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S0Y]a722E+(ORight-Aligned Paragraph Numbers(26*( n?@` `  hh#(@- ( a822E+(ORight-Aligned Paragraph Numbers(26*(!wAB` `  hh#(-@pp2 -ppp Ыx  @;X@<  9`("Courier 10cpiXx  @;X@<  9`("Courier 10cpiXixP7P,xA`&Univers (Scalable)TxP7P,xA`&Univers (Scalable)ixP7P,xA`&Univers (Scalable)2!|x#ixP7P# h#DOMINICAN REPUBLIC  FY 1997 Development Assistance: $10,252,000 Introduction The United States has multiple interests in the Dominican Republic, including enhancing market access for U.S. exporters, combatting the smuggling of aliens and other contraband, controlling the spread of AIDS, combatting drug trafficking and money laundering, strengthening democratic institutions, promoting stability in the region, and reducing environmental degradation. In 1995, the country was the United States' seventh largest export market in Latin America. The proximity of the Dominican Republic means that its problems often have a direct spillover effect on the United States. For example, the high incidence of poverty, lack of economic opportunity, and social injustice have resulted in sizable emigration. The U.S. Embassy in Santo Domingo issues the world's third highest number of immigrant visas to the United States. Roughly one out of seven Dominicans is now thought to live, legally or illegally, in the United States. Promoting democracy and sustainable economic development are essential to addressing these conditions and protecting core U.S. interests in the Dominican Republic. The Development Challenge The Dominican Republic has a population of some 7.3 million people, growing at 2% per annum. Although the country has made economic progress following an initial round of economic reforms in 198990, it still remains the second poorest country in the Caribbean and the sixth poorest in the Hemisphere. Flawed governance and macroeconomic policy have added disproportionately to the burden of the poor. Per capita gross national product (GNP) of approximately $1,420 in 1994 masks a pronounced inequity in income distribution the poorest 50% of the population receives less than 20% of total income, while the richest 10% receives about 42%. The level of social sector spending is one of the lowest in the Hemisphere. Weak government institutions are plagued by constantly changing officials, patronage, and corruption. The energy sector crisis continues, and reform measures languish in a Congress unable to pass critical reform legislation. Serious flaws in the judicial system act as a considerable constraint on economic development and limit individual rights. Expectations for improved social justice will not be realized unless the political structure becomes more responsive, more democratic, and less corrupt. These severe constraints contrast sharply with the country's economic potential and industrious population. In spite of these constraints, the rate of economic growth has remained positive throughout the 1990s, reaching almost 5% in 1995, according to the Central Bank. Reasonable monetary management since August 1994 kept inflation below 10%. Tourism and the free trade zones continue to be the driving forces of the economy, although the latter are experiencing strong competition from Mexico since the creation of the North American Free Trade Agreement. With a total foreign exchange income of nearly $2 billion in 1995, these two sectors were the principal contributors to the country's positive current account balance. Other nontraditional products have displayed an upward trend in export earnings, as opposed to traditional exports (sugar, coffee and ferronickel), which have suffered world market declines. The nongovernmental organization (NGO) sector is active, filling many gaps in public services such as health, family planning, microenterprise credit and support, environmental management, and women's issues such as legal aid. The Dominican Republic is facing a transitional period of historical proportions. Presidential elections are scheduled for May 1996. For the first time in more than 30 years, Joaquin Balaguer will not be a candidate. His term was limited to two years, with no reelection under the constitutional changes prescribed by the Pact for Democracy, which ended the political crisis that began with the seriously flawed 1994 elections. A competent, impartial electoral commission and growing involvement of civil society to assure an honest and legitimate election are increasing prospects that the country can inaugurate a credible new government on August 16, 1996. Those elected will face tremendous challenges a Congress lacking institutional strength to enact criticallyneeded reforms; enormous debts owed by the government for a massive infrastructure building program, bankrupt state industries, weak government ministries and agencies, and a revenue structure reliant on custom duties that will be shrinking as World Trade Organization (WTO) implementation proceeds. Many segments of society want and are ready for change. If credible elections can be