Towards the end of 2018, the highest authority of the Dominican Republic Central Bank, Héctor Valdez Albizu, made an announcement that resonated in both his country and continent: the quisqueyana economy grew 7% during that year and inflation was only 1.3%. Both data are significant because they are the result of a notable increase in the domestic demand. This growth is promising: it is changing the lives of hundreds of thousands of families throughout a good chunk of the Dominican territory for the better.
An example for the region
These results did not come about overnight. During the eleven years between 2008 and 2018, the country maintained an average annual economic growth rate of 5.1%. When only considering the years between 2014 and 2018, the rate was 6.6%, and reached 7% during 2018. This growth is the product of many factors worth detailing. Probably the most important of them is that the successful economic performance depends on the success of many sectors: the expansion of communications, construction, free trade zones, healthcare, commerce, financial services, transportation, logistics, storage, agriculture, among other economic groups. The vision Dominican Republic offers the observer is promising, mainly because it is not concentrated in one sector—as happened in Venezuela with the oil industry—, but depends on the interworks of many industries and services.
Another important factor is that the number of tourists who visit the country annually has kept growing. In 2018, it grew by 6% with respect to the previous year, surpassing the 6.5 million visitors in a year. This generated an income exceeding $7.6 billion. Similarly, more can be said about the income from remittances (keep in mind that more than two million Dominicans live in the United States). In 2018, according to the previously cited Central Bank, money sent to individuals from abroad increased by 10.4%, adding an income of more than $6.52 billion. Although remittances continue to be an important factor in the Dominican economy as a whole, its percentage has been decreasing gradually. In other words, the country has managed to reduce dependence on emigrants providing financial resources.
The last factor of this favorable economic trend we will mention is the Dominican Republic’s population pyramid. 60% of the country’s population is of working age (higher than the average for Latin America, which is 56.7%). The unemployment rate of 5.6% is also well below the average for the region, which reaches 8.4%. So far, the labor market has been able to respond to the demands of the majority of the productive sectors.
This economic performance has impacted the society. Poverty index decreases are an example to the world. In 2012, almost 40% of the population was living in poverty (actually, 39.7%). Five years later, in 2017, the number decreased to 25.5%. An extraordinary accomplishment: out of every 100 people living in financial poverty, 64 were able to overcome it in five years. Compared to the rate of population growth, the figure doubled. It is important to note that, in these reports of poverty reduction, the government figures coincide with those of multilateral organizations. The economic performance of 2018 possibly contributed to improving these indicators furthermore. Right now, together with Chile, Panama, and Uruguay, the Dominican Republic presents the most important advances in the complex struggle to reduce poverty in Latin America.
The expansion of the middle class—undoubtedly great news for any democratic society—demands two important and interwoven issues: education and higher incomes. First, expanding education to reach every Dominican includes widening its coverage, completely reducing any exclusion, and improving the teachers’ quality, as well as the cognitive capacities of the students with current challenges.
Second, the goal to become a high-income nation—an eloquent objective from a leadership that looks at the future responsibly—explicit in the National Development Strategy, Country-Vision 2030. That path sets important demands, among which is the mentioned quality in education, which must be propelled to meet the demands of the growing productive sectors. The digital revolution in course brings about challenges that, in big scale, can only be resolved if people study to become professionals capable of confronting them.
Six Big Goals
The World Bank has suggested an agenda with six big points for Dominican Republic. The first refers to its fiscal balance. In February 2018, the consolidated debt of the public sector exceeded $42 billion, equivalent to almost 55% of the GDP. Efforts to reduce this debt must be sustained.
The second issue on the agenda is the aforementioned quality of education, especially in key areas, where promoting an economic expansion. The third aspect is improving the business environment. Similar to other parts of Latin America, this objective must include legislative, fiscal, and procedural factors, as well as the relationship structure between investors and businessmen with regulatory bodies, which needs to be more agile and effortless.
All multilateral entities, including the World Bank, have warned about the risks that climate change represents, particularly for Central America and the Caribbean. In this series, Latino Debates, we have referred to the commotion that the climate is generating in the lives and economies of Hondurans, Guatemalans and Salvadorans. In the case of Dominican Republic, the World Bank calls to the need to generate, in the short term, a greater capacity for response and resilience in the face of eventual adversities. The climatic perspectives for the coming years suggest increasingly intense periods of heat alternating with increasingly violent and dangerous rain. Another important challenge for the Dominican Republic is securing its energy source by developing a sustainable platform as one of its strategic objectives.
The last point the World Bank makes warns that “increasing transparency and responsibility when developing policies” might not be fitting. Both issues directly relate to the ways of doing politics, but do not always advance simultaneously with changes in other public sector areas.
During the two governments that presided by Danilo Medina, which started in 2012 and will conclude in August 2020, important advances have been made, especially in the in poverty reduction and promotion of equity and inclusion, which are recognized inside and outside of the country. However, other issues such as the increase in crime and corruption are causing growing public concern. International Transparency has Dominican Republic as the second country, after Mexico, where most bribes are paid in exchange for access to public services, which are still structurally inefficient. The scarcity of these services stimulates electricity, water, health and other mafias. The country also leads the rankings of “diversion of public funds” and is considered one of the States where the fight against corruption has been least effective so far.
An Empowering Diaspora
On another note, the Dominican diaspora in the US should be valued for its significance. Not only because of the chrematistic circumstance (of remittances), but also its political empowerment. A little over two million Dominicans reside in the US. 75% of them are citizens, of which over half were born in US territory. Moreover, 60% are completely bilingual. Most of them are concentrated in New York, similar to the Boricua population. Another group is concentrated north of Boston, in Laurence (where the Dominican Dan Rivera is mayor) and Haverhill, where the current state legislator Andy Vargas was elected, who was the youngest councilman in the US a few years ago.
New York also has an important political Dominican representation in municipal and state positions. In addition, four years ago, Adriano Espaillat became the first Dominican to be elected for the US Congress, even after being an undocumented immigrant and obtaining a citizenship after a long process. Espaillat is the great grandchild of Ulises Espaillat, president of Dominican Republic in 1876.
Two other important enclaves in the US for Dominican presence and political power are in Rhode Island and New Jersey. In Rhode Island, former mayor of Providence (the state capital) Ángel Taveras and the state senator Juan Pichardo stand out. In New Jersey, Guillermo Linares and Kay Palacios are the first two Dominicans to be elected as state representatives, and Alex Blanco the first Dominican mayor of Passaic, a municipality close to Newark, the state capital across the Hudson River from New York City.
Undoubtedly, the Dominican that has reached the highest position in US politics is Tom Perez, the current president of the Democratic Party (the first Hispanic to reach the position). After an upward political career and a successful career in the Department of Justice, he was president Barack Obama’s Secretary of Labor.
Altogether, the Dominican population that migrated to the US has become a strategic asset for the economy and politics, where it has acquired relevance that has elevated it to decision-making environments.
To conclude, Dominican Republic is one of the countries with better outlook in the continent. Its almost 11 million residents have access to various opportunities. Although the macroeconomic statistics are favorable, the leaders are still responsible for creating more opportunities as this promising economic performance continues; and strengthening the rule of law until corruption is unacceptable. Finally, though it is premature to be speaking about the next elections to be held on May 16, 2020, it is prudent to keep the center of the public debate the topic of taking advantage of this favorable conjuncture to build an economic and social platform. In one or two decades, this could establish a model for the Caribbean, Central America, and the rest of Latin America.
Para español lea El Nacional “Debates Latinos: República Dominicana”