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Dominican Republic Construction
The construction industry had a major effect on the
economy
during the 1970s and the 1980s, as government-funded
public works
provided thousands of jobs and improved the physical
infrastructure. In 1987 the sector contributed nearly 9
percent
of GDP, a relatively high figure for a developing country.
Construction activity boomed in the early 1970s,
increasing at a
rate of 16 percent annually from 1970 to 1975, faster than
any
other sector during that period, with the exception of
mining.
Public-works projects such as dams, roads, bridges,
hospitals,
low-income housing, and schools transformed the national
infrastructure during the 1970s. The sector's rapid growth
continued in the 1980s, but it was very uneven because of
fluctuations in annual government spending. Private-sector
construction, particularly of free-zone facilities and
hotels,
also boosted industry performance.
Construction firms, like many other Dominican
businesses,
relied heavily on personal contacts. For example, in the
late
1980s the government awarded only about 15 percent of its
construction contracts through a competitive bidding
process.
Government authorities, up to and including the president,
negotiated or offered the remaining contracts as if they
were
personal spoils. The Balaguer administration's emphasis on
construction in the late 1980s focused primarily on
renovations
in Santo Domingo, and it included the construction of
museums, a
lighthouse, and a new suburb, all in preparation for
1992's
observance of the five-hundredth anniversary of Columbus's
arrival in the New World.
The construction sector generally was self-sufficient;
less
than one-third of all construction materials was imported.
Domestically produced materials included gravel, sand,
clay,
tiles, cables, piping, metals, paint, and cement. Although
the
main indicators of construction materials output generally
rose
in the 1980s, the rapid expansion of activity during the
decade
caused a serious shortage of cement that slowed the
progress of
some projects. The Dominican government built cement
factories in
Santiago and San Pedro de Macorís in 1977 in joint
ventures, with
private investors, to complement its major plant in Santo
Domingo, but the new capacity quickly became insufficient,
and
the country was forced to begin importing cement by the
mid1980s . By the late 1980s, cement factories were operating
at full
capacity, a rarity among developing countries such as the
Dominican Republic. Besides materials, the industry
encompassed
ten major construction firms as well as several design and
civil
engineering companies, which handled all but the most
complex
projects. The construction sector was a major employer of
unskilled labor, which constituted 65 percent of that
industry's
work force.
Data as of December 1989
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