After 40 years of strait-jacketed economic and political controls, the Dominican Republic is firmly committed to remaking itself. President Hipólito Mejía, Leonel Fernández, has inherited a package of reforms initiated by his predecessor, including establishing the integrity of top judicial levels. Foreign and local businessmen now speak with relief about the opportunity to arbitrate with confidence. Secular civil society is growing and competing successfully with the traditionally strong and influential church as an alternative voice on public affairs.
Before Fernández, Dominican institutions were, for the most part, archaic and corrupt, unable to meet the demands of an emerging economy in a rapidly changing world. While previous president, Joaquín Balaguer, who had seven non-consecutive terms, presided over a period of political stability, the economy and public administration remained subject to his rule by decree, which ignored the Congress. He kept his stamp on the country even for the brief periods he was out of office.
“We have now had democracy for five years,” suggests a well-known banker, whose sentiment is shared by many.
The new openness is also reflected in how the country sees itself. Balaguer cared little for foreign relations. The country was relatively isolated and seemingly disinterested in the world around it. In contrast, Fernández forged trade pacts with neighbors in the Caribbean and Central America, positioning the Dominican Republic as a bridge between the two groups.
Nowhere is the country’s shift as clear as in economic policy. Fernández embraced the view that the private sector is the most efficient engine for industry and infrastructure growth, and embarked on a landmark privatization program with mixed success. Since taking office, Mejía has continued this effort to improve foreign and economic ties. After initial distrust, Mejía has also embraced Fernández’s efforts to make information technology one of the paths towards development, backing the creation of Santo Domingo’s new “cyberpark” tech center.
Yet, there is evidence that the country has not totally escaped its past. At the end of Fernández’s administration, in a failed effort to support his party’s candidate for the presidency, he embarked on a highway-building program that worsened the country’s fiscal situation. The move was more typical of Balaguer. Mejía’s sacking of 70,000 government workers to make way for his own partisans also indicates a continuation of some elements of an embedded political culture.
But foreign business is likely to care less about these developments, and more about the economic climate under an administration that says it encourages foreign investment. Despite his plans to revise Fernández’s policies, including the privatization program, Mejía will find it hard to make substantive changes to economic and foreign policy.
His greatest task appears to maintain the rate of growth in the economy, which at 8.3% was one of the world’s best in 1999. There are already signs that this is slowing down. The administration must also deal effectively with one legacy of unfinished business from Fernandez, the electricity sector. Inefficient and inadequate for decades, the power generation infrastructure is an unfair drain on the economy, say businessmen. Consumers, told to expect rapid improvement following last year’s privatization of parts of the power sector, have been angered that it has not come.
After the heated rhetoric of this year’s election campaign, there appears now to be a sobered disposition within the administration. Says a senior government official: “Our intention is to build-on and improve the economy, but also to ensure that all Dominicans benefit from the expansion.”n