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» Economics » Economics to countries » Topics begins with E » Economics of the Dominican republic

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The economy of the Dominican republic

The primary sector of the economy

Rural economy

Rural economy represented the most important part of the Dominican economy during a long period and was almost exclusively aligned to the export. Beside cocoa, coffee and bananas above all Zuckerrohr was essentially cultivated. Traditionally the sugar export represented an indispensable part of the export value of the country. The sugar tubing cultivation was characterised, like entire rural economy, by a quite small productivity rate. Like that years were busy on average about 60% of the employed persons population in this sector, contributed however only scarcely a quarter to the GROS DOMESTIC PRODUCT during the 1960er. In the same decade began itself in the course of economic changes on the world market to change the economic structure of the country drastically. Unfavorable ones of term OF trade let the meaning of rural economy drop gradually in favor of of mining industry and starting from the late 1980er years of tourism. Center of the 1970er years gained the sugar still nearly half of the export value of the country, this portion dropped however until 1985 on 21%.

One of the principal reasons played thereby the erosion of the world prices for sugars, which broke in in the first half of the 1980er years strongly. 1982 Caribbean sugar only a quarter of the price in the comparison, for example obtained, to the year 1980. 1985 amounted that value to less than a fifth. In particular the strong reduction of US - import quota for Dominican sugar in the year 1998 led to the fact that the portion of sugar of the entire export achievement dropped in only two years of approximately 21% 1997 to no less than 4% 1999. The circumstance that 1994 still over a third of the employed persons in the agriculture worked, points the still existing small productivity out. In addition it comes that the sugar economy is dominated considerably by multinational companies and the state. The retreat of foreign investors due to constantly sinking profitability brought strong additional social costs of the Dominican republic with itself.

The moreover the unequal distribution from agricultural effective area is to be designated to. 1% of the agriculture enterprises possess over 50% of the utilizable soil, while 75% of the small agrarian enterprises have only a portion of 15%. The being nominal oh question at agricultural products is covered only insufficiently by medium sized enterprises. Since despite some attempts of a land reform in favor of the Kleinbauern still 85% of all agrarian enterprises are smaller than 5 hectars, no Subsistenzproduktion meeting demand for national consumption succeeds. The necessary food imported goods contribute thus to the chronic deficit of the commercial balance sheet.

The mining industry

The mining industry economy was perfectly insignificant long time, registered however starting from the 1970er years an exorbitant growth. During this decade the portion of this industry of the export from <0,5% 1970 to 38% rose in the year 1980. Apart from the dismantling from iron nickel were gold, silver, as well as bauxite of greater importance. However only 1% of the employed persons were in this segment busy, which speaks for a high productivity. On the other side it becomes clear with the fact that this sector created hardly jobs, in order to stop and leave at the relatively good earning facilities sharings larger parts of the employed persons.

Besides foreign large concerns dominated the business also within this range, which affected itself in the middle of the 1980er fatal. Just like in the sugar business 1984 the Gulf and Western company, sold also aluminum company OF America (Alcoa) already 1982 their to all factories in the bauxite sector due to international price decreases and more generally economicrecession economics iron nickel could still into the center of the 1990er years inside an important portion of approx. 30% of the entire volume of exports constitute. But also there large cases of price and small demand led to the fact that at the end of of October 1998 entire production was stopped for 3 months. In the year 1999 the volume of exports amounted to only scarce therefore 5%.

The secondary sector of the economy

The industry of the Dominican republic first predominantly concentrated on the subsequent treatment of agricultural products. Everything in front on of sugar and its by-products. Further on the beverage and the food production, as well as the production of chemical products, production of textiles and cement.

Of enormous importance for the Dominican republic the so-called "free production zones" proved in the last years, which import, to finished products process semifinished products in fact outside of the national economy and export these again. The meaning of the "free production zones" for the Dominican economy can be proven for the following reason only indirectly. Only the wages and salaries that persons employed flow there into the computation GROS DOMESTIC PRODUCT also, not however the profits that there active enterprises. Their number amounted 1998 to nevertheless approx. 500 and offered approximately 190,000 humans work. Further the "free production zones" stressed approx. 37% of all imported goods of the country and constituted 1998 over 82% of the export. Also a reason why this portion so become larger could, is the purge of the Rohstoffpreise of the former main export products sugar, bauxite, etc. specified in the previous section.

Despite this part of the Dominican economy grown rapidly 1998 already appeared a stagnation beginning. The Dominican republic seized in this connection the initiative and tried together with other zentralamerikansichen States of pressure on the US Government to exercise to attain with the goal a parity with the Mexican textile industry.

The tertiary sector of the economy

As results from the employment figures specified already, inevitably the majority of the employed persons must be in this sector busy. Their portion in that sector amounts to estimated 40 - 45% in the year 1994. Here it must be however noted that among this sector also small trades, Schuhputzer, street vendor, etc. are ranked. This form of the work serves equally as a kind catchment basins for unemployed persons and represented for many urban families of the lowest social layer the only chance of survival.

Despite all adversities in the other sectors of the economy amounted the average increase GROS DOMESTIC PRODUCT to 7% in the second half of the 1990er years. The growth rates are particularly conspicuous in range of the building industry (1996-99: +17.1%), communication (1996-99: +17,93%) and hotels & restaurants (1996-99: +11.23%). This development decreases/goes back mainly to the tourism, which expanded since the late 1980er years substantial. This sector became within relatively short time the Hauptdevisenbringer of the country.

A not despising disadvantage here represents the structural dependence on foreign economic situations. Almost all tourists of the country are from western industrial nations and remain logical-prove straight out if the economic situation situation in their homelands worsens. In particular after the notices from 11 September 2001 and the using international Wirtschaftsflaute took place first more easily a break-down in the tourism business. Thus the number of the tourists was reduced 2002 compared with 2001 by nevertheless 146,000 and/or approx. 5%. In what respect in this connection present and future international crises, as for example the uncertain situation in the Iraq, as well as the acts of terrorism of Djerba, Bali, Madrid, as well as recently also London, negatively the tourism industry will affect, is at present not yet estimatable.


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