held, the Dominican Republic can advance towards a more participatory democracy. Until a reformminded and participatory political system is firmly in place, sustainable development with equity will remain a distant goal. Given the time needed to consolidate political reform and to adopt sustainable growthoriented economic and social policies, the country optimally would no longer need the already modest reliance on U.S. assistance within ten years or so. Other Donors The Dominican Republic receives relatively little development aid compared to most other Latin American and Caribbean countries. In 1994, total official development assistance (ODA) net of interest repayments was $69 million, or less than $9.50 per capita, compared with $113 million ($47 per capita) for Jamaica, and $217 million (about $20 per capita) for Ecuador. The United States provides almost 9% of all donor assistance and is the largest bilateral donor after Japan. Italy, Spain and Germany are other important bilateral donors. The European Union (EU) and the United Nations Development Program contributed almost 40% of total net ODA in 1994. The World Bank and InterAmerican Development Bank (IDB) also provide sizable resource flows . FY 1997 Program USAID's strategy to help the Dominican Republic achieve broadbased, sustainable economic growth within a democratic environment has been to work primarily with the NGO community until a reformoriented government comes to power. The underlying theme has been to foster and strengthen community empowerment and capacity to deal with development issues in the absence of a serviceoriented government. In view of prospects for a new government in August 1996, USAID is positioning itself to respond rapidly, if requested by the new administration, to assist in areas such as rule of law, povertyoriented economic policy, and health sector reform. USAID's experience in working with and strengthening the NGO community will prove valuable in fostering efficient linkages between this community and the state institutions, especially in targeting the poor for delivery of social services to maximize the impact of scarce resources. In FY 1995, the Dominican Republic served as one of USAID's ten country experimental laboratories for reengineering. As a result of this experience, has enhanced its working relationships with a multiplicity of development partners, adopted a greater customer service focus, and put in place a flexible, responsive, teambased and resultsoriented management system. The principal areas of activity are increased popular participation in democratic processes, improved economic education and debate on key policy issues, greater access to small and microenterprise credit and skills development, strengthened quality of primary education, improved access to effective primary health care, including HIV/AIDS prevention and family planning services, and environmentally sound energy use and natural resource conservation. Moving the Dominican Republic onto a sustainable, more equitable growth path requires a multipronged approach, combining consolidation of democracy and improved governance with broadbased economic growth and enhanced investment in human capital. The USAID program provides such an approach.     Agency Goal: Encouraging Broadbased Economic Growth Recent Dominican experience demonstrates strong linkages between macroeconomic performance and living standards of the poor. Targeted activities to improve these standards and alleviate or reduce poverty must complement long overdue policy reform measures. In addition, income inequality and an unusually high desire to emigrate make this objective highly relevant to addressing U.S. interests. The program emphasizes human capital development of the poor through primary education, skills development, and small and microenterprise credit and technical assistance. The microenterprise sector accounts for about 23% of gross domestic product (GDP), and provides employment for almost 30% of the economically active population. In FY 1997, USAID's standardsetting primary education project will close, with major followon activities to be carried out through a $50 million project funded by the World Bank and the IDB. The Fondomicro project also will close, leaving the legacy of an independent small business bank to work alongside NGOs to service the small and microenterprise sector. A USAIDsponsored small business institute will begin operations, and USAID expects to undertake a povertyfocused economic policy dialogue directly with the new government. In the event of a funding shortfall, the ability to pursue a proactive, povertyfocused policy dialogue with the new government, supported by technical assistance, would be undercut. The scope of efforts to support small and microbusiness also would be reduced.  