Dominican Republic Economy

The Dominican Republic is a once-Spanish owned nation, sharing the island of Hispaniola (meaning ‘little Spain’) with neighboring nation Haiti. Traditionally, it is famed for its sugar plantations which have tended to make up a large contribution to the general economy of the country, but in recent years this has been replaced by something far more lucrative. The tourism trade has taken the Dominican Republic to a new level of growth, and the Dominican Republic economy has, as a result, undergone something of a regeneration. Tourism now contributes around $1 billion to the overall wealth of the nation, with the service sector by far the largest employing industry on the island.

However, the Dominican Republic’s trade has not abandoned its roots, and by and large it is still functioning in an economy dependent on agriculture. For such a small nation, the Dominican Republic has a large export business; primarily exporting to the United States, but also sending goods as far and wide as Europe and Japan.

The primary exports are the indigenous, earth gems left to the Dominican people by mother nature. The sugar trade still has a huge influence on the health of the Dominican Republic economy, with the United States the main beneficiary. This, however, is not the only goods that are exported from the country; there is a high level of demand for materials and goods such as nickel, gold and tobacco is also increasing. The Dominican Republic made nearly $7 billion in exports over the course of the 2007 fiscal year.

While the above facts paint an impressive picture of the economy of the Dominican Republic, there are occasional hiccups in the statistics which serve as a sobering reminder that this is still a developing nation. Unemployment has a massive impact on the nation, and in 2007 the figure was close to 16 per cent.

As well as the worrying unemployment figure, some industries have not boomed as well as the export and tourism sectors. The textiles industry, of all of the struggling sectors, seems to have struggled the most – in 2006-2007, it reported a decline of around 17 per cent. Inflation is also high, at around 8 per cent.

It is also worth mentioning that part of the Dominican Republic economy relies on fair trade, known as FTZ. The fair trade movements has become a powerful global phenomenon, with the United States – already a confirmed trading partner with the Dominican Republic – taking particular interest in the movement. In 2006, the FTZ exports from the Dominican Republic contributed $4.55 billion to the Dominican Republic economy – and made up 70% of total exports to the United States.

While the Dominican Republic economy is growing and will continue to grow, primarily through tourism, there is still work to be done. Currently, around 40 per cent of the population are deemed to be living below the poverty line; this is mostly those working the plantations that are not part of the Fair Trade scheme. The United States has vowed to held ease this, but in the midst of a financial crisis at home and across the globe, action may be not be as rapidly forthcoming as one would hope. However, the promise is there, and the Dominican Republic is set to stabilize along with the rest of the world when the recession comes to an end.