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WEEKLY NEWSLETTER
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Dominican Republic
Index
The Plaza del Mercado, Puerto Plata, ca 1873
LONG DEPENDENT ON SUGAR, the Dominican Republic
diversified
its economy during the 1970s and the 1980s to include
mining,
assembly manufacturing, and tourism. In 1987, the
country's gross
domestic product
(GDP--see Glossary)
was approximately
US$5.6
billion, or roughly US$800 per capita, which made the
island
nation the third poorest state in Latin America. A
lower-middle-
income country by
World Bank (see Glossary)
standards, the
Dominican Republic depended on imported oil and, despite
diversification, retained its historical vulnerability to
price
fluctuations in the world sugar market. Although poverty
continued to be acute for many rural citizens in the
1980s, the
economy had progressed significantly since the 1960s.
Beginning in the late 1960s, the Dominican economy
began the
arduous task of diversifying away from sugar. By 1980 the
mining
industry had become a major foreign exchange earner;
exports of
gold, silver, ferronickel, and bauxite constituted 38
percent of
the country's total foreign sales. In the 1980s, the
assembly
manufacturing industry, centered in
Industrial Free Zones (see Glossary),
began to dominate industrial activity. During
this
decade, the number of people employed in assembly
manufacturing
rose from 16,000 to nearly 100,000, and that sector's
share of
exports jumped from 11 percent to more than 33 percent.
Tourism
experienced a similarly dramatic expansion during the
1980s, when
the number of hotel rooms quadrupled. Revenues from
tourism
surpassed sugar earnings for the first time in 1984, and
by 1989
total foreign exchange earnings from tourism nearly
matched
earnings from all merchandise exports.
Despite indisputable advances, by 1990 the country also
faced
serious inflation, chronic balance-of-payments deficits,
and a
large foreign debt. More important, whereas the Dominican
Republic had made great strides since the dictatorial rule
of
Rafael LeĆ³nidas Trujillo Molina (1930-61), the nation's
political
economy continued to be strongly influenced by patronage,
graft,
and a lingering lack of political will to confront the
traditional institutions that continued to restrain
economic
performance.
Data as of December 1989
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