Glossary -- Dominican Republic (Dominican Republic and Haiti)
- colono(s)
- As used in the Dominican Republic, refers to a small
independent sugarcane grower. In other Latin American countries,
the word usually designates a settler or a tenant farmer.
- Dominican Republic peso (RD$)
- Dominican monetary unit, divided into 100 centavos. The
Dominican government officially maintained a one-to-one exchange
rate between the peso and the United States dollar until 1985, when
the peso was allowed to float freely against the dollar for most
transactions. In 1988, the exchange rate reached US$1=RD$8.00; it
subsequently leveled off to US$1=RD$6.35 by 1989. The government
decided in 1988 to reinstitute a fixed exchange rate that it would
adjust periodically in accord with prevailing economic conditions.
- 807 program
- Refers to items 806.3, 807, and 807-A of the Tariff Schedules
of the United States that allow the duty-free entry of goods when
the final product contains a certain portion of raw material or
labor value-added in the United States and the Caribbean Basin.
Item 807-A provides guaranteed access levels to specific Caribbean
Basin countries.
- encomienda
- A fiduciary grant of tribute collection rights over Indians,
conferred by the Spanish crown on individual colonists
(encomenderos), who in turn undertook to maintain order
and to propagate Christianity.
- fiscal year (FY)
- The Dominican Republic's fiscal year is the calendar year,
except in the case of the State Sugar Council (Consejo Estatal de
Azúcar--CEA), which runs in the cycle of October to September 30.
Haiti's fiscal year is the same as that of the United States
government, running from October 1 to September 30. Fiscal year
dates of reference for these two countries therefore correspond to
the year in which the period ends. For example, FY 1988 began on
October 1, 1987, and ended on September 30, 1988.
- gourde (G)
- The Haitian monetary unit, divided into 100 centimes. The
official exchange rate of US$1=G5, established in 1919, remained in
place in 1989. On the black market, however, the gourde traded at
US$1=G7 or higher.
- gross domestic product (GDP)
- A measure of the total value of goods and services produced by
a domestic national economy during a given period, usually one
year. Obtained by adding the value contributed by each sector of
the economy in the form of profits, compensation to employees, and
depreciation (consumption of capital). Only domestic production is
included, not income arising from investments and possessions owned
abroad, hence the use of the word "domestic" to distinguish GDP
from gross national product (q.v.). Real GDP is the value
of GDP when inflation has been taken into account.
- gross national product (GNP)
- The total market value of all final goods and services produced
by an economy during a year. Obtained by adding the gross domestic
product (q.v.) and the income received from abroad by
residents and then subtracting payments remitted abroad to
nonresidents. Real GNP is the value of GNP when inflation has been
taken into account.
- import substitution
- Also known as import-substitution industrialization, an
economic development strategy that emphasizes the growth of
domestic industries, often by import protection using tariff and
nontariff measures. Proponents favor the export of industrial goods
over that of primary products.
- Industrial Free Zone(s)
- Also known as free trade zones, or free zones, these industrial
parks played host to manufacturing firms that benefited from
favorable business conditions extended by a given government in an
effort to attract foreign investment and to create jobs. In the
Dominican Republic, free-zone enterprises paid no duties on goods
directly imported into, or exported from, the free zone. These
enterprises also enjoyed exemptions from Dominican taxes for up to
twenty years, and they were allowed to pay workers less than the
established minimum wage.
- International Monetary Fund
(IMF)
- Established along with the World Bank (q.v.) in 1945,
the IMF is a specialized agency affiliated with the United Nations;
it is responsible for stabilizing international exchange rates and
payments. The main business of the IMF is the provision of loans to
its members (including industrialized and developing countries),
when they experience balance of payments difficulties. These loans
frequently carry conditions that require substantial internal
economic adjustments by the recipients, most of which are
developing countries.
- liberation theology
- An activist movement led by Roman Catholic clergy who trace
their inspiration to Vatican Council II (1965), where some church
procedures were liberalized, and the Second Latin American Bishops'
Conference in Medellín, Colombia (1968), which endorsed greater
direct efforts to improve the lot of the poor.
- Lomé Convention
- A series of agreements between the European Economic Community
(EEC) and a group of African, Caribbean, and Pacific (ACP) states,
mainly former European colonies, that provided duty-free or
preferential access to the EEC market for almost all ACP exports.
The Stabilization of Export Earnings (Stabex) scheme, a mechanism
set up by the Lomé Convention, provides for compensation for ACP
export earnings lost through fluctuations in the world prices of
agricultural commodities. The Lomé Convention also provides for
limited EEC development aid and investment funds to be disbursed to
ACP recipients through the European Development Fund and the
European Investment Bank. The Lomé Convention is updated every five
years. Lomé I took effect on April 1, 1976; Lomé II, on January 1,
1981; Lomé III, on March 1, 1985; and Lomé IV, on December 15,
1989. Lome IV included the Dominican Republic, Haiti, and Namibia
in the convention for the first time.
- 936 funds
- Funds deposited by United States-based corporations in the
Government Development Bank of Puerto Rico in order to take
advantage of Section 936 of the United States Internal Revenue
Service Code, under which income derived from sources in Puerto
Rico is exempted from United States income taxes. These funds may
be used to help finance twin plant ventures with countries that
have signed a bilateral tax information exchange agreement with the
United States.
- Paris Club
- A Paris-based organization that represents commercial banks in
the rescheduling of national debts.
- San José Accord
- An agreement between Mexico and Venezuela--signed in 1980 in
San José, Costa Rica, whereby the two oil producers committed
themselves to supply crude oil on concessionary terms to ten
Central American and Caribbean nations.
- terms of trade
- Number of units that must be given up for one unit of goods
received by each party, e.g., nation, to a transaction. The terms
of trade are said to move in favor of the party that gives up fewer
units of goods than it did previously for one unit of goods
received, and against the party that gives up more units of goods
for one unit of goods received. In international economics, the
concept plays an important role in evaluating exchange
relationships between nations.
- twin plant
- Productive arrangements whereby two or more producers in
separate countries complementarily share the production of a good
or service. Under the Caribbean Basin Initiative (CBI--see Appendix
B), such arrangements with the government of Puerto Rico
potentially benefited from special investment or 936 funds
(q.v.). The operations of Twin Plant ventures typically
entailed the delegation of assembly or other labor-intensive
production stages to plants in a CBI-designated country, from which
these semi-finished products would then be shipped duty-free to
Puerto Rico for final processing.
- World Bank
- Internal name used to designate a group of three affiliated
international institutions: the International Bank for
Reconstruction and Development (IBRD), the International
Development Association (IDA), and the International Finance
Corporation (IFC). The IBRD, established in 1945, has as its
primary purpose the provision of loans to developing countries for
productive projects. The IDA, a legally separate loan fund
administered by the staff of the IBRD, was set up in 1960 to
furnish credits to the poorest developing countries on much easier
terms than those of conventional IBRD loans. The IFC, founded in
1956, supplements the activities of the IBRD through loans and
assistance designed specifically to encourage the growth of
productive private enterprises in the less developed countries. The
president and certain senior officers of the IBRD hold the same
positions in the IFC. The three institutions are owned by the
governments of the countries that subscribe their capital.
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