Dominican Republic

The Dominican Republic is a Caribbean representative democracy which enjoyed rapid economic growth of more than 7% between 1998 and 2000, marking it out among the fastest growing economies in the region. Since then, the economy has slowed considerably on the back of the global economic slowdown and domestic factors. Output shrunk in 2003, with reduced tourism, a banking crisis, and limited growth in the US economy, the source of 87% of export revenues.

With the economy still reeling, 2004 proved little better but elections did spell new momentum to reform measures. Encouragingly, the International Monetary Fund has committed funding to support reform – a tentative endorsement of government’s plans. However, numerous challenges remain, not least reform of the electricity sector where a shortage of generating capacity has led to sporadic blackouts across the country.

Although the Dominican Republic has long been viewed primarily as an exporter of sugar, coffee, and tobacco, in recent years the service sector has overtaken agriculture as the economy’s largest employer, due to growth in tourism and free trade zones.