Background Notes: Dominican Republic, March 1998

Released by the Bureau of Inter-American Affairs.

PROFILE

Geography

Area: 48,442 sq. km. (18,704 sq. mi.), about the size of Vermont and New Hampshire combined.
Cities: Capital--Santo Domingo (pop. 2.4 million). Other city--Santiago de los Caballeros (500,000).
Terrain: Mountainous.
Climate: Maritime tropical.

People

Nationality: Noun and adjective--Dominican(s).
Population (1995): 7.9 million.
Annual growth rate: 2%.
Ethnic groups: European 16%, African origin 11%, mixed 73%.
Religion: Roman Catholic 95%.
Language: Spanish.
Education: Years compulsory--6. Attendance--70%. Literacy--83%.
Health: Infant mortality rate--54/1,000. Life expectancy--65 years for men, 70 years for women.
Workforce: Services and government--31% (includes parastatal corporations), Agriculture--28%, Industry--12%.
Unemployment--approximately 16%.

Government

Type: Representative democracy.
Independence: February 27, 1844.
Constitution: November 28, 1966.
Branches: Executive--president (chief of state and head of government, vice president, cabinet. Legislative--bicameral Congress (Senate and Chamber of Deputies). Judicial--Supreme Court of Justice.
Subdivisions: 29 provinces and the National District of Santo Domingo.
Political parties: Social Christian Reformist Party (PRSC), Dominican Revolutionary Party (PRD), Dominican Liberation Party (PLD), and several others.
Suffrage: Universal and compulsory, over 18 or married.

Economy (1996)

GDP: $12.4 billion.
Growth rate (1995): 7.3%.
Per capita GDP: $1,600.
Non-fuel minerals (3% of GDP): Nickel, gold, silver.
Agriculture (13% of GDP): Products--sugar, coffee, cocoa, bananas, tobacco, rice, plantains, beef, flowers.
Industry (24% of GDP): Types--sugar refining, pharmaceuticals, cement, light manufacturing, construction; services, including off-shore assembly operations (esp. textiles); and transportation--60% of GDP.
Trade: Exports (excluding processing zones)--$561 million: sugar, coffee, gold, silver, ferronickel, cacao, tobacco, meats. Markets--U.S. (65%), Netherlands. Imports--$2.2 billion: foodstuffs, petroleum, industrial raw materials, capital goods. Suppliers--U.S. (65%), Japan, Germany, Venezuela, Mexico.
Exchange rate: U.S. $1 = RD $14.

PEOPLE

About half of Dominicans live in rural areas; many are small landholders. Haitians form the largest foreign minority group. All religions are tolerated; the state religion is Roman Catholicism.

HISTORY

The island of Hispaniola, of which the Dominican Republic forms the eastern two-thirds and Haiti the remainder, was originally occupied by Tainos, an Arawak-speaking people. The Tainos welcomed Columbus in his first voyage in 1492, but subsequent colonizers were brutal, reducing the Taino population from about 1 million to about 500 in 50 years. To ensure adequate labor for plantations, the Spanish brought African slaves to the island beginning in 1503.

In the next century, French settlers occupied the western end of the island, which Spain ceded to France in 1697, and which, in 1804, became the Republic of Haiti. The Haitians conquered the whole island in 1822 and held it until 1844, when forces led by Juan Pablo Duarte, the hero of Dominican independence, drove them out and established the Dominican Republic as an independent state. In 1861, the Dominicans voluntarily returned to the Spanish Empire; in 1865, independence was restored.

Economic difficulties, the threat of European intervention, and ongoing internal disorders led to a U.S. occupation in 1916 and the establishment of a military government in the Dominican Republic. The occupation ended in 1924, with a democratically elected Dominican Government.

In 1930, Rafael L. Trujillo, a prominent army commander, established absolute political control. Trujillo promoted economic development--from which he and his supporters benefitted--and severe repression of domestic human rights. Mismanagement and corruption resulted in major economic problems. In August 1960, the Organization of American States (OAS) imposed diplomatic sanctions against the Dominican Republic as a result of Trujillo's complicity in an attempt to assassinate President Romulo Betancourt of Venezuela. These sanctions remained in force after Trujillo's death by assassination in May 1961. In November 1961, the Trujillo family was forced into exile.

In January 1962, a council of state that included moderate opposition elements with legislative and executive powers was formed. OAS sanctions were lifted January 4, and, after the resignation of President Joaquin Balaguer on January 16, the council under President Rafael E. Bonnelly headed the Dominican Government. In 1963, Juan Bosch was inaugurated President. Bosch was overthrown in a military coup in September 1963.

