The Dominican Republic

Basic Information

Area: 48,730 sq km (18,704 sq mi)
Population: 8,895,000 (2005 UN est.)
Capital City: Santo Domingo (pop. approx. 3 million). Second largest r city: Santiago de los Caballeros (pop. 500,000)
People: Mixed 73%, European 16%, African origin 11%
Languages: Spanish
Religion(s): Roman Catholic 95%
Currency: Dominican Peso (DOP)
Major political parties: Social Christian Reformist Party (PRSC), Dominican Revolutionary Party (PRD), Dominican Liberation Party (PLD), and several other minor parties.
Government: Representative Democracy
Head of State: Dr Leonel Fernandez Reyna
Prime Minister/Premier: Not applicable
Foreign Minister: Carlos Morales Troncoso

Geography

Location: Caribbean, eastern two-thirds of the island of Hispaniola, between the Caribbean Sea and the North Atlantic Ocean. Haiti occupies the western third.
Geographical co-ordinates: 19 00 N, 40 40 W.
Terrain: Mountainous
Climate: Maritime tropical. Little seasonal temperature variation; seasonal variation in rainfall.

History

The island of Hispaniola, of which the Dominican Republic forms the eastern two-thirds and Haiti the remainder, was originally occupied by the Tainos, an Arawak speaking people. The Tainos welcomed Colombus in his first voyage in 1492, but subsequent colonisers were brutal, reducing the Taino population from about 1 million to a few thousand in 50 years. To ensure adequate labour for plantations, the Spanish brought African slaves to the island beginning in 1503.

In the next century, French settlers occupied the western end of the island, which Spain ceded to France in 1697, and which, in 1804, when forces led by Juan Pablo Duarte, the hero of Dominican Independence, drove them out and established the Dominican Republic as an independent state. Britain was the first country formally to recognise the DR in 1844. In 1861, the Dominicans voluntarily returned to the Spanish Empire; in 1865, independence was restored. Economic difficulties, the threat of European intervention, and ongoing internal disorders led to a US occupation in 1916 and the establishment of a military government in the Dominican Republic. The occupation ended in 1924, with a democratically elected Dominican government. In 1930, Rafael L. Trujillo, a prominent army commander, established absolute political control. Trujillo promoted economic and infrastructural development, from which he and his supporters benefited. Mismanagement and corruption resulted in major economic problems, under a regime that paid scant regard to its citizens' human rights, brutally repressing them and Haitian migrants on occasion. In August 1960, The Organisation of American States (OAS) imposed diplomatic sanctions against the Dominican Republic as a result of Trujillo's complicity in an attempt to assassinate President Romulo Betancourt of Venezuela. These sanctions remained in force after Trujillo's death by assassination in May 1961. In November 1961, the Trujillo family was forced into exile.

In January 1962, a council of state that included moderate opposition elements with legislative and executive powers was formed. OAS sanctions were lifted 4 January, and, after the resignation of President Joaquin Balaguer on 16 January, the council under President Rafael E. Bonnelly headed the Dominican government. In 1963, Juan Bosch was inaugurated President. Bosch was overthrown in a military coup in September 1963.

Another military coup, on 24 April 1965, led to violence between military elements favouring the return to government by Bosch and those who proposed a military junta committed to early General elections. On 28 April, US military forces landed to protect US citizens and to evacuate US and other foreign nationals. Additional US forces subsequently established order.

In June 1966, President Balaguer, leader of the Reformist Party (now called the Socialist Christian Reformist Party - PRSC), was elected and then re-elected to office in May 1970 and May 1974, both times after the major opposition parties withdrew late in the campaign. In the May 1978 election, Balaguer was defeated in his bid for a fourth successive term by Antonio Guzman of the PRD. Guzman's inauguration on 16 August marked the country's first peaceful transfer of power from one freely elected President to another.

The PRD's presidential candidate, Salvador Jorge Blanco, won the 1982 elections, and the PRD gained a majority in both houses of Congress. In an attempt to cure the ailing economy, the Jorge administration began to implement economic adjustment and recovery policies, including an austerity programme in co-operation with the International Monetary Fund (IMF). In April 1984, rising prices of basic foodstuffs and uncertainty about austerity measures led to riots.

