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Dominican Republic Foreign Assistance
The IMF, the World Bank, and the IDB were the major
multilateral donors in the Dominican Republic. The IMF,
the
lender of last resort and for purposes of economic
stabilization,
had a long and controversial history in the country. The
Jorge
government had signed agreements with the IMF in 1983 and
1985,
but both ended prematurely because of disagreements over
the pace
and the extent of economic reforms. Austerity measures
mandated
under the 1985 IMF agreement were met with widespread
rioting and
other violence. The Balaguer administration (1986-90) had
yet to
sign an IMF agreement as of 1989, and it often lambasted
the
international institution over its unpopular economic
remedies.
In the absence of an IMF agreement, World Bank lending was
limited to about US$15 million a year, mainly in support
of road
construction, energy, financial sector reform, and other
technical assistance. The IDB had assisted the island
since the
early 1960s; in the 1980s it provided funding for projects
in
irrigation, education, hurricane assistance, and highways.
The United States was the major bilateral donor in the
Dominican Republic, furnishing between one-quarter and
one-half
of bilateral assistance. The level of United States
assistance
since the 1940s had fluctuated widely in response to
economic and
political trends. The Dominican Republic became one of the
top
recipients of United States aid in 1966, when US$100
million in
economic assistance was provided in the aftermath of the
United
States occupation. Assistance slowed during the 1970s,
averaging
only US$21 million a year. The United States Agency for
International Development (AID) strengthened its presence
in the
1980s, and from 1984 to 1987, United States assistance
averaged
US$115 million a year, the highest level since 1966. The
composition of United States assistance changed markedly
during
the 1980s, from an emphasis on development
assistance--which
constituted 56 percent of total aid in 1979 but only 25
percent
in 1987--to greater use of Economic Support Funds (mainly
balance-of-payments support), which, although they had not
existed in 1979, accounted for approximately 55 percent of
aid in
1985. The level of food aid under the Public Law 480 (Food
for
Peace) program remained fairly constant, about 45 percent
of
total aid. The focus of AID's interventions in the
republic also
shifted dramatically, from basic human needs--education,
health,
and family planning in the 1970s--to short-term economic
stabilization, privatization, export promotion, economic
policy
reform, natural resource management, and small business
development. Besides AID, other United States bilateral
agencies,
such as the Peace Corps and the Overseas Private
Investment
Corporation actively assisted development. Japanese,
European,
and Canadian bilateral development agencies also had
representatives on the island. Private nongovernmental
development groups, both local and international, were
numerous
in the Dominican Republic; they provided hurricane relief,
food
donations, and project support to multilateral and
bilateral
donors.
Although privation and poverty persisted, especially in
rural
areas, the economy appeared in the late 1980s to be moving
toward
a new phase of development, based on export promotion and
new,
innovative service industries. Reliance on the United
States as a
customer, supplier, and aid donor was crucial to this
process.
Long-term prospects for diversification and growth were
encouraging, providing the government was able to deal
effectively with negative trends in trade and the balance
of
payments. The problem of the foreign debt appeared
intractable,
partially for political reasons. As in other areas,
however, the
Dominican economy in 1989 contrasted dramatically with the
sugardominated fiefdom left behind by Trujillo in 1961.
***
The works that best describe the Dominican economy in
the
1980s include Claudio Vedovato's Politics, Foreign
Trade, and
Economic Development. A Study of the Dominican
Republic,
Howard J. Wiarda and Michael J. Kryzanek's The Politics
of
External Influence in the Dominican Republic, and Jan
Knippers Black's The Dominican Republic: Politics and
Development in an Unsovereign State. The annual
Dominican
Republic: Investors Handbook, published by the
American
Chamber of Commerce of the Dominican Republic, provides a
useful
guide to economic developments. As of 1989, however, there
was no
definitive book-length study detailing the economy's shift
from
sugar toward free-zone manufacturing, tourism, and other
nontraditional activities. The World Bank, the International
Monetary Fund, the United States Agency for International
Development, and the United States Department of
Agriculture
issue the most important field-based studies on the
Dominican
Republic available on a regular basis. The United Nations
Economic Commission for Latin America and the Caribbean
and the
Economist Intelligence Unit also publish helpful annual
reports
on the Dominican economy. On the island, the Dominican
Central
Bank, the Technical Secretariat of State of the
Presidency, the
Investment Promotion Council, the State Sugar Council, and
the
Dominican Center for the Promotion of Exports, all
generate
essential data and studies on local economic activity.
(For
further information and complete citations,
see Dominican Republic -
Bibliography.)
Data as of December 1989
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