Another military coup, on April 24, 1965, led to violence between military elements favoring the return to government by Bosch and those who proposed a military junta committed to early general elections. On April 28, U.S. military forces landed to protect U.S. citizens and to evacuate U.S. and other foreign nationals. Additional U.S. forces subsequently established order.

In June 1966, President Balaguer, leader of the Reformist Party (now called the Social Christian Reformist Party--PRSC), was elected and then re-elected to office in May 1970 and May 1974, both times after the major opposition parties withdrew late in the campaign.

In the May 1978 election, Balaguer was defeated in his bid for a fourth successive term by Antonio Guzman of the PRD. Guzman's inauguration on August 16 marked the country's first peaceful transfer of power from one freely elected president to another.

The PRD's presidential candidate, Salvador Jorge Blanco, won the 1982 elections, and the PRD gained a majority in both houses of Congress. In an attempt to cure the ailing economy, the Jorge administration began to implement economic adjustment and recovery policies, including an austerity program in cooperation with the International Monetary Fund (IMF). In April 1984, rising prices of basic foodstuffs and uncertainty about austerity measures led to riots.

Balaguer was returned to the presidency with electoral victories in 1986 and 1990. Upon taking office in 1986, Balaguer tried to reactivate the economy through a public works construction program. Nonetheless, by 1988 the country slid into a two-year economic depression, characterized by high inflation and currency devaluation. Economic difficulties, coupled with problems in the delivery of basic services--e.g., electricity, water, transportation--generated popular discontent that resulted in frequent protests, occasionally violent, including a paralyzing nationwide strike in June 1989.

In 1990, Balaguer instituted a second set of economic reforms. After concluding an IMF agreement, balancing the budget, and curtailing inflation, the Dominican Republic is experiencing a period of economic growth marked by moderate inflation, a balance in external accounts, and a steadily increasing GDP.

The voting process in 1986 and 1990 was generally seen as fair, but allegations of electoral board fraud tainted both victories. A commission of electoral advisers, designated by President Jorge and led by the Archbishop of Santo Domingo, played an important role in keeping the electoral process on track. The elections of 1994 were again marred by charges of fraud. Following a compromise calling for constitutional and electoral reform, President Balaguer assumed office for an abbreviated term. In June 1996, Leonel Fernandez Reyna was elected to a four-year term as president.

GOVERNMENT AND POLITICAL CONDITIONS

The Dominican Republic is a representative democracy whose national powers are divided among independent executive, legislative, and judicial branches.

The president appoints the cabinet, executes laws passed by the legislative branch, and is commander in chief of the armed forces. The president and vice president run for office on the same ticket and are elected by direct vote for four-year terms.

Legislative power is exercised by a bicameral congress--the senate (30 members) and the chamber of deputies (120 members). Presidential elections are held in years evenly divisible by four. Congressional and municipal elections are held in even numbered years not divisible by four.

Under the constitutional reforms negotiated after the 1994 elections, the 16-member Supreme Court of Justice is appointed by a National Judicial Council, which is nominated by the three major political parties. The Court has sole jurisdiction over actions against the president, designated members of his cabinet, and members of Congress. The Supreme Court hears appeals from lower courts and chooses members of lower courts.

Each of the 29 provinces is headed by a presidentially appointed governor. Elected mayors and municipal councils administer the National District (Santo Domingo) and the 103 municipal districts.

The Dominican Republic has a multi-party political system with national elections every four years. In two rounds of presidential elections in 1996, nearly 80% of eligible Dominican voters went to the polls.

The leading parties in 1994 were the PRSC, linked to the International Christian Democratic political movement, whose candidate was President Joaquin Balaguer; the PRD, affiliated with the Socialist International, whose candidate was Jose Francisco Pena Gomez; and the Dominican Liberation Party (PLD), whose candidate was former President Juan Bosch.

On election day, international observers noted many irregularities in the voter lists, and the opposition PRD immediately charged the Central Electoral Board and the PRSC with fraud. A Verification Commission appointed by the Central Electoral Board, however, did not accept the PRD's charges. By all estimates, total disenfranchised voters far exceeded the 22,281-vote margin of victory in favor of President Balaguer on August 2, 1994.

Following an intense period of political activity, the competing political parties signed a Pact for Democracy on August 10, reducing President Balaguer's term of office from four to two years, setting early elections, and reforming the constitution. A new Central Electoral Board was named to work on electoral reform. The main candidates in 1996 were Vice-President Jacinto Peynado (PRSC); Jose Francisco Pena Gomez (PRD); and Leonel Fernandez (PLD).

