of additional emergency supplies. Disaster funds are also being used for agricultural rehabilitation and provision of temporary shelters. P.L. 480 Title II emergency food assistance will be provided as well as U.S. Department of Agriculture (USDA) Section 416(b) wheat (100,000 metric tons). Section 108 funding for U.S. private agribusinesses to assist in the reconstruction of the Dominican agricultural sector is also being provided. USAID is currently funding health and water and sanitation activities in those areas most impacted by the hurricane. Also, USAID has reprogrammed a substantial portion of its ongoing and planned activities to ensure that they target those most detrimentally affected by the hurricane.

While the reconstruction effort will be a major component of USAID's overall development program, to a large extent the ongoing current strategic plan will continue. The Dominican government's (GODR's) ability to act on economic and social issues continues to be hampered by weak state institutions plagued with patronage, large inefficient bureaucracies and inadequate financial controls. USAID-funded grassroots organizations identify, advocate and enact change on a broad range of local and national development priorities, such as improving the provision of basic services (e.g., water and sanitation, electricity) and promoting decentralization. The selection of new judges throughout the country by the Supreme Court through an open public hearing process is one example of the progress being made in justice sector reform. USAID support in recruiting and training over 10,000 volunteers to monitor the 1998 Congressional and municipal elections led to an extremely transparent and smooth-running election process.

Improved fiscal and monetary management has led to inflation below double digit levels and remarkable real growth of roughly seven percent or higher over the last three years. This growth, however, has not been equal throughout society, focusing on only a few sectors such as the duty-free, export assembly zones and communications. The Dominican Republic still remains one of the poorest countries in the Caribbean, with high growth rates masking a pronounced inequity in income distribution. In response, USAID is pursuing a focused economic policy dialogue with the Dominican government. Key successes include the signing of trade agreements with Central America and the Caribbean community.

USAID support for voluntary family planning, HIV prevention, and the provision of water and sanitation services has contributed to notable improvements in the overall health of Dominicans in targeted areas. Nonetheless, critical health care issues remain. These include a sharp rise in HIV/AIDS infection among the general population, limited access to reproductive health care by youth, and inadequate water and sanitation systems, all exacerbated by limited coverage for basic preventive health care. USAID assists Dominicans to achieve their reproductive goals through strengthening of NGO partners and increased technical assistance to the GODR. USAID is marketing its model community-managed water and sanitation projects to mobilize private sector, other donor, and government funding. USAID has increased support to public and private sector organizations working to prevent HIV/AIDS, and is developing the infrastructure for greatly expanded diagnosis and treatment.

The Dominican Republic is overdependent on inefficient and unreliable energy sources, such as firewood and charcoal, that pollute the environment and deplete the natural resource base. By demonstrating how known technologies can exploit untapped alternative energy resources in a cost- effective and commercially viable way, USAID is helping to improve power availability for the rural poor. Solar power for community potable water and domestic lighting systems; pilot conservation projects in critical watersheds; and wind energy and mini-hydro pilot demonstrations for community electrification, are among the activities receiving USAID's support. Graduation from U.S. assistance is not expected in the near term. The GODR is up-to-date on most foreign debt obligations. Damage from Hurricane Georges has pushed the government to seek a delay in debt payments falling due through March 1999, worth around $110 million, from the Paris Club of creditors.

Other Donors

The U.S. is the fifth largest donor to the Dominican Republic, after the Inter-American Development Bank (education, health community development, tourism, transport infrastructure, financial sector, land titling, irrigation), the World Bank (education, health, roads, energy, justice reform, irrigation), the European Union (integrated rural and community development, private sector and NGO support, energy, water/sanitation, health, natural resources), and Japan (agriculture, health, natural resources). The United Nations Development Program, Italy, Spain and Germany are other important donors.

FY 2000 Program

With a $14.9 million request for FY 2000 (including $3 million in ESF), USAID's assistance program contributes to four Agency goals: Democracy, Population and Health, Economic Growth and Environment. Principal activities include reform of the justice system, civic education and support for popular participation in democratic processes, election monitoring, socio-economic policy reform analysis and dialogue, reproductive health services, HIV/AIDS prevention, and health sector reform. In the aftermath of Hurricane Georges, USAID will continue to provide assistance in reconstructing the country, which contributes to the Agency's humanitarian assistance goal. USAID's strategic framework for the Dominican Republic is currently under review and will be completed by May 1999. Based on this review, additional funds for the environment may be required.

