Economy
Main article: Economy of the Dominican Republic See also: Dominican PesoThe Dominican Republic has the second largest economy (the largest, according to the U.S. State Department) in Central America and the Caribbean. It is an upper middle-income developing country, with a 2007 GDP per capita of $9,208, in PPP terms, which is relatively high in Latin America. In the trimester of January–March 2007 it experienced an exceptional growth of 9.1% in its GDP, which was actually below the previous year's 10.9% in the same period. Growth was led by imports, followed by exports, with finance and foreign investment the next largest factors.
The Dominican Republic is primarily dependent on natural resources and government services. Although the service sector has recently overtaken agriculture as the leading employer of Dominicans (due principally to growth in tourism and Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is in second place, behind mining, in terms of export earnings. The service sector in general has experienced growth in recent years, as has construction. Free Trade Zone earnings and tourism are the fastest-growing export sectors. Real estate tourism alone accounted for $1.5 billion in earnings for 2007. Remittances from Dominicans living abroad amounted to nearly $3.2 billion in 2007.
Economic growth takes place in spite of a chronic energy shortage, which causes frequent blackouts and very high prices. Despite a widening merchandise trade deficit, tourism earnings and remittances have helped build foreign exchange reserves. The Dominican Republic is current on foreign private debt.
Following economic turmoil in the late 1980s and 1990, during which the gross domestic product (GDP) fell by up to 5% and consumer price inflation reached an unprecedented 100%, the Dominican Republic entered a period of growth and declining inflation until 2002, after which the economy entered a recession.
This recession followed the collapse of the second-largest commercial bank in the country, Baninter, linked to a major incident of fraud valued at $3.5 billion, during the administration of President Hipólito Mejía (2000–2004). The Baninter fraud had a devastating effect on the Dominican economy, with GDP dropping by 1% in 2003 as inflation ballooned by over 27%. All defendants, including the star of the trial, Ramon Baez Figueroa, were convicted. One subpoena was not delivered because the United States denied extradition.
According to the 2005 Annual Report of the United Nations Subcommittee on Human Development in the Dominican Republic, the country is ranked No. 71 in the world for resource availability, No. 79 for human development, and No. 14 in the world for resource mismanagement. These statistics emphasize national government corruption, foreign economic interference in the country, and the rift between the rich and poor.
The country has a noted problem of child labor in its coffee, rice, sugarcane, and tomato industries. The labor injustices in the sugarcane industry extends to forced labor according to the U.S. Department of Labor
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Famous quotes containing the word economy:
“Even the poor student studies and is taught only political economy, while that economy of living which is synonymous with philosophy is not even sincerely professed in our colleges. The consequence is, that while he is reading Adam Smith, Ricardo, and Say, he runs his father in debt irretrievably.”
—Henry David Thoreau (1817–1862)
“Unaware of the absurdity of it, we introduce our own petty household rules into the economy of the universe for which the life of generations, peoples, of entire planets, has no importance in relation to the general development.”
—Alexander Herzen (1812–1870)
“The aim of the laborer should be, not to get his living, to get “a good job,” but to perform well a certain work; and, even in a pecuniary sense, it would be economy for a town to pay its laborers so well that they would not feel that they were working for low ends, as for a livelihood merely, but for scientific, or even moral ends. Do not hire a man who does your work for money, but him who does it for love of it.”
—Henry David Thoreau (1817–1862)