Domestic and international observers saw the 1996 election as transparent and fair. After the first round in which Jacinto Peynado (PRSC) was eliminated, President Balaguer endorsed the PLD candidate. Results in the second round, 45 days later on June 30, were tabulated quickly, and although the victory margin was narrow (1.5%), it was never questioned. The transition from incumbent administration to incoming administration was smooth and ushered in a new, modern era in Dominican political life.

Fernandez' political agenda is one of economic and judicial reform. He is enhancing Dominican participation in hemispheric affairs, such as the Organization of American States and the follow up to the Miami Summit.

The military consists of about 24,000 active-duty personnel, commanded by the president. Its principal mission is to defend the nation, but it serves more as an internal security force. The army, twice as large as the other services combined, consists of four infantry brigades and a combat support brigade; the air force operates three flying squadrons; and the navy maintains 30 aging vessels. The Dominican Republic's military is second in size to Cuba's in the Caribbean.

The armed forces participate fully in counternarcotics efforts. They are also active in efforts to control contraband and illegal immigration from Haiti to the Dominican Republic and from the Dominican Republic to the United States.

Principal Government Officials

President--Leonel FERNANDEZ Reyna
Foreign Minister--Eduardo La Torre
Ambassador to the United States--Bernardo Vega
Ambassador to the United Nations--Jose Castillo (designated)
Ambassador to the OAS--Flavio Dario ESPINAL

The Dominican Republic maintains an embassy in the United States at 1715 22d Street NW, Washington, DC 20008 (tel. 202-332-6280).

ECONOMY

The Dominican Republic is a middle-income developing country primarily dependent on agriculture, trade, and services, especially tourism. 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. Tourism accounts for more than $1 billion in annual earnings. Free Trade Zone earnings and tourism are the fastest-growing export sectors. Remittances from Dominicans living in the United States are estimated to be about $1.1 billion per year.

Following economic turmoil in the late 1980s and 1990, during which the GDP fell by up to 5% and consumer price inflation reached an unprecedented 100%, the Dominican Republic entered a period of moderate growth and declining inflation. GDP in 1995 grew by 4.5% while the inflation rate was 9%. Data for 1996 showed inflation falling to an annualized rate of 4% and GDP growth at about 7.3%.

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, and has agreed to pay arrears of about $130 million to the U.S. Department of Agriculture's Commodity Credit Corporation.

The government faces several economic policy challenges: high real interest rates, fiscal imbalances caused by money-losing public enterprises and poor tax-collection rates, and reducing dependence on taxes on international trade. Years of tariff protection for domestic production have left the economy vulnerable in a rapidly integrating global economy. The deteriorating non-free trade zone merchandise trade balance is in part due to the failure of the exchange rate to reflect inflationary trends in the 1993-95 period.

FOREIGN RELATIONS

The Dominican Republic has a close relationship with the United States and with the other states of the Inter-American system. It has accredited diplomatic missions in most Western Hemisphere countries and in principal European capitals. The Dominican Republic and Cuba recently established consular relations, and there is contact in fields such as commerce, culture, and sports. Dominican relations with its closest neighbor, the Republic of Haiti, have never been extensive. There is a sizeable Haitian migrant community in the Dominican Republic.

The Dominican Republic belongs to the UN and many of its specialized and related agencies, including the World Bank, International Labor Organization, International Atomic Energy Agency, and International Civil Aviation Organization. It is also a member of the OAS, the Inter-American Development Bank, and INTELSAT.

U.S.-DOMINICAN REPUBLIC RELATIONS

The U.S. has a strong interest in a democratic, stable, and economically healthy Dominican Republic. Its standing as the largest Caribbean economy, the second-largest in terms of population and landmass, and its proximity to the United States and other smaller Caribbean nations make the Dominican Republic an important partner in hemispheric affairs. This close relationship was underscored when President Fernandez joined President Clinton at the summit with Central American leaders in May 1997 in Costa Rica.

U.S. relations with the Dominican Republic are excellent, and the U.S. has been an outspoken supporter of that country's democratic and economic development. In addition, the Dominican Government has been supportive of many U.S. initiatives in the United Nations and related agencies. The two governments cooperate in the fight against the traffic in illegal substances. The Dominican Republic has worked closely with U.S. law enforcement officials on issues such as the return of stolen cars to the U.S. and reducing illegal migration. The U.S. also supports the current administration's efforts to open the economy to more trade, increase foreign private investment, privatize state-owned firms, and modernize the tax system.