Strategic Objective 1: Increased Economic Opportunities and Benefits for the Dominican Majority Agency Goal: Stabilizing Population Growth and Protecting Human Health The GODR spends only l.7% of GNP (or 14% of its budget) on health, well below world and Latin American and Caribbean regional averages. Approximately 70,000 illegal abortions take place each year, testifying to the inadequacy of family planning services. High rates of unintended pregnancy, especially among adolescents, and lack of accessible primary health and family planning services compound the problems of lowerincome groups, since scarce resources are devoted to additional children or to curing family members from preventable diseases. For FY 1997, USAID support will continue to accelerate fertility decline in the Dominican Republic. Reproductive health information and services are targeted at the male population and adolescents, as well as at women of reproductive age in general, and are closely integrated with the rest of the primary health care program. Access to and use of maternal care services, preventive health and hygiene, and human immunodeficiency virus and acquired immunodeficiency syndrome (HIV/AIDS) prevention is an essential complement to USAID's emphasis on economic opportunities and poverty alleviation. Because of relatively good child survival indicators for the country, strong coverage by other donors, and the capability of the USAIDassisted NGO consortium to continue providing such services, USAID will no longer work directly in child survival in FY 1997. As a result of customer demand in target communities, however, and acting as a catalyst for mobilizing private, other donor, and Government of the Dominican Republic (GODR) funding, USAID intends to work with NGOs in developing communitymanaged potable water and sanitation systems, establishing "challenge targets" (or matching grant standards) for their increased financial participation. USAID also will continue to reinforce an incipient and highly innovative government and nongovernmental organization partnership to ensure the sustainability of such systems. The Dominican Republic is a USAID AIDSpriority country. Approximately 250,000 Dominicans (3.5% of the population) were expected to be HIV positive by the end of 1995, according to epidemiological projections, justifying USAID's overarching priority to build national institutional and technical capacity to address AIDS issues, including substantial support by the private sector. Although HIV/AIDS is found throughout the social spectrum in the Dominican Republic, the poor and socially disadvantaged are being infected at high rates. To address this growing problem, USAID will: (1) expand its already successful program to conduct an effective public information campaign, especially targeting adolescents, (2) educate and mobilize the private sector through workplace programs, (3) strengthen and expand the participation of both public and private sector organizations in HIV/AIDS and sexually transmitted disease (STD) prevention, and (4) develop the infrastructure for greatly expanded diagnosis and treatment.  Strategic Objective 2: Increased Use of Effective Primary Health Care Services by Undeserved Populations Agency Goal: Building Democracy Establishing an effective, functioning democracy is critical to the future development of the Dominican Republic. Civil society organizations and a public better informed of, and skilled in, the nature and practice of democratic values are the mainstay of such a system. Notable grass roots success has occurred in Salcedo Province, a small but densely populated region in the fertile Cibao valley, where public and private sector organizations have joined together to identify and implement their development priorities in a nonpartisan setting. However, such examples are extremely rare. The mediumterm thrust of USAID activities under this strategic objective is to enhance broadbased, active participation of civil society, including Dominican NGOs, public interest groups, labor unions, foundations, community organizations, and the general public in various aspects of political life, at the local and national level. To ensure a sustainable national framework for participatory democracy, however, reform of key political institutions is essential. In FY 1997, USAID intends to support public demand for enactment of judicial reform measures stipulated by 1994 constitutional amendments. Such reforms would lessen corruption, protect civil rights, and improve the functioning of the market economy. Another priority is to consolidate the network of democracy action groups created for the 1996 presidential election to prepare for the 1998 legislative and municipal elections another step in this historic democratic transition. In the event of a funding shortfall, efforts to promote truly broadbased participation in building democracy would suffer from the reduction in activities sponsored by NGOs which play a major role in strengthening democratic values and practices at the community level.  