Forty-one Dominicans have been reported killed or missing in
September’s terrorist attacks on the World Trade Center. But the
uncertainty goes on for millions more. In common with many small
Latin American and Caribbean economies, the Dominican Republic
depends hugely on remittances: income earned by emigrants and sent
back to the country. Last year these flows totalled around $1.7
billion, and about 80% is estimated to come from the US – meaning
that the impact of the expected layoffs as a result of the attacks
in New York and Washington will be felt by huge numbers of families
back home.
However Francisco Guerrero Prats, governor of the Dominican central
bank, says: “The sectors of the US economy where the Dominican
workforce is mainly concentrated have not been overly affected.”
Estimates vary enormously about how many Dominicans are earning a
living in the US. The country puts the number at between 800,000
and one million but a recent Inter-American Development Bank study
on remittances reported at least two million Dominicans living in
the US, with more than a million in the New York area alone.
The report found that in spite of its small size, the Dominican
Republic had the third highest volume of remittances in the region
in 1999, the latest year for which figures were available: almost
as many as Brazil, and more than El Salvador, Colombia, Peru or
Ecuador.
Some statistics about Dominican remittances give an idea of their
huge significance to the Republic. Annual remittances account for
8.5% of gross domestic product and are equivalent to almost
two-thirds of the country’s income from tourism. They are almost
four times the value of the country’s traditional primary exports;
they exceed annual foreign direct investment; and they represent
more than 11 times the value of development aid to the Dominican
Republic, according to the I-ADB.
Remittances grew by 85% between 1996 and 2000, and in the first
half of this year, in spite of the deteriorating economic climate
in the US, remittances still increased a further 7% to $823
million.
It remains too early to detect whether there will be a substantial
medium-term decrease in remittances. The central bank is not too
pessimistic.
“In general terms, apart from the temporary impact because of the
suspension of flights for a few days, the terrorist attack has not
affected the flow of remittances,” says governor Guerrero. “The
bank has information from the main remittance agents which shows
that the flow has remained normal through 2001, and that there is
no expectation that the flow will drop in coming months.”