Bilateral trade is important to both countries, and U.S. firms--mostly apparel, footwear, and light electronics manufacturers--account for much of the foreign private investment in the Dominican Republic. U.S. exports to the Dominican Republic in 1996 totaled $3.8 billion and constituted 65% of that country's imports. The Dominican Republic exported $3.7 million to the U.S. in 1996, equaling some 65% of its exports. NAFTA has not caused any profound changes in Dominican trade with the U.S. The U.S. embassy works closely with U.S. business firms and Dominican trade groups, both of which can take advantage of the new opportunities in this growing market. At the same time, the embassy is working with the Dominican Government to resolve outstanding disputes U.S. firms have with the government as result of actions by previous administrations.

The embassy counsels U.S. firms through its written Country Commercial Guide and informally via meetings with businesspersons planning to or already investing in the Dominican Republic. It is a challenging business environment for U.S. firms, although agile exporters and investors can profit doing business in the Dominican Republic.

The U.S. Agency for International Development (USAID) mission is focused on four areas: availability of health care, increasing economic opportunity, improving participation in democratic processes, and environmentally sound energy production. About 90% of USAID resources are channeled through non-governmental organizations for reasons of efficiency.

The embassy estimates that 60,000 U.S. citizens live in the Dominican Republic although precise figures are unavailable; many are dual nationals. An important element of the relationship between the two countries is the more than 1 million Dominicans residing in the U.S. The majority of Dominicans live in metropolitan New York City.

Principal U.S. Officials

Ambassador--vacant
Deputy Chief of Mission/Acting Charge d'Affaires--Linda Watt
USAID Mission Director--Marilyn Zak
Consul General--Edwin Cubbison
Economic/Political Counselor--Paul Larsen
Public Affairs Adviser (USIA)--Merrie Blocker
Commercial Counselor (DOC/FCS)--Larry Farris
Defense Attache--Lt. Col. George Murray, USMC

The U.S. Embassy is located at Calle Cesar Nicolas Penson and Calle Leopoldo Navarro, Santo Domingo (tel. 809-221-2171).

OTHER CONTACT INFORMATION:

U.S. Department of Commerce
International Trade Administration
Trade Information Center
14th and Constitution,
NW Washington, DC 20230
Tel: 1-800-USA-TRADE
Internet: http://www.doc.gov

Caribbean/Latin American Action
1818 N. Street, NW, Suite 310
Washington, DC 20036
Tel: (202) 466-7464
Fax: (202) 822-0075

American Chamber of Commerce in the Dominican Republic
Torre B.H.D.
Avenida Winston Churchill
P.O. Box 95-2
Santo Domingo, Dominican Republic
Tel: (809) 544-2222
Fax: (809) 544-0502
E-mail: amchamcodetel.net.do
Home Page: http://www.codetel.net.do/amcham

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheets exist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country.

When the Spaniards arrived on December 5, 1492, the "Tainos", Arauacos Indians who came from South America inhabited the island. These inhabitants called the island "Quisqueya"; it was divided into several domains or chieftainships.

The way of life of these inhabitants, mainly consisting of farming, hunting and fishing, experienced a radical change with the Spanish presence. They did not adapt and vanished in a short time. This extinction was followed by the arrival of African black slaves.

The island of Santo Domingo was the center of Spain's conquest and colonization of the New World. The principal expeditions that launched the discovery of other territories in the Caribbean and America departed from Santo Domingo's coasts.

The island felt the confrontation of European monarchies for the control of these new lands. Buccaneers and filibusters initiated a process that ended with the French occupation of the totality of the island with the Treaty of Basle in 1795.

In 1808, the French were driven out of the Eastern part of the island, which again passed over to Spanish control. After a brief attempt at independence, the Haitian occupation of the island began in 1822 and ended in February 27, 1844 with the proclamation of the National Independence.

Despite the independence ideal that Juan Pablo Duarte and the Trinitarians promoted in 1844 the island was annexed to Spain in 1861. Nevertheless, the Restoring Movement gave back to tlle Dominican Republic its status as an independent nation in 1865.

During its first republican periods, the country went through moments of political instability. These periods either prepared the ground for foreign military occupation or the rising of authoritarian governments such as those of Ulises Heureaux and Rafael L. Trujillo.

In 1966, the democratic consolidation and the strengthening of the development of the national productive structures, including the tourist industry, was initiated. From 1966 to 1994, the Reformist Party and the Dominican Revolutionary Party won eight elections.

The political and social stability attained in the Dominican Republic, together with the country's many resources, have been key factors in the development of the tourist trade. During the past two decades tourism has become the main sector of the national economy, generating 5.9% of the Gross Domestic Product (GDP), and employing more than 149,000 persons.