|
|
|
|
Map of Central America |
CIAO DATE: 2/00
Dominican Republic Alert: Leading the World from the Caribbean: the Dominican Republic
Hemisphere Focus: 1998-2000
July 1999
Overview
Introduction
The Dominican Republic now leads the world in economic growth. Who would have thought this possible?
It was not all that long ago that the Dominican Republic was best known for its bloody tyrants (Trujillo), its many coups d’etat, a revolution in 1965 that led to U.S. military intervention, and (on the positive side) Sammy Sosa and numerous big-league shortstops. But now the Dominican Republic has surpassed South Korea, Taiwan, and the other high-flying “tigers” of economic growth to reach the position of Numero Uno.
Moreover, the record-setting economic growth (7-8%) has now been sustained over a three-year period. Nothing this good has ever happened to the Dominican Republic in its entire 155-year history. It may be hard for Americans, who perceive themselves to be Number One in everything, to imagine what it is like when a former “banana republic” (in this case sugar), suddenly becomes a world-class leader.
The Dominican Republic is riding high; its miracle growth rates have made it a country to be taken seriously for the first time. The Dominican national psyche is aglow—comparable, let us say, to one of its winter-league teams miraculously winning the World Series.
Engines of Growth
The main engines of the Dominican Republic’s phenomenal growth have been tourism, remittances, construction, telecommunications, and the free-zone assembly plants. Only a generation ago the Dominican Republic’s export economy was dominated (80%) by sugar. Now sugar accounts for less than 5% of exports; a more modern, dynamic, diversified economy has replaced the old monoculture. In addition, the Dominican Republic’s privatization (called “capitalization”) campaign has been a major success.
The signs of change are everywhere. Santo Domingo, once a sleepy backwater town, is now a mushrooming metropolis with vast new middle-class suburbs. The Caribbean’s largest shopping mall, patterned after those in dynamic Miami, is being built in the working-class neighborhoods, east of the Ozama River. Vast new construction projects are cutting into the coral rock that lies just below the surface topsoil; new apartments, office complexes, and manufacturing plants are piercing the skyline. Huge cruise ships and jumbo aircraft disgorge hundreds of passengers at a time into the country’s port cities and the many new airports that dot the island’s perimeter.
In my travels and conversations around the island I did not find a single Dominican who did not have a son, daughter, cousin, or uncle in the United States—all sending back remittances, traveling back and forth, or establishing a nest egg in the U.S. and then opening a small business in the DR. All the planes are full and 80% of the passengers are Dominican. The Dominican Republic has become a truly transnational community with about one million of its eight million people now living in the U.S.
The economic quickening affects the entire country, more money is circulating, and jobs are being created at an unprecedented level—and no longer just cutting cane. There is more dynamism, energy, and movimiento in the Dominican economy and society than ever before in the nation’s history. In my 37 years of visiting, traveling in, and studying the country, I have never seen the Dominican Republic look so good or feel so optimistic.
Of course there are vast social problems remaining. The miracle growth rates of the last three years may not be sustained. The country’s educational system is woefully inadequate for the globalized economy that the Dominican Republic is becoming. Crime, violence, and drug trafficking are on the increase—but the problems in the Dominican Republic are nowhere near the level of Haiti, Jamaica, or some Central American countries. Population increase, though reduced, threatens to neutralize the impressive economic gains made—if it were not for the huge “safety valve” of emigration to the U.S. In addition, many rural areas and provinces close to the Haitian border have not significantly benefitted from the new growth, and poverty still afflicts some 60-70% of the Dominican population. But the Dominican Republic seems determined not to repeat the mistakes of other Latin American countries of ignoring the poor and their social problems and the vast social and racial gaps that exist. Instead, the DR is determined to tackle its social inequalities even while avoiding steps that would cut off the current boom.
