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Economy of Dominican Republic

The Dominican Republic has the ninth largest economy in Latin America, and is the largest in the Caribbean and Central American region. It is an upper middle-income developing country primarily dependent on agriculture, mining, trade, and services. Although the service sector has recently overtaken agriculture as the leading employer of Dominicans (due principally to growth in tourism and Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is in second place (behind mining) in terms of export earnings. Tourism accounts for more than $1 billion in annual earnings. Free trade zone earnings and tourism are the fastest-growing export sectors.

The Dominican Republic's most important trading partner is the United States (75% of export revenues). Other main markets are the People's Republic of China, Haiti, Mexico, Colombia, Spain, and Brazil, in that quantitative order. The country exports free-trade-zone manufactured products (garments, medical devices, and so on), nickel, sugar, coffee, cacao, and tobacco. It imports petroleum, industrial raw materials, capital goods, and foodstuffs.

An important aspect of the Dominican economy is the Free Trade Zone industry (FTZ), which made up U.S. $4.55 billion in Dominican exports for 2006(70% of total exports). Reports show, however, that the FTZs lost approximately 60,000 between 2005 and 2007 and suffered a 4% decrease in total exports in 2006. The textiles sector experienced an approximate 17% drop in exports due in part to the appreciation of the Dominican peso against the dollar, Asian competition following expiration of the quotas of the Multi-Fiber Arrangement, and a government-mandated increase in salaries, which should have occurred in 2005 but was postponed to January 2006.

The government plans to continue providing subsidies. Congress passed a law in 2007 that criminalizes the act of stealing electricity, but it has not yet been fully implemented. The electricity sector is a highly politicized sector and the prospect of further effective reforms of the electricity sector is poor. Debts in the sector, including government debt, amount to more than U.S. $500 million. Some generating companies are under capitalized and at times unable to purchase adequate fuel supplies.

Sectors

Agriculture

With almost 80% of the total land area suitable for crop production and about 17% of the labour force engaged in farming, agriculture remains the primary occupation, accounting for 11% of GDP in 2001. After Cuba, the Dominican Republic is the second-largest Caribbean producer of sugarcane, the nation's most important crop. The State Sugar Council operates 12 sugar mills and accounts for about half of total production. Coffee production in 1999 was estimated at 35,000 tons; exports of coffee in 2001 generated $11 million. Cocoa and tobacco are also grown for export. Dominican Republic is one of the top 10 major producer and exporter of cocoa in the world.

Animal husbandry

In 2001, Dominican livestock included 187,000 goats and 106,000 sheep. There were also about 2.1 million head of cattle, 60% for beef and 40% for dairy.

Fishing

Although the waters surrounding the Dominican Republic abound with fish, the fishing industry is comparatively undeveloped, and fish for local consumption are imported.

Forestry

About 28.4% of the total land area consisted of forests and woodlands in 2000. Roundwood production in 2000 totalled 562,000 cu m (19.8 million cu ft). Virtually all the timber cut is for land clearing and fuel.

Mining

Mineral production has stagnated since a slump began in the mid-1980s. In 2000, mining accounted for 2% of GDP, which grew by 7.8%. Mining increased by 9.2%, stimulated by higher output and a higher average price of nickel, the country's most important mineral.

Industry

About 500 companies in the Dominican Republic manufacture goods primarily for the North American market. Products created are cosmetics, pharmaceuticals, textiles, perfumes & foodstuffs.

Teritiary Industries

Services were estimated to contribute 64.7% (2012 est.) of the GDP. In 1999 it was estimated to employ around 58.7 percent of the workforce, making this the most important sector of the Dominican economy.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Dominican Republic"

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