The Taino - indigenous inhabitants of Hispaniola prior to the arrival of the Europeans - divided the island into five chiefdoms and territories. Christopher COLUMBUS explored and claimed the island on his first voyage in 1492; it became a springboard for Spanish conquest of the Caribbean and the American mainland. In 1697, Spain recognized French dominion over the western third of the island, which in 1804 became Haiti. The remainder of the island, by then known as Santo Domingo, sought to gain its own independence in 1821 but was conquered and ruled by the Haitians for 22 years; it finally attained independence as the Dominican Republic in 1844. In 1861, the Dominicans voluntarily returned to the Spanish Empire, but two years later they launched a war that restored independence in 1865. A legacy of unsettled, mostly non-representative rule followed, capped by the dictatorship of Rafael Leonidas TRUJILLO from 1930 to 1961. Juan BOSCH was elected president in 1962 but was deposed in a military coup in 1963. In 1965, the US led an intervention in the midst of a civil war sparked by an uprising to restore BOSCH. In 1966, Joaquin BALAGUER defeated BOSCH in the presidential election. BALAGUER maintained a tight grip on power for most of the next 30 years when international reaction to flawed elections forced him to curtail his term in 1996. Since then, regular competitive elections have been held in which opposition candidates have won the presidency. Former President Leonel FERNANDEZ Reyna (first term 1996-2000) won election to a new term in 2004 following a constitutional amendment allowing presidents to serve more than one term, and was later reelected to a second consecutive term. In 2012, Danilo MEDINA Sanchez became president; he was reelected in 2016.
Caribbean, eastern two-thirds of the island of Hispaniola, between the Caribbean Sea and the North Atlantic Ocean, east of Haiti
nickel, bauxite, gold, silