Dominican Republic

In 1844, the part of Hispaniola that was known as Santo Domingo obtained its sovereignty under the name of the Dominican Republic. Years of mostly unrepresentative regime and the leadership of the dictator Rafael Leonidas TRUJILLO followed. In 1962 Juan BOSCH became president but was overthrown in a military coup. Joaquin BALAGUER won the 1966 elections and retained control for 30 years; he left office in 1996 after the international reaction to his faulty elections. The country has since been undergoing regular democratic elections with opposition parties actually winning the presidential seat. In 2004, Leonel FERNANDEZ became president for the second time, after the law was changed to allow a candidate to serve as president more than once.

Main Airports

Puerto Plata International Airport (POP) (Internacional General Gregorio Luperón), Punta Cana International Airport (PUJ), Santo Domingo (SDQ) (Internacional de las Américas)

U.S. Embassy

Calle César Nicolas Penson and Calle Leopoldo Navarro, Gazcué District, Santo Domingo
tel. 809-221-2171

Statistics

GDP: purchasing power parity:

$63.73 billion (2005 est.)

GDP - real growth rate:

9.3% (2005 est.)

GDP - per capita: purchasing power parity:

7,000 (2005 est.)

Inflation rate (consumer prices):

4.2% (2005 est.)

Labor force:

2.3 million-2.6 million (2000 est.)

Exports:

$5.818 billion f.o.b. (2005 est.)

Exports - partners:

US 79.9%, Netherlands 2.4%, Canada 1.8% (2005)

Imports:

$9.747 billion f.o.b. (2005 est.)

Imports - partners:

US 51%, Colombia 5.4%, Mexico 5.3% (2005)

Population:

9,183,984 (July 2006 est.)

Population growth rate:

1.47% (2006 est.)

Population Below Poverty Line:

25%

Major Industries:

tourism, sugar processing, ferronickel and gold mining, textiles, cement, tobacco

Employing Workers: 127*

Registering Property: 126*

Enforcing Contracts: 108*

Closing a Business: 142*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Dominican Rep.	Region
Procedures (number)	10	10.2
Time (days)	73	73.3

Dominican Rep. Risk Assessment

Country Rating

Rating: B

Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behaviour. Corporate default probability is appreciable.

Risk Assessment

After the catch-up process in recent years resulting from the bank crisis of 2003, economic growth should be less brisk in 2008 due notably to the economic slowdown in the United States, the country's number one trading partner. Domestic demand should nonetheless be the main growth engine. With the high price of oil and the reconstruction needed to repair the damage done by the hurricanes late last year, maintaining prudent monetary and fiscal policy will not be a simple matter. It will, however, have to stay within the framework of the confirmation agreement renewed with the IMF early this year.

There has been notable, albeit precarious, improvement in public finances with the public debt declining in relation to GDP, down to 40 per cent in 2007. The real challenge will be to persevere with the fiscal consolidation during an electoral period as this year. The country has benefited, meanwhile, from the high nickel prices along with large revenues from tourism and expatriate remittances. The coming into force in 2007 of the DR-CAFTA, the free trade agreement between the Dominican Republic, Central America and the United States should give rise to additional inflows of foreign direct investment. After the rescheduling granted by the Paris Club public creditors and the London Club private creditors in 2005, foreign debt ratios have continued to improve thanks to strong growth. The country's other recent achievements moreover include financial system consolidation, the strengthening of bank regulation and oversight, and the central bank recapitalisation, which should bolster its independence and credibility.

The country remains nonetheless dependent on oil imports that weigh on external accounts despite the preferential accords concluded with Venezuela. Textile and shoe exports from customs free zones have suffered meanwhile from Chinese competition. In a turbulent international environment, relying on short-term financing to cover part of the current account deficit will be more costly. And cumbersome bureaucracy and widespread corruption highlight the public sector's ineffectiveness. Progress has been made, however, in distributing electricity, with reducing fraud, and renegotiating long term contracts.

In this context, most of the population has not benefited from the fruits of the economic expansion, which has heightened social tensions and in some ways the level of insecurity. Reforms thus remain necessary but making progress will be difficult in the run-up to the presidential election mid-2008, which should result in the re-election of the incumbent Leonel Fernandez (of the centre-left PLD).

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