Balaguer was returned to the presidency with electoral victories in 1986 and 1990. Upon taking office in 1986, Balaguer tried to reactivate the economy through a public works construction programme. From 1988 the country suffered a 2-year economic depression, characterised by high inflation and currency devaluation. Economic difficulties, coupled with problems in the delivery of basic services, e.g. electricity, water and transportation, generated popular discontent that resulted in frequent protests, occasionally violent, including a paralysing nationwide strike in June 1989.

In 1990, Balaguer instituted a second set of economic reforms. After concluding an IMF agreement, balancing the budget, and curtailing inflation, the Dominican Republic is experiencing a period of economic growth marked by moderate inflation, a balance in external accounts, and a steadily increasing GDP. The voting process in 1986 and 1990 was generally seen as fair, but allegations of election board fraud tainted both victories. The elections of 1994 were judged by the international community to have been flawed. Following a compromise calling for constitutional and electoral reform, President Balaguer assumed office for an abbreviated term. In June 1996, Leonel Fernandez Reyna was elected to a 4-year term as President. In May 2000 Hipolito Mejia was elected to a 4-year term as President, and then in May 2004, Leonel Fernandez was again elected as President.

Politics

The Dominican Republic is a representative democracy whose national powers are divided among independent executive, legislative, and judicial branches. The President appoints the cabinet, executes laws passed by the legislative branch, and is commander in chief of the armed forces. The President and Vice-President run for office on the same ticket and are elected by direct vote for 4-year terms.

Legislative power is exercised by a bicameral congress - the senate (32 members) and the chamber of deputies (120 members). Under the constitutional reforms negotiated after the 1994 elections, the 16 member Supreme Court of Justice is appointed by a National Judicial Council, which is nominated by the three major political parties. The Court has sole jurisdiction over actions against the President, designated members of his cabinet, and members of Congress.

The Supreme Court hears appeals from lower courts and chooses members of lower courts. A Presidentially appointed governor heads each of the 31 provinces. Elected mayors and municipal councils administer the National District (Santo Domingo) and the 103 municipal districts.

Following an intense period of political activity and a 1994 election pronounced flawed by the international community, the competing political parties signed a Pact for Democracy on 10 August 1994, reducing President Balaguer's term of office from 4 to 2 years, setting early elections, and reforming the constitution. A new Central Electoral Board was named to work on electoral reform. The main candidates in 1996 were Vice-President Jacinto Peynado (PRSC), Jose Francisco Pena Gomez (PRD), and Leonel Fernandez (PLD).

Ultimately, domestic and international observers saw the 1996 election as transparent and fair. After the first round in which Jacinto Peynado (PRSC) was eliminated, President Balaguer endorsed the PLD candidate Leonel Fernandez.

Fernandez won the second round with 51% of the vote, the result was deemed a fair one and the transition from incumbent administration to incoming administration was smooth and ushered in a new, modern era in Dominican political life.

The Fernandez Government placed a greater emphasis on trade liberalisation and the need to attract foreign investment. Their priorities also included education, health and social services, sectors badly underfunded in earlier years. To fund this ambitious programme, Fernandez became committed to a programme of privatisation, though he faced considerable opposition from a reluctant Congress, where his party was in the minority. Under the terms of the cross party agreement following the flawed 1994 elections, Fernandez was not allowed under the Constitution to stand again. On 16 May 2000, the Vice-President of the opposition Partido Revolucionario Dominicano (PRD) Hipolito Mejia, was elected President in another free and fair election. He defeated Dominican Liberation Party candidate Danilo Medina 49.8% to 24.84%. Former president Balaguer garnered 24.68% of the vote. Although Mejia officially needed 50% plus one vote to gain outright victory opponents conceded, influenced by Balaguer, as the margin was so narrow.

A combination of external (11 September 2001, rising oil prices) and internal (mainly rising internal and external indebtedness born of slack control of public finances) factors affecting the DR economy from 2000-2004 resulted in inflation and interest rates rising, the peso weakening drastically against the US$, and the first negative GDP growth figure for over a decade by the end of the Meja government in May 2004.

Against this background, Leonel Fernandez won the May 2004 election with 57% of the popular vote, against Meja's 33%. With this outright victory in the first round, Fernandez used the 3-month period before taking up office on 16 August 2004 to travel abroad with a view to re establishing international investor confidence in a market whose international credit rating had plummeted during the Meja government. Fernandez included a 3-day visit to the UK in his itinerary, where he talked to a gathering of British business representatives at the CBI.

In his 16 August acceptance speech, Fernandez sent a strong message to the international community that he intended to tackle the country's debt problems and fight against corruption in the Dominican public and private sectors, and get the country back on track with the IMF. After 5 months of the new Fernandez administration the peso had strengthened considerably against the US$(from RD$48 to RD$31=$1.00); interest rates and inflation had fallen considerably; and the country was back on track with the IMF.

Government

Administrative Divisions: 31 provinces (provincias, singular - provincia) and 1 district (distrito); Azua, Baoruco, Barahona, Dajabon, Distrito Nacional*, Duarte, Elias Pina, El Seibo, Espaillat, Hato Mayor, Independencia, La Altagracia, La Romana, La Vega, Maria Trinidad Sanchez, Monsenor Nouel, Monte Cristi, Monte Plata, Pedernales, Peravia, Puerto Plata, Salcedo, Samana, Sanchez Ramirez, San Cristobal, San Jose de Ocoa, San Juan, San Pedro de Macoris, Santiago, Santiago Rodriguez, Santo Domingo, Valverde.
Independence: 27 February, 1844 (the UK was the first country officially to recognise the DR's independence)
Constitution: 28 November 1966
Branches: Executive - President (Chief of State and Head of Government), Vice President, Cabinet Legislative - Bicameral Congress (Senate and Chamber of Deputies) Judicial - Supreme Court of Justice.

Elections

Presidential elections are held in years evenly divisible by four. The next election is expected in May 2008. Congressional and municipal elections - the next ones to take place in May 2006 - are held in even numbered years not divisible by four. Suffrage: 18 years of age and compulsory (members of the armed forces and police cannot vote).

Economy

Basic Economic Facts

GDP:purchasing power parity - $52.71 billion (2003 est.)
Per Capita GDP:purchasing power parity - $6000 (2003 est.)
Annual Growth:5% (2005 est.) 4% GDP growth in first quarter of 2005, 5.2% GDP growth in second quarter.
Major Industries:(Industry = 17% of GDP). Sugar refining, pharmaceuticals, cement, ferronickel and gold mining, light manufacturing, construction, services (including offshore assembly operations, especially textiles), and transportation
Non Fuel Minerals (3% of GDP): Nickel, Gold, and Silver
Agriculture (13% of GDP):Products - sugar, coffee, cocoa, bananas, tobacco, rice, plantains, beef, and flowers
Trade:Exports ($5.5 billion 2003 est. excluding processing zones): commodities - ferronickel, sugar, gold, silver, coffee, cocoa, tobacco, meats. Imports ($7.9 billion, 2003 est.): foodstuffs, petroleum, cotton and fabrics, chemicals and pharmaceuticals.

The Dominican Republic is a middle-income developing country primarily dependent on agriculture, trade and services, especially tourism. Although the service sector has taken over from agriculture as the leading employer of Dominicans (due principally to growth in tourism and the Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is second place (behind mining) in terms of export earnings. Tourism accounts for more than $1 billion in annual earnings. Free Trade Zone earnings and tourism are the fastest growing export sector. Remittances from Dominicans living in the United States are estimated to be about $1.5 billion per year.

Following the economic turmoil from the late 1980s to 1990, during which GDP fell by up to 5% and consumer price inflation reached an unprecedented 100%, the Dominican Republic entered a period of moderate growth and declining inflation, which lowered to 2.7 % in 1993, the lowest in 16 years.

In the period from 1996-2000, the DR showed a very impressive economic growth rate running at an average of 7.8% annual GDP growth - the highest in all of Latin America and the Caribbean. The effects of Hurricane Georges in 1998 (damage to the infrastructure and to agriculture) had less repercussions for GDP growth than originally anticipated.