Strategic Objective 3: Increased Participation in Democratization Agency Goal: Environment Managed for LongTerm Sustainability The Dominican Republic is overdependent on inefficient and unreliable energy sources that pollute the environment and deplete the natural resource base. Up to 50% of governmentowned and contracted electric power production is often unavailable due to equipment failure or water shortages. An estimated two million rural residents live beyond the reach of the power grid. Firewood and charcoal still constitute the principal cooking fuel in most rural households. Cutting firewood is now considered the principal cause of deforestation, which causes siltation of hydropower reservoirs. By demonstrating how known technologies can exploit untapped alternative energy resources in a cost effective and commercially viable way, NGOs, cooperatives, community groups, and private businesses can help dramatically to improve power availability for the rural poor. Better living standards will help to limit urban migration. Solar power for community potable water and domestic lighting systems; solar cooking, heating and drying ventures; pilot conservation projects in critical watersheds, one of which is already being replicated by the World Bank; and wind energy and minihydro pilot demonstrations for community electrification, are among the activities receiving support under this strategic objective. In FY 1995, $500,000 in Environmental Initiative for the Americas financing was made available to support the expansion nationwide of a U.S. private voluntary organization's (PVO's) solar energy program among rural households. In addition to drawing on the capability of U.S. firms in the alternative energy field, this strategic objective can have a marked impact on the use of fossil fuels. USAID technical assistance has also been instrumental in developing a new energy law proposal and will assist in preparing internationally accepted standards and norms to regulate the conventional energy sector. The environmentallysound energy strategic objective is due to terminate in FY 1998 and requires only minimal funding to complete. A funding shortfall at this point would require early termination of eight NGO subgrants, jeopardizing USAID's credibility in the sector and undermining the opportunity to demonstrate the feasibility of alternative energy options for large segments of the rural population beyond the reach of the formal energy grid. The impact would fall disproportionately on the poor. Grants for conservation activities such as community management of national parks, sponsored by The Nature Conservancy, also would have to be cut short.  Strategic Objective 4: Increased Availability and Use of EnvironmentallySound Energy Sources  DOMINICAN REPUBLIC FY 1997 PROGRAM SUMMARY   X #TxP7P# | ddxe ddxe | *@ @ *Encouraging Economic GrowthStabilizing Population Growth and Protecting Human HealthProtecting the EnvironmentBuilding DemocracyProviding Humanitarian AssistanceTotal*  *USAID Strategic Objectives*l l *1. Increased Economic Opportunities and Benefits for the Dominican Majority Dev. Assistance $1,280,000  $1,280,000*l l *2. Increased Use of Primary Health Care Services by Underserved Populations Dev. Assistance $6,872,000 $6,872,000*    *3. Increased Participation in Democratization Dev. Assistance  $300,000 $1,300,000 $1,600,000*l l *4. Increased Availability and Use of Environmentallysound Energy Sources Dev. Assistance $500,000  $500,000*            *Total Dev. Assistance $1,780,000 $7,172,000  $1,300,000 $10,252,000 USAID Mission Director: Marilyn A. Zak  X #ixP7P#m# ACTIVITY DATA SHEET ă * PROGRAM: DOMINICAN REPUBLIC TITLE AND NUMBER: Increased Economic Opportunities and Benefits for the Dominican Majority, 517SO01 STATUS: Continuing PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997; $1,280,000 DA INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2001  Purpose: To augment the human capital of the poor and to facilitate their integration into the economy. Background: Poverty in the Dominican Republic is the driving force behind one of the highest emigration rates in Latin America. Flawed governance, economic policies, and social injustice are the primary factors that exacerbate Dominican poverty. Coupled with chronic low and inefficient government social spending, these factors result in large numbers of Dominican poor without the requisite skills and capacity to seek and hold gainful employment.  USAID Role and Achievements to Date: USAID support includes microenterprise credit and training, primary education curriculum development and teacher training, and grants to local nongovernmental organizations (NGOs) for policy analysis, debate and consensus building. Since 1990, microenterprise loans have resulted in the creation of over 40,000 new jobs with an additional 97,000 jobs strengthened. Some 9,700 microentrepreneurs received skills training which enabled 94% of them to find new employment, to create their own businesses, or to improve their income. A landmark tenyear plan for education reform was developed by a local NGO, with countrywide consensus. Primary school desertion rates declined almost 20% for USAID assisted schools, while the rate for other schools stagnated. Using local NGOs, USAID provoked an almost daily debate in the media on economic and poverty alleviation issues. Over the past two years, USAID support to 20 local NGOs for economic policy analysis and consensus building resulted in over 600 newspaper articles, 208 television and radio programs, and the participation of 5,550 people in training events.  