DOMINICAN REPUBLIC

FY 2000 PROGRAM SUMMARY
($000s)

USAID Mission Director: Edward Kadunc

USAID Strategic and Special Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Developmnt	Humanitarian Assistance	TOTALS
S.O. 2 Increased Use of Preventive Health Care Services - DA - CS	--- ---	2,800 2,599	--- ---	--- ---	--- ---	--- ---	2,800 2,599
S.O. 3 Better Functioning Democracy - DA - ESF	--- ---	--- ---	--- ---	3,985 3,000	--- ---	--- ---	3,985 3,000
S.O. 4 Increased Capacity to Produce Envi-ronmentally Sound Energy	---	---	---	---	---	---	---
Sp.O 1 Better Gov-ernment Economic Decision-making - DA	600	---	---	---	---	---	600
Totals - DA - CS - ESF	600 --- ---	2,800 2,599 ---	--- --- ---	3,985 --- 3,000	--- --- ---	--- --- ---	7,385 2,599 3,000

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ACTIVITY DATA SHEET

PROGRAM: Dominican Republic
TITLE AND NUMBER: Increased Use of Effective Preventive Health Care Services and Practices, 517-SO02
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $2,800,000 DA; $2,599,000 CS
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2002

Summary: Despite government and private sector investments in recent years, many challenges remain to improve access to basic health services. The quality of health care services remains inadequate and does not respond to the needs of the poor. For example, 44% of the rural population is still without access to potable water, 23% of adolescent women are pregnant or already mothers, and one of three women reported some type of sexually transmitted infection during the past year. The HIV/AIDS epidemic continues to grow. The current HIV seroprevalence rate is estimated at 2.5% among the sexually active population. In a recent study on maternal mortality, AIDS was identified as the leading cause of death (12%) among women of reproductive age in the National District. The maternal mortality rate and underlying malnutrition rate is unacceptably high given the country's level of economic development. The Ministry of Health (MOH) has been very centralized and inefficient. In the past few years, however, the government has embarked upon an effort to decentralize to the provincial level. Unfortunately, limited capacity exists to implement health programs at the local level. The purpose of this strategic objective (SO) is to address critical public health concerns of low-income Dominicans through support to the government and NGOs, and through joint ventures that also involve the private sector. The expected result is greater utilization of basic services such as water and sanitation, family planning, and diagnosis and treatment of sexually transmitted infections (STIs). Beneficiaries are women and men, with a special emphasis on youth of reproductive age at risk of HIV and sexually transmitted diseases, and poor families in areas receiving water and sanitation improvements under the SO. Since the DR is one of the epi-centers for HIV/AIDS infection in the Caribbean, support for HIV/AIDS/STI prevention contributes to reducing the spread of infectious diseases into the United States.

Key Results: The following intermediate results are necessary to achieve this objective: (1) AIDS: sexually active population practicing low-risk behavior increases from 67% to 70% among males and from 72% to 75% among females by 2002; (2) Family planning: contraceptive prevalence rate using modern methods increases from 59% to 64% by 2000; (3) Best practices: maternity hospitals with postpartum family planning services increases from one to fifteen by 2000; and (4) Water: rural population with access to potable water increases from 56% to 64% by 2002.

Performance and Prospects: Performance during the past year was as expected until Hurricane Georges in September. The remainder of 1998 focused on retargetting ongoing activities to provide relief to Dominicans suffering from the hurricane damage.

Hospital-based postpartum voluntary family planning services were expanded from four to ten public maternity hospitals, with another five planned for initiation in 1999. These hospitals carry out over half of all deliveries in the country, attending obstetric emergencies and complications and focusing special attention on delaying subsequent pregnancy in teen mothers. A communication strategy was launched in 1997 to increase male involvement in reproductive health, support family planning and reduce the transmission of HIV and other STIs. A survey of urban men revealed that more than one in four men reported using a condom during the past sixty days. Seventy-nine percent of men reported they have changed their sexual behavior in response to the threat of HIV, with 39% indicating they have fewer partners than three years earlier. Significant resources are also being invested to influence sexual behavior among adolescents and young adults. USAID is testing innovative approaches to raise awareness, involve community members, parents and teachers, and advocate for healthier lifestyles. These activities are expected to show promising results during 1999-2000.