Economic activity is skewed towards 3 principal sectors; tourism, the free zones and agriculture. The Industrial Free Trade Zones offer attractive incentives for foreign investment in areas such as textiles and electronics. The DR has a low cost and capable labour pool that has proved receptive to adopting new manufacturing skills. The economic performance has been amongst the strongest in Latin America and the Caribbean in recent years. The collapse of one of the Dominican Republic’s major banking groups Banco Intercontinental (Baninter), in May 2003 threw the economy into turmoil. Losses were put at around US$2 billion – equivalent to 15% of the country's gross domestic product or 80% of the government's 2003 budget.

As a result of the Baninter crisis, the previous PRD government agreed to a Stand-By Agreement with the IMF, but this went off track on two ocassions, for the second time in February 2004. In his acceptance speech on 16 August 2004, President Fernandez identified getting back on track with the IMF as the number 1 priority for the country. A letter of intent was signed on 31 January 2005 releasing the first tranche of budgetary support which will amount to $660 million over 28 months. The first and second reviews by the IMF are due to take place in October 2005, which should lead to the second tranche of budgetary support being released under the Stand-By Agreement.

At the beginning of September 2005 the DR ratified a Free Trade Agreement (DR/CAFTA) with the US and the Central American countries. The primary objective is to enhance two-way trade between the DR, the Central American countries and the US, abolishing trade restrictions, easing frontier barriers for merchandise, and promoting fair trade in a duty free zone. Investment opportunities are another major element of the FTA, which includes multiple guarantees and incentives for foreign investors.

The DR is a major recipient of aid from international organisations such as the World Bank, Inter American Development Bank and the EU through Cotonou Agreement funds.

International Relations

The Dominican Republic's Relations with Neighbours

The Dominican Republic has a close relationship with the United States and with other states of the Inter-American system. It has accredited diplomatic missions in most Western Hemisphere countries and in principal European capitals. The Dominican Republic and Cuba have established Consular relations, and there is contact in fields such as commerce, culture, and sports.

Although Dominican relations with its closest neighbour, the Republic of Haiti, have never been extensive, this has begun to change under President Fernandez’s administration. Growing immigration from and political instability in Haiti have forced the Dominican Republic to take a closer look at relations with its neighbour, both bilaterally and in international fora. There is a sizeable Haitian migrant community in the Dominican Republic, and there is a long history of friction between the DR and Haiti over illegal immigration by Haitian agricultural and construction workers. Two recent waves of deportations of Haitians and Dominico-Haitians from the DR, in May and August 2005, have continued to highlight the problem, and raised human rights concerns. Conservative estimates give 500,000 illegal Haitians resident in the DR. There could be as many as a million. Anti Slavery International report that there are in addition to this 40,000 Haitians working (with 60,000 dependants) in the Dominican sugar plantations.

The Dominican Republic's Relations with the International Community

During his previous term in office, President Leonel Fernandez brought the DR back to the international stage, thus ending almost thirty years of self-imposed isolation which the country endured under previous, semi-autocratic regimes. He is seeking to do this again in his second term. Fernandez attended the inauguration of President Chavez of Venezuela during his previous term, and their friendship continues. Chavez visited Santo Domingo on 6 November 2004, and signed an oil purchasing agreement offering the DR $150M of oil on very favourable terms , to help the country cope with its power sector crisis. The Venezuelan and DR leaders signed another agreement offering the DR beneficial oil-purchasing terms at the beginning of September 2005, to help the DR cope with increasing world oil prices. Fernandez's courtship of CARICOM further underlines his objective of playing a key and pivotal role between the English and Spanish-speaking Caribbean. In August 1998, the Dominican Republic hosted a regional CARIFORUM summit during which the Government signed a free trade agreement with CARICOM with the aim of setting up a hemispheric free-trade area by 2005. At a CARIFORUM meeting in the DR in July 2005, the DR publicly asked to be made full members of CARICOM.

The Dominican Republic's Relationship with the United Kingdom

After extensive lobbying from the British business community and in recognition of the great potential of the market, plus growing numbers of UK tourists, the UK re-opened its Embassy in the Dominican Republic (DR) in November 1995, after a gap of over ten years. In 1998, the Embassy was boosted by a second UK-based member of staff as Deputy Head of Mission in support of our developing relations. In May 2003 Baroness Amos paid an official visit to the Dominican Republic as FCO Minister for the Caribbean. This was the first Ministerial visit since the British Embassy reopened in Santo Domingo in 1995.

