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Dominican Republic ECONOMY
Gross Domestic Product (GDP): Approximately
US$5.6
billion in 1987, roughly US$800 per capita.
Agriculture: Accounted for about 15 percent of
GDP,
employed some 35 percent of labor force, and generated
approximately half of all exports in 1988. Sugar
traditionally
the major crop, although its importance declined steadily
during
1970s and 1980s. Coffee, cacao, and tobacco also produced
for
export. Exports of nontraditional agricultural products,
particularly pineapple and citrus fruit, expanded in
1980s.
Industry: Manufacturing, mining, and
construction
combined to contribute over 31 percent of GDP in 1988.
These
industries also employed almost 10 percent of labor force
and
accounted for two-thirds of country's exports. Assembly
manufacturing subsector achieved fastest growth in 1980s
as a
result of government expansion of Industrial Free Zones
throughout country. Major mineral exports gold, silver,
bauxite,
and nickel, all of which had low prices on world markets
during
1980s. Construction benefited greatly from government
public
works projects and expansion of tourist industry.
Services: Tourism leading service industry;
replaced
sugar as country's leading foreign-exchange earner in
1984.
Government supported development of tourist industry, but
economic shortcomings such as inadequate water and energy
supply
and shortages of construction materials slowed expansion
of
facilities and adversely affected service to visitors.
Financial
services contributed 7 percent to GDP in 1988;
transportation and
communications accounted for additional 6 percent.
Currency: Dominican Republic peso (RD$),
consisting of
100 centavos. Peso maintained on a par with United States
dollar
until 1985, when it was allowed to float against dollar.
Value of
peso plunged, reaching a low of US$1=RD$8 in mid-1988, but
had
rebounded slightly to US$1=RD$6.35 by 1989.
Imports: Approximately US$1.5 million in 1987,
highest
level ever recorded. Oil imports declined on a percentage
basis
from 1980 to 1987, but imports of intermediate goods,
consumer
goods, and capital goods increased over same period,
contributing
to negative trade balance.
Exports: Approximately US$718 million in 1987, a
tenyear low. Decline in export value mainly attributable to
low
sugar prices on world market from 1984-87.
Balance of Payments: Overall deficit reached
US$593
million in 1987, roughly 11 percent of GDP. Effect of
deficit
cushioned somewhat by cash remittances from Dominicans
living
abroad, tourism, a draw down of reserves, and rescheduling
of
country's foreign debt.
Fiscal year
(FY--see Glossary):
Calendar year, except
in case of State Sugar Council (Consejo Estatal de
Azúcar--CEA),
which runs on cycle October 1 to September 30.
Fiscal Policy: Fiscal deficits mounted in 1980s,
mainly
as result of dwindling revenues. Revenues fell from 16
percent of
GDP in 1970 to 10 percent in 1982, as Dominican
governments
provided tax incentives to business without securing
sufficient
alternate sources of revenue. Although not exorbitant
relative to
GDP, expenditures continued to rise throughout 1980s as
government maintained subsidies on imported foodstuffs,
gasoline,
public utilities, and transportation in order to keep
prices
artificially low for low-income consumers. Debt service
accounted
for 22 percent of total expenditures in 1988 budget. Under
President Joaquín Balaguer Ricardo, expanded public works
programs boosted capital expenditures from 30 percent to
over 40
percent of budget.
Data as of December 1989
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