Sixteen new grants have been awarded to NGOs for national-scale HIV/AIDS prevention and prevention-care continuum activities to reduce risky behavior among target populations. USAID has initiated a policy group to promote a positive policy environment towards HIV/AIDS prevention and care. While the main focus of assistance is through NGOs, USAID is exploring opportunities to work more closely with the Dominican government (GODR). USAID has begun to work with the MOH to strengthen the institutional capacity of the national AIDS Program. By the end of this assistance the GODR AIDS program will assume a leadership role as a normative and coordinating body for the National HIV/AIDS/STI program in the DR.

USAID's efforts in the rural water sector focus on policy reform and marketing a successfully sustainable development methodology that includes community participation throughout the entire activity design and implementation process. With existing partners, USAID mobilized resources to provide emergency relief efforts following Hurricane Georges. Working both within affected communities and refugee centers, USAID partners established water supply and sanitation facilities, provided food and direct medical care, repaired housing and developed key educational materials to prevent disease outbreaks.

Possible Adjustments to Plan: During FY 1999 USAID will design a new health activity that will contribute to the government's decentralization and reform process in the health sector. USAID is reviewing the need to support child survival interventions in light of the impact of Hurricane Georges on the overall health status of the Dominican population. The initial project sites will be in areas affected by the hurricane. The expansion of USAID's work with the total community participatory approach and empowerment at the local level will be emphasized.

Other Donor Programs: USAID has leveraged other donor funds for rural water and sanitation systems that are adopting USAID's model, such as a new $50 million IDB water program. The new health reform activity will allow USAID to leverage World Bank and IDB health sector loan funds by providing a platform to support demonstration projects under a new public health system. The European Union (EU) initiated a communication strategy for AIDS prevention, directed primarily at youth, jointly with the national AIDS control program. USAID, UNAIDS and EU assisted the GODR in producing situational and response analyses for HIV/AIDS. USAID is working with the UN system agencies such as UNAIDS, Pan American Health Organization, UNICEF, and the United Nations Population Fund on a variety of health issues including AIDS public policy, adolescent reproductive health, quality of care, and community participation in water and sanitation. In many of these areas USAID is the key donor. The GODR has programmed approximately $130 million for water/sanitation activities, contributed over $17 million in health sector reform activities, and provided roughly $3 million for family planning efforts and $1.5 million for AIDS prevention.

Principal Contractors, Grantees or Agencies: Current grantees and contractors include the Academy for Educational Development, Development Associates, and Entrena.

Selected Performance Measures:

	Baseline	Target (2000)	Target (2002)
Contraceptive prevalence rate 1 (modern methods)	59% (1996)	64%
Sexually active population practicing low-risk behavior	M 67% (1996) F 72% (1996)	M 69% F 74%	M 70% F 75%
Rural population with access to potable water	56% (1996)	60%	64%
1 There is no 2002 target for this indicator as the activity is scheduled to end in the year 2000.

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ACTIVITY DATA SHEET

PROGRAM: Dominican Republic
TITLE AND NUMBER: More Participatory, Representative and Better Functioning Democracy Achieved, 517-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $3,985,000 DA; $3,000,000 ESF
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2002

Summary: Recent Dominican history has been marked by authoritarian tendencies and clientelistic party politics. Although the Dominican Republic cannot yet be termed a consolidated democracy, elections have resulted in the transfer of political power over the past two decades. However, due to a long tradition of repression and little knowledge of advocacy techniques, activities and coordination of civil society groups involved in promoting reforms have been somewhat erratic. Given the prevalence of clientelism within the political parties, together with the general weakness of most state institutions, USAID's objective focusses on enhancing the capacity of civil society. Civil society groups need to know how to advocate for, and monitor progress toward, the consolidation of democratic gains in the electoral process, the independence of the judiciary, and the modernization and democratization of the legislature and local government. In addressing these problems, all Dominicans will benefit from a strengthened democratic system and a lively, active civil society better able to defend political and civil liberties against authoritarian encroachments. Strengthening democracy, and in particular the rule of law, reduces criminal activity that affects the United States, and protects U.S. citizens in property and investment disputes.