President Fernandez made a successful first ever Dominican Republic President/President-elect visit to the UK in July 2004, following his election victory in May, an indication that bilateral relations are going from strength to strength. In May 2005 the country's Minster for Exports and Investment, Eddy Martinez, paid a week long visit geared to attracting UK investment to the DR. In September 2005 the DR Foreign Minister, Carlos Morales Troncoso, visited the UK to speak at a conference on Caribbean security at Wilton Park.

Trade and Investment with the UK

The DR is an important market within the Caribbean and represents a small but significant growth market for the UK. The value of exports to the DR in 2003 was 40.43 million.

m199920002001200220032004
UK Exports36.948.3445.1650.9140.4330.68
UK Imports26.6229.6732.1453.4548.8842.30
Balance+10+19+13-3-8-12

Principal UK exports are beverages, clothing, diary products, chemicals and related products, road vehicles and industrial machinery. Principal imports from Dominican Republic are: organic fruits, coffee, tobacco, sugar, clothing and footwear, furniture, gold and silver alloy, ferro-nickel The main trading partners with Dominican Republic are the USA (US$4 billion in both directions) and the European Community.

In addition to promoting industrial investment opportunities in the Industrial Free Zones (IFZs), the DR government also offers substantial incentives for investment in the tourism sector. There are significant opportunities for UK companies to invest in plant or facilities in the tourism industry either individually or on a joint venture basis with local private sector hotel operators.

Agriculture

The traditional export crops were sugar, coffee, cocoa and tobacco, but the country's agricultural sector has moved away from sugar and other traditional crops, with increased production and exports of organic bananas, pineapples, citrus, melons, and mangoes. The government is committed to attracting new investment to this sector.

Tourism

Tourism became a strong growth industry in the 1980s and is playing a major role in the country's development. It is the largest foreign exchange earner. The number of tourists is steadily increasing. The major development areas are the North in Puerto Plata, and along the eastern coast at Punta Cana and Bavaro, and in the south at Bayahibe. The DR continues to invest for the future. There are some 50,000 hotel beds, up from 34,000 in 1996. After an absence of some years, Caribbean cruise ships are again calling at ports in the Dominican Republic. The tourism sector has bounced back following a slow down in 2002 due to the September 11th factor. In 2004 approximately 200,000 British tourists visited the country.

Mining

The mining sector continues significantly to contribute to GDP. For the first half of 2004, the economy's primary sector showed promising development, thanks to the agro and mining sector, which contributed with 4.7%.

The enhanced performance of the mining sector is a result of increases in nickel production (11.2%), marble (10.5%) and plaster (60.4%), other factors contributing to the sector's growth in foreign demand are the increase in the nickel international prices and a higher use of the productive capacity.

Manufacturing

The manufacturing sector comprises two separate subsectors: industries producing for the domestic market, notably sugar and rice milling and production of construction materials. Light manufacturing is contributing an ever more important share of national output, exports and employment.

People

About half of Dominicans live in rural areas; many are small landholders. Haitians form the largest foreign minority group. All religions are tolerated; the state religion is Roman Catholicism.

Nationality: Noun and adjective - Dominican(s)
Annual Growth Rate: 1.33% (2004 est.)
Education: Compulsory years - 6-18. Attendance - 70%. Literacy - 83%.
Work Force: Services and Government - 31% (includes paraestatal corporations); Agriculture - 28%; Industry - 12%; Unemployment - 16%

Health

Infant Mortality rate: 33.28/1000.
Life expectancy: 65.98 years men, 69.35 women (2004 est.)

HIV/AIDS

Adult Prevalence Rate: 1.7% (2003 est.)
People living with HIV/AIDS: 88,000 (2003 est.)
HIV/AIDS deaths: 7,900 (2003 est.)

The Military

The military consists of about 24,000 active duty personnel, commanded by the President. Its principal mission is to defend the nation, but it serves more as an internal security force. The army, twice as large as the other services combined, consists of four infantry brigades and a combat support brigade; the airforce operates three flying squadrons; and the navy maintains 30 ageing vessels. The Dominican Republic's military is second in size to Cuba's in the Caribbean. The armed forces participate fully in counter-narcotics efforts. They are also active in efforts to control contraband and illegal immigration from Haiti to the Dominican Republic and from the Dominican Republic to the United States.

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