The brand-new 27-storey Acropolis tower is the latest addition to the rising skyline of Santo Domingo, the Dominican Republic’s capital. Headquarters to the US giant Citibank and a cluster of other financial firms, the building looms over a glitzy 20,000-square-metre shopping mall in which consumers are tempted by fashion and jewellery stores as well as a dozen fast-food outlets. The complex dominates the modern commercial district, an area where luxury-car showrooms and US-style supermarkets testify to the Dominican Republic’s recent economic ‘miracle’ and its fledgling consumer culture.
For most of the 1990s the Dominican economy outstripped the rest of Latin America. Ever more integrated with the US in trade and investment, the Dominican Republic abandoned archaic sugar plantations in favour of tourism and free-trade zones.
In 47 special industrial parks, over 200,000 Dominicans stitch garments or assemble electrical goods for the US market, while 50,000 hotel rooms – the highest number in the Caribbean – await American and European visitors. Conversely, an estimated one million Dominicans live and work in the US, sending regular payments worth two billion dollars a year home to their families.
Photo: David Ransom
Such was the optimism in the economy after a decade of growth that the Government organized the flotation of a $500-million bond in 2001, aiming to attract foreign investors with the prospect of guaranteed returns. Fresh debts were contracted, as the authorities pledged to modernize education and revamp the country’s infrastructure. Low inflation and a stable currency even encouraged some to dream of adopting the US dollar in place of the peso.
But 2001 showed that integration with the powerful northern neighbour carried risks as well as rewards. As the US economy began to slow, orders for textiles dwindled and tourists began to cancel. Then came the events of 11 September. Over 40 Dominicans were killed in the attacks, but hundreds of thousands more in New York and elsewhere faced the risk of losing their jobs – and the money to send cheques home – in the economic aftershock. Then, weeks later, an American Airlines plane, bound for Santo Domingo and full of Dominicans, crashed. It was a human tragedy and another blow for the beleaguered tourism industry.
Whether the Dominican Republic faces long-term damage or merely a short-term dip in its growth chart remains to be seen. The Government hopes that US investors will pull out of Bangladesh and Pakistan and open low-wage textile factories closer to home.
There is also evidence that nervous American tourists will sooner or later opt for the Caribbean as more secure than other destinations. But critics warn that the country borrowed money at exactly the wrong moment, that another 1980s-style debt crisis is in the making.
Meanwhile, the estimated 25 per cent of Dominicans who live below the official poverty line have gained little from the growth of the 1990s. Dilapidated villages and dusty towns reveal a very different country from that of Santo Domingo’s financial quarter, while the capital’s slums are worlds apart from the Acropolis tower.
The present government was elected on a promise to share the benefits of economic success more fairly, and with congressional elections due in May 2002 it is keen to be seen to deliver. The official line remains resolutely optimistic. But as recent events have shown, the Dominican Republic, like other small players in the global economy, is especially vulnerable in uncertain times.
Leader: President Hipólito Mejía.
Economy: GNP per capita $2,080 (Haiti $460, US $30,600).
Monetary unit: peso.
Main exports: Garments, ferro-nickel, sugar, cocoa.
Main sources of income are tourism, remittances from Dominicans overseas and latterly privatization proceeds.
People: 8.6 million. People per square km 177 (Britain 238). An estimated one million Dominicans live and work in the US, many as illegal immigrants. Emigration to Europe is also on the rise.
Health: Infant mortality 43 per 1,000 live births (Cuba 6, Haiti 83). Water and electricity supplies are still unreliable and even non-existent in urban slum areas and remote rural districts. Malaria and dengue are endemic in the Haitian border region, while hiv rates are above the regional average.
Environment: The rainforest has been savaged by illegal logging, but the Government is attempting major reforestation. Much mangrove has been lost to tourism development.
Culture: Spanish colonizers mixed with African slaves to produce a majority mestizo population. The US plays a dominant political and cultural role, but links with Spain and Latin America are strong. Anti-Haitian prejudice is rife at all levels of Dominican society.
Religion: 90% Roman Catholic. The Church is less influential than in other Latin American countries, and some Dominicans follow African-influenced animist religions.
Language: Spanish (Creole is common on the border with Haiti).
Sources: State of the World’s Children 2001; World Bank; IMF; Caribbean Development Bank 2001; Dominican Republic One.
Last profiled in June 1991
After decades of electoral malpractice and 'strongman' rule, the country is getting used to democratic government. The long overdue modernization of Dominican politics has raised expectations of radical reform that the pro-business Mejía administration is finding hard to satisfy. Caught between its own supporters who want quick improvements to living standards and foreign investors who insist on a low-wage economy, the Government is likely to prioritize the latter. At its own risk.