Key Results: Three intermediate results are viewed as necessary to achieve this objective: (1) rule of law: prisoners held without sentences will be reduced from 88% to 70% by 2002; (2) civil society: citizens involved in activities in favor of democracy increases from 18% to 25% by 2002; and (3) elections: eligible citizens who vote will increase from 73% to 86% by 2000.

Performance and Prospects: USAID, in close alliance with its Dominican civil society partners, has continued to obtain impressive results. Although voter turnout for the 1998 municipal and congressional elections--the first such elections that were separate from Presidential elections in three decades--was predictably lower than the Presidential elections in 1996, the amount of transparency and order achieved was remarkable. Through a USAID-funded civic movement, 10,000 volunteer observers contributed to an atmosphere of confidence in the election results, and provided another highly accurate quick count. In preparation for the presidential elections in 2000, USAID will be working once again to strengthen the national electoral monitoring network and support the preparation of a better educated electorate.

With little more than a year in office, the new Dominican Supreme Court is recognized for advancing the democratization and independence of the judiciary from special interests and for holding state organizations and public officials subject to the rule of law. Similar to the open and transparent process in 1997 through which the Supreme Court justices were selected, the Supreme Court held public hearings throughout the country during the past year to select all lower-court officials. USAID is continuing to work with the Dominican government to modernize the justice sector. A pilot court program seeks to improve 22 criminal and civil courts. Assistance to prosecutors promotes efficiency in criminal prosecutions and reductions in case delays. USAID's anti-corruption program supports government efforts to prosecute corrupt public officials. In addition, judicial reform commissions are receiving assistance to revise legal codes and to enact judicial career programs which will enhance the independence and quality of judges, prosecutors, and public defenders. USAID is assisting the process of integration of full-time public defender services into the government organization structure.

In addition to strengthening the rule of law, USAID works to foster participatory grassroots democracy through activities to educate and motivate Dominican citizens in the practice of democratic values and civic responsibilities. Broad-based civic participation is being promoted at the local level, working on everyday problems to increase citizens' understanding of municipal government and the ability to elicit responses from local officials. Assistance is also aimed at supporting the institutionalization of civil society's oversight function of elected officials and state institutions.

Possible Adjustments to Plans: Progress has been made towards a true separation of state powers, one of the major structural changes required to achieve a consolidated democracy. At this point, however, old traditions of power brokerage and cronyism threaten to stall the reform process unless a coherent and resourceful civil society continues to push for democratic change. Civil society must place renewed emphasis on its important progress in the areas of public advocacy, respect for human rights, and participatory decision-making.

Other Donor Programs: The IDB is providing $40 million for a land registry and valuation program. The World Bank has contributed nearly $600,000 for justice reform. France and Spain have also contributed to improving the justice system. The IDB is providing funds for civil society advocacy efforts.

Principal Contractors, Grantees, Agencies: Current contractors and grantees include the National Center for State Courts, Chemonics International, Casals and Associates, the Foundation for Institutionality and Justice, Citizen Participation, and the Mother and Teacher Pontifical Catholic University.

Selected Performance Measures:

	Baseline	Target (2000)	Target (2002)
Prisoners held without sentence	88% (1996)	74%	70%
Citizens involved in activities in favor of democracy	18% (1997)	23%	25%
Eligible citizens who voted 2	86% (1994)	86%	75%
2 The 2002 target is lower than the 2000 target because the 2000 elections are Presidential elections, while the 2002 elections are only for congress and municipalities.