The undoubted success of the Dominican Republic forces the longtime visitor to consider what it it is that causes such growth. What gets growth started and helps sustain it? The answers seem not to lie in the grand theories of Marx (“feudalism” to “capitalism”) nor for that matter of W.W. Rostow (the “stages” of economic growth). Rather, change in the Dominican Republic has come slowly, sporadically, and over a long time, almost imperceptibly at times, and without any grand design or single cause. It has come as a result of more money circulating, increased remittances, new investment, new crops, better roads, more travel and the opportunities to emulate other countries, education, a new job here, a new idea there, construction, investment, new foreign aid, greater efficiency, a stable political system, a more open and less restrictive economy, television and mass media—bits and pieces of incremental growth that eventually become like a river, self-sustaining and permanent. And these in turn stimulate larger changes (mammoth tourism, free zones, larger investments, infrastructure growth, more travel, greater stability and self-confidence) which also gives rise to vast new social changes: urbanization, greater social mobility, a larger and more solid middle class, new business entrepreneurs. Over time the entire society is transformed.
Democratic Prospects
These vast economic and social changes are also shaping, and themselves being affected by, transformations in the political system. For most of its history, in the absence of a strong economy, institutions, or civil society, the Dominican Republic alternated between chaos and authoritarianism. Over the last forty years, two rival civilian caudillos, both sophisticated men-of-letters, Juan Bosch, the novelist and Joaquín Balaguer, the lawyer and historian, dominated national political life. Now both are in their 90s and past their primes—although Balaguer, recently back from a hospital in Texas where, as a Dominican put it, he had his “arteries cleaned out” and appears remarkably rejuvenated, is talking of running for the presidency again. A third “caudillo,” José Francisco Peña Gomez, died of cancer.
Now a new generation is coming to power, led by the Dominican Republic’s dynamic young President Leonel Fernández. Leonel, as he is universally known, grew up in both New York and Santo Domingo, is what is popularly called a “Dominican York”—bright, personable, quick, good on television, a former university professor, and at home in both U.S. and Dominican cultures. Formerly occupying a nationalist—left position, he, like Cardoso in Brazil, gravitated to the center and has become a strong apostle for democracy, pragmatism, social justice, and globalization. Starting as a youth leader in his party, Fernández rose in the ranks, secured his party’s nomination, and in a major upset won the presidency in 1996.
However, Fernández lacked a working majority in congress and his early initiatives were often frustrated by the strong opposition parties. Early in his administration Fernández probably made a mistake by not—as Bill Clinton did—using his telegenic personality, and the bully-pulpit of the presidency to go over congress’ head directly to the Dominican people. In 1998, his party suffered further setbacks in off-year local and congressional elections, and for a time the disappointed Fernández went into a funk, failed to engage the public, and offered some criticisms of democracy that were entirely inappropriate.
Now both he and the economy (the two are interrelated) have recovered gloriously. Fernández has put the Dominican Republic on the map both because of his extensive international travels and as the host of numerous important conventions in Santo Domingo. Everyone agrees his privatization campaign has been a major success. He has deftly ameliorated the conflicts between the political parties that threatened to become vituperative, resolved complex questions involving the Electoral Junta and the Municipal League, began a national dialogue including the public and private sectors, and emerged as a statesman. The Dominican economic miracle will shower additional political benefits on his head. Who wouldn’t like to run for reelection (look at Bill Clinton’s claims in 1996 to having fostered the American economic recovery) on the basis of having achieved the world’s highest economic growth rates?
Outlook
The challenge for Fernández is that the Dominican constitution prohibits reelections to a second consecutive term. And unlike Cardoso in Brazil, Carlos Menem in Argentina, or Alberto Fujimori in Peru, all of whom engineered constitutional revisions to overcome reelection barriers, Fernández has insufficient party support in the congress to even contemplate such a move. So his current strategy is to rise above the partisan fray, present himself as a statesman and consensus-builder, enhance support among all constituencies, and wait until the year 2004 when he will be eligible for a second term. As a young president still in his 40s, Fernández can afford to wait.
Meanwhile the country’s three main parties—the Dominican Revolutionary Party (PRD), the Reformist Social Christian Party (PRSC), and Leonel’s own Liberation Party (PLD)—all seem prepared to nominate centrist, moderate, pragmatic candidates for the 2000 election who will continue the growth policies of the present government, moderated by social justice, and within a solidly democratic context. It may be that the age of the caudillos is finally over in the Dominican Republic. And that the country has made a successful and permanent transition to democracy, freedom, pluralism, open markets, and-do not let us forget-the world’s highest economic growth rates. Of course there maybe new bumps in the road and the next administration may not be as forward-looking as the present, but it just may be that the Dominican Republic, at long last, has made it over the hump to stable, self-sustained growth.
Email this citation