Description: USAID focuses on achieving results in three key areas: (1) human capital development, through targeted business and vocational training and increased quality primary education for the poor, (2) financial services for small and microenterprises, and (3) NGOled economic policy analysis and public debate on a favorable environment for broadbased economic growth and poverty alleviation. Funding for the first two areas is channeled through local NGOs. Emphasis is placed on the provision of services that improve the productivity of the poor, at the same time allowing for costrecovery mechanisms to enable continued service delivery after USAID financial support ceases. Funding for the third area is channeled through a U.S. firm that works with a large number of local NGOs. FY 1997 funds will be used to expand several microentrepreneur skills training initiatives through local NGOs. A particularly innovative effort will be through a new small and microentrepreneur business support center located in a local premier business administration and engineering university. Funds also will be used to further a povertyalleviation, policyreform effort that will support alliances between local NGO thinktanks and specific government ministries involved with poverty alleviation. Host Country and Other Donors: Several major donors assist the microenterprise sector, including the InterAmerican Development Bank (IDB). The World Bank and IDB are collaborating on an $80 million primary education project which will pick up and expand where USAID leaves off, incorporating new curricula and testing materials in a much broader range of schools. Beneficiaries: The focus on the Dominican majority reflects the fact that the poorest half of the Dominican population earns only 18% of the national income. While USAID policy and basic education activities are designed to impact on as many of this majority as possible, USAID training and financial services activities focus on the small and microenterprise sector which employs almost 30% of the economically active population. Principal Contractors, Grantees, or Agencies: USAID implements activities through a U.S. firm, Stanford Research International; The American Institute for Free Labor Development; and local NGOs including the Microenterprise Fund (FONDOMICRO), the Basic Education Association (EDUCA), and the National Council of Private Business (CONEP). Major Result Indicators: ` `  hh#(-Baseline7  <Target Reduction in national poverty level` `  hh#(-20% (1992)7  <18% (1997) Reduction in unemployment and underemployment rateshh#(-20%/30% (1995)  <15%/25% (2000) Reduction in school desertion rates` `  hh#(-20% (1994)7  <16% (1999) ` `  ` `  m# ACTIVITY DATA SHEET ă PROGRAM: DOMINICAN REPUBLIC TITLE AND NUMBER : Increased Use of Effective Primary Health Care Services by Underserved Populations, 517SO02 STATUS: Continuing PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $6,872,000 DA INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE : FY 2000 Purpose: To improve access to and quality of family planning services, selected maternal and child health (MCH) interventions, including potable water and sanitation systems, and acquires immunodeficiency syndrome (AIDS) prevention practices. Background: A May 1995 World Bank report estimates that one in five Dominicans live in poverty and one in ten in extreme poverty. Data from 1992 indicates that half the families living below the poverty line consume less than 75% of required protein and 61% consume less than 75% of the required calories. Twentyfive percent of the households are headed by women. Broadbased participation, innovative nongovermental organzation NGO service delivery methods, and expanded social marketing have made a positive impact on the Dominican Republic's health status. Infant mortality has been cut almost in half over the past seven years, with the current rate at 43 per thousand. Diarrheal diseases and acute respiratory infections, aggravated by poverty and low birth weight, are among the main causes of underfive deaths. A new growing threat to child survival is human immunodeficiency virus (HIV)and AIDS, especially for 26,000 children and women engaged in prostitution. Twentyfive percent of AIDS cases are people under 25 years of age. Fertility rates among the rural population remain high at over four births per woman. On average, only 65% of the population has access to potable water, with much lower coverage in rural and marginal urban barrios. USAID Role and Achievements to Date: USAID resources are channeled primarily through NGOs for service delivery and U.S. private