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ACTIVITY DATA SHEET

PROGRAM: Dominican Republic
TITLE AND NUMBER: Increased National Capacity to Produce Environmentally Sound Energy, 517-SO04
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: no new funding
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2001

Summary: The Dominican Republic continues to be plagued by persistent electric power shortages and a rapidly deteriorating natural resource base, further exacerbating the power shortage problem given the reliance on hydroelectricity. The sector of the population most burdened by this situation is the estimated two million poor Dominicans living in rural areas without access to the national grid and on hillsides that are being severely eroded due to deforestation and destructive farming practices. The purpose of this SO is to increase the national capacity to produce environmentally sound energy through: 1) commercially feasible renewable energy alternatives; and 2) increased public awareness of community based approaches to protect hydroelectric energy production in critical watersheds. The strategy to achieve this objective is built upon successful USAID-funded demonstration activities in renewable energy and community-driven models for sustainable hillside agricultural production and reforestation. Direct beneficiaries are off-grid, rural communities without energy or water and rural poor living on hillsides in watersheds where there is the potential for hydroelectric production. USAID support for commercially viable renewable energy has opened the economy to increased trade from the United States.

Key Results: Two key intermediate results are necessary to achieve this objective: 1) increased investment in renewable energy (installed capacity of project-funded, commercially feasible renewable energy systems increases from 14 kilowatts (kw) of installed capacity to 250 kw by the end of 1999, and 30 new, wind and microhydro demonstration systems financed and installed); and 2) increased participation in soil conservation (number of small farmers participating in conservation activities increases to 5,000 and the cumulative area under sound soil conservation practices increases to 3,600 hectares by the end of 1999).

Performance and Prospects: Performance over the past year has been as expected in some areas and disappointing in other areas, due primarily to a prolonged drought in 1997/98, followed by Hurricane Georges.

Encouraged by the success of USAID-funded demonstration activities in photovoltaics, several Dominican commercial firms have established multimillion dollar businesses in renewable energy in both the Dominican Republic and Haiti, resulting in millions of dollars worth of panels imported from the United States. The Dominican commercial banking sector has started demonstrating some interest in solar energy and energy efficiency. Although the target for increased installed capacity of USAID-funded renewable energy systems is well short of expected (42%), the total number of new wind systems has exceeded expectations. The extended drought from early 1997 to September 1998 demonstrated that larger planned microhydro systems (25-50Kw each) are not technically feasible. There has been a greater than expected demand for the small wind systems (.3-1Kw) and small microhydro systems (.5-5Kw), especially after Hurricane Georges' impact in September 1998; however, funding for community microhydro systems has been constrained due to a lack of required subsidies.

Economically attractive models for effective natural resource management are being demonstrated with ample community participation in the design and implementation of the activities. Although the number of farmers participating in soil conservation activities has surpassed expectations, the total area treated with soil conservation practices fell short of the goal due primarily to the inability to reforest during the drought period. Working closely with the Dominican government, USAID continues to help NGOs promote their successful community-led models to other donors. Case studies of three models were highlighted during a three-day conference involving both the Dominican Republic and Haiti. Farmers, high-level government officials and other donors from both countries laid the framework for a joint, binational environmental program in the largest watershed on the island (the Artibonito) which is shared by both countries. The workshop generated strong interest at the highest levels of both national governments and other donors, demonstrating the program's potential as an excellent vehicle to develop cooperation between these two neighbors. Continuing in its role as a catalyst, USAID will work with other donors to reduce the degradation of the environmentally and economically important Artibonito watershed.

To help direct power development along an environmentally-sound path, USAID has provided limited assistance to the GODR to set standards for new investments, and to establish a regulatory body for the power sector. Environmental audits of the power sector were performed and distributed among potential private sector investors, while several training activities were financed to help move the GODR along in the decision to privatize the power sector in an environmentally sound way.

Possible Adjustments to Plans: To address the problems and lessons learned with larger renewable energy systems, greater emphasis will be placed on promotion of smaller systems and on promotion of successful demonstrations. Credit guarantee mechanisms will be considered to encourage the Dominican commercial banking sector to invest in alternative energy. USAID is reviewing its strategy in energy and environment to include promising low-cost, high-impact initiatives to take advantage of successful experiences to date and a receptive environment for change. Several areas that the Mission is considering are: 1) US/GODR energy partnership; 2) pilot for rural cooperative electrification; 3) Global Climate Change initiatives using commercial approaches (alternative energy, carbon sequestration, energy efficiency); 4) bi-national cooperation with Haiti in the Artibonito Watershed; 5) improved forest management, an obvious need in the wake of Hurricane Georges; and 6) environmental policy reforms (environmental law, consolidation of agencies). In order to implement these activities, additional resources will be necessary for this objective.

Other Donor Programs: Spain has been the largest single bilateral donor in natural resources, providing $43 million. The European Union has contributed a total of $44 million. The IDB is providing $13 million for reforestation. The World Bank and IDB have provided loans on the order of $160 million for irrigation projects. Germany is providing $5 million in assistance for a dry forest management project. Major expansion of electric power is planned for the immediate future, including a $300 million IDB/World Bank loan for two new privately-owned power plants. The Dominican government is contributing approximately $11 million in renewable energy and has programmed roughly $90 million for reforestation and watershed conservation activities.

Principal Contractors, Grantees, or Agencies: USAID implements activities with Winrock International, Enersol, the Nature Conservancy, Catholic Relief Services and several local NGOs.

Selected Performance Measures:

	Baseline	Target (2000)
Installed capacity of project-funded renewable energy systems increases (kilowatts)	14 (1996)	250
Increase in area under sound soil conservation in target areas (hectares)	2,300 (1996)	3,600

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ACTIVITY DATA SHEET

PROGRAM: Dominican Republic
TITLE AND NUMBER: Better Systems and Information for Governmental Economic Decision-making, 517-SPO1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $600,000 DA
INITIAL OBLIGATION: FY 1999 ESTIMATED COMPLETION DATE: FY 2001

Summary: FY 1998 marked the final year of USAID's strategic objective of encouraging broad-based economic growth, which will continue as a limited special objective focussing on policy reform advocacy and dialogue with the Dominican government. Successful programs in microenterprise lending and basic education were phased out in 1997 and 1998, respectively. Business skills training for microentrepreneurs will continue, particularly for those affected by Hurricane Georges. Focus has been on strengthening the management and administrative systems of key NGOs to enable them to carry on activities after USAID assistance terminates, as well as creating linkages between NGOs and the Dominican government, the private sector and other donors. Building on earlier work with NGOs on an economic policy agenda and by engaging in effective policy dialogue and providing solid technical assistance, USAID helped the Dominican government articulate an economic vision and develop an ambitious reform package designed to alleviate poverty by opening up the economy, sustaining macroeconomic equilibrium and increasing social spending. Unfortunately, deterioration of the political environment and relations with congress, which is led by an opposing political party, has resulted in further delays in the passing of key legislation. Through USAID technical assistance and training, Dominican government officials will improve their skills and technical capacity. The ultimate beneficiaries of this objective are the 60% of Dominicans who are poor, unemployed or underemployed who will gain from the successful implementation of more equitable economic and social reforms. USAID support for market liberalization will also greatly benefit U.S. exporters.

Key Results: A key intermediate result necessary to achieve this objective is policy reform: at least twelve identified policy reforms approved by the Dominican government.

Performance and Prospects: Through short-term technical assistance, as well as continuous dialogue, USAID supports a more orderly flow of donor assistance to the Dominican government, increases the government's internal capability to analyze complex economic interactions, and provides effective feedback on proposed government programs and their likely effects on both efficiency and poverty alleviation. Technical analyses, dialogue and information provided to government economic policy makers enabled them to begin implementation of key reforms, and submit to congress those requiring new legislation. While the agricultural sector remains relatively closed, USAID has provided key analyses to the GODR to assist them in working towards liberalizing food imports. USAID financed an investors' roadmap that identifies the main administrative bottlenecks for foreign investors in the country. A USAID-funded study on rationalizing the national budget allocations for the social sectors led to an increase in budget allocations for the 1999 budget. USAID is assisting the Ministry of Finance and the Dominican Stock Market on the issuance of public bonds.

Economic highlights for the year include the signing of trade agreements with the Central American Common Market and the Caribbean Community (CARICOM). The two trade agreements establish the Dominican Republic as a bridge between Central America and the Caribbean, and should play an important role in promoting trade links between two heretofore economically separate regions. The Dominican Republic should also benefit from an increase in foreign investment, attracted by the special trade agreements the Central American Common Market and CARICOM maintain with the European Union and the United States. Four bills aimed at modernizing the functioning of the economy were submitted to congress, including a code of consumer rights, a new Market Order Code containing antitrust measures, a new legal framework for the stock exchange and a bill covering social security reform. The government has taken further steps outside the legislative arena to open up the economy and enhance the developmental role of the private sector. For example, the national Investment Promotion Office initiated a plan to eliminate bureaucratic barriers faced by foreign companies interested in investing in the country. The first privatization of a government-owned wheat milling company took place in December. Bidding for the capitalization of the generation and distribution arms of the state-run electricity company is scheduled to take place in early 1999. The government has increased budget allocations to the social sectors.

USAID facilitates broad-based discussions on economic issues between government officials and civil society. During 1999, USAID will assist the GODR to better articulate why proposed economic reforms are necessary to achieve sustained growth and alleviate poverty. USAID assistance will focus on the following priority areas: 1) recovery from Hurricane Georges, focussed on those microentrepreneurs affected; 2) completion and compliance with international trade agreements; 3) promotion of a competitiveness culture and mentality; and 4) support for key economic, social and policy reforms. USAID will finance key analyses and high-level consultancies in these areas and follow up with the government on implementing relevant recommendations.

Possible Adjustments to Plan: Given the political tension in the Dominican Republic between the administration and congress, as well as the extraordinary devastation caused by Hurricane Georges, USAID will review its strategic framework. Although USAID will maintain its focus on achieving results through short-term, high-level technical assistance for policy reform, USAID is now examining new strategies to assist the microenterprise sector in its hurricane rehabilitation efforts. Also, USAID is exploring new ways to strengthen and broaden advocacy for reforms in basic education and energy policy, two areas where there appears to be consensus among the GODR and civil society as key to the economic and social development of the country.

Other Donor Programs: USAID coordinates its policy dialogue with the World Bank and the IDB, which have provided the government with their assessments of economic policy reform priorities. The World Bank has recently provided $400,000 in assistance to improve the government's communications with the public concerning policy reform. The United Nations Development Program (UNDP) provides TA and equipment totalling approximately $8 million to modernize the working environment of several key ministries.

Principal Contractors, Grantees, or Agencies: Grantees and contractors include the Santo Domingo Technological Institute; the Foundation for Economy and Development; Economists at UCLA, the University of Wisconsin and Georgia State University; the Harvard Institute for International Development, the Boston Institute for Developing Economies, and Chemonics International, Inc.

Selected Performance Measures:

	Baseline (1997)	Target (2000)	Target (2001)
Number of identified policy reforms approved by Dominican government	0	10	12

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ACTIVITY DATA SHEET

PROGRAM: Dominican Republic
TITLE AND NUMBER: Hurricane Georges Reconstruction, 517-SPO2
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCES: FY 2000: no new funding
INITIAL OBLIGATION: FY 1999 ESTIMATED COMPLETION DATE: FY 2001

Summary: On September 22, 1998, Hurricane Georges entered the Dominican Republic from the southeast with winds of up to 120 miles per hour. Over a twelve-hour period it wreaked havoc across the country. Heavy winds severely damaged the eastern region, while the southwest suffered from extensive flood damage. At least 280 people have been confirmed dead. Total direct losses are estimated at $2 billion and total economic losses at $3.3 billion. All socio-economic areas suffered: approximately $474 million in agricultural infrastructure and production losses; $380 million in destroyed and damaged homes; $46 million in electricity losses; $34 million lost in educational infrastructure; rural health care centers damaged and destroyed; hospitals suffered major damages; water systems were made inoperable; communicable and water-borne diseases increased; and thousands of homeless people sought shelter. Over a million Dominicans are estimated to be at risk in terms of their health due to the hurricane. The purpose of this SpO is to mitigate damages from Hurricane Georges. This program will focus on those in most need in the areas hardest hit by the hurricane, principally in the southwest, east and the National District.

Key Results: Four key intermediate results are necessary to achieve this objective: 1) health: 80% of children in targetted communities will be provided adequate health care services by 2001; 2) water: 80% of homes in targetted communities will be provided with adequate water supplies by 2001; 3) food: 300,000 Dominicans will receive emergency food by 1999; and 4) agriculture: prices of agricultural products will return to pre-hurricane levels by 2000.

Performance and Prospects: To date, the U.S. Government has announced a total of $50.3 million in assistance to the Dominican Republic following the hurricane. Disaster funds were used for helicopter transport of critical supplies, the provision of tents, plastic sheeting for roofing, water containers, water purification chemicals, and emergency food rations. Currently, USAID funds are being used for agricultural rehabilitation and provision of temporary shelters. P.L. 480 Title II emergency food assistance will be provided, with the first tranche of food expected in February. U.S. Department of Agriculture (USDA) Section 416(b) wheat will be arriving in the coming months, with the corresponding local currency generated from its sale to be used for agricultural rehabilitation. USDA Section 108 funding for U.S. private agribusinesses will also assist in the reconstruction of the Dominican agricultural sector. Finally, USAID has reprogrammed a portion of its ongoing and planned activities to ensure that they target those most detrimentally affected by the hurricane.

Building upon the assistance provided to date, this reconstruction program will continue to mitigate the damage caused by Hurricane Georges. USAID will focus on addressing the disaster's health effects on children and their caretakers. This will be accomplished through: providing primary health care and health education services to children and their caretakers in communities affected by the hurricane; safeguarding and improving the health of children and their families in poor communities by repairing hurricane damage to water and sanitation facilities; establishing a decentralized epidemiological and nutritional surveillance system to control disaster-related diseases and monitor vulnerable groups, with the input of community-based health services; and carrying out adequate health education campaigns to promote behavior change that will reduce the effects of anticipated epidemics on affected populations. In addition to the health-related focus, USAID will also assist in increasing the food supply of the country by providing management oversight of the Title II emergency feeding program and agricultural rehabilitation activities carried out under USDA's Section 416 wheat monetization program. USAID continues to explore ways to restore citizens' economic livelihoods and provide appropriate shelter to those Dominicans without homes or jobs due to the hurricane. As was the case with Hurricane David in 1979, well-intentioned hurricane relief can easily become paternalistic and foster dependency if proper design and planning efforts are not undertaken. Reconstruction assistance provided under this program will ensure customer ownership and the fostering of joint nongovernmental organization and Dominican government efforts.

Possible Adjustments to Plans: USAID has considered the needs required by the Dominican Republic to recover from the hurricane, other international donors' response, and USAID's comparative advantage in providing assistance. Based on this analysis, USAID believes additional funds are needed to respond to disease risks, immunizations, primary health care, and repairing potable water and sanitation systems. More funding is needed to rehabilitate extensive damage to small farmer land and plantings in labor-intensive and income-producing crops, and to improve marketing systems and correct sector policies. In housing and shelter, more funds are needed for building materials and housing credit. Additional funds for microenterprise credit are needed. Additional funding is also needed to reduce the fire risk from fallen timber, to recycle this downed timber for housing construction, and to stabilize the soil where erosion threatens infrastructure and agriculture. Finally, more assistance is needed to help establish a better coordinating mechanism among the various GODR agencies and civil groups so that they can adequately respond to the next disaster.

Other Donor Programs: The IDB and World Bank are providing soft loans to the Dominican government of $117 million and $110 million respectively to assist in the reconstruction effort. They have also promised to accelerate the disbursement of loans already approved. Funds from the World Bank are for basic education, roads and bridges, irrigation and water management, and municipal health services. IDB funding will be used for roads and bridges, urban water systems, electricity, social spending, community rehabilitation, and disaster mitigation planning. The International Monetary Fund will provide an emergency credit line of $55 million. The European Union is providing $42 million, mostly for infrastructure rehabilitation, and small amounts in light construction materials, water purification and emergency relief. Spain provided $21 million for loans for humanitarian aid, small businesses, agriculture, and communications. The United Nations is providing $12 million for social, community and agricultural development.

Principal Contractors, Grantees or Agencies: Anticipated grantees, contractors and participating agencies include the Pan American Health Organization, Entrena, the U.S. Peace Corps, and the U.S. Department of Agriculture.

Selected Performance Measures:

	Baseline (1998)	Target (2000)	Target (2001)
Percentage of homes in benefitted communities provided with adequate water supplies	0%	40%	80%
Percentage of children in benefitted communities provided adequate health care services	0%	40%	80%
Number of Dominicans receiving Title II emergency food 3	0	300,000
3 This indicator does not have a 2001 target because the food distribution program will end in 2000.

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