voluntary organizations (PVOs) for technical assistance in such areas as training, supervision, sustainability, information and financial systems management, and quality of care. Over one million couple years protection (CYPs) have been achieved by USAIDsupported agencies during the past five years. Annual targets have more than doubled since 1989 (139,000), and nearly 60% of married women use contraceptives. The program is increasing its focus on rural women, as well as on adolescents and men. Behavioral change communication is a major component of the HIV/AIDS strategy which targets specific highrisk and atrisk audiences. Recent data show significant HIV seroprevalence decrease among high risk groups from 13% to 8% between 1991 and 1994. Between 1993 and 1995, rates of breastfeeding in project areas more than doubled, from 12.7% to 26.1%. During the same time period, oral rehydration therapy use in project areas increased from 40% to almost 60%. Water and sanitation projects are focusing increasingly on promoting communitybased ownership and management of water and sanitation systems. Fiftysix community water organizations have been formed.  Description: Of the total funding requested for population and health, $4,735,000 is planned for population activities and $2,137,000 is planned for health activities. USAID works in four major areas: family planning, including maternal health and breastfeeding; reducing the risk of sexually transmitted diseases (STD) and HIV infection; increasing access to potable water and sanitation systems; and policy dialogue for health sector reform. Interventions in STD and HIV prevention target both the general population and core populations at increased risk of transmission and infection. Both urban and rural lowincome populations are reached through family planning and water and sanitation activities. USAID seeks an increasing involvement from the private sector in AIDS prevention. USAID also supports health policy reform to improve access and the utilization of services and to modernize the health sector. During FY 1997, USAID will continue to play a catalytic role in the health sector. USAID is actively building partnerships with other donors and fostering such liaisons between NGOs and the government. Support for communitymanaged water and sanitation projects will incorporate "challenge targets" to secure increased investments from the NGOs, the government, and the communities themselves. Maternal health issues will continue to be addressed through the reproductive health component of the family planning project. All of USAID's health and population interventions will reflect the crosscutting concerns of health sector reform, donor coordination, and NGO organizational strengthening, service delivery capacity building, and financial sustainability. USAID's termination of support for direct child survival interventions comes at a time when immunization coverage rates are high, infant mortality has steadily declined, other donors are providing technical and financial resources to the neediest areas, and the capacity of NGOs to work in this sector has been substantially strengthened. Host Country and Other Donors: The United Nations Children's Fund provides assistance to the GODR and a limited number of NGOs to control diarrheal diseases and acute respiratory infections. Primary emphasis continues to be the promotion of breastfeeding through certification of baby friendly hospitals. The rights of children in especially difficult circumstances also will be a major initiative. The European Union supports maternal and child health activities in an underserved region of the west and medical curriculum assistance, medicines and AIDS interventions. Japanese assistance consists of construction of and equipping a gastrointestinal facility and water/sanitation infrastructure. Spanish International Cooperation sponsors training and an epidemiology program. The Pan American Health Organization has a range of activities in water and sanitation, integrated community development, food and nutrition, epidemiological programs, diarrheal control, acute respiratory infections medicines and health sector reform. The World Bank and the InterAmerican Development Bank are joint partners in the design of a health care reform blueprint. Beneficiaries: Children under five years and women of reproductive age; highrisk groups and youth atrisk for HIV and sexually transmitted diseases; and families in the areas of project water and sanitation provision will benefit from these activities. Principal Contractors, Grantees, or Agencies: USAID implements activities through Development Associates, a U.S. firm; U.S. PVOS such as Catholic Relief Services and Food for the Hungry; and local NGOs including the Dominican Association for Family Wellbeing (PROFAMILIA), the Dominican Family Planning Association (ADOPLAFAM), Women in Development (MUDE), the Basic Education Association (EDUCA), and the National Health Institute (INSALUD).   Major Results Indicators: XD#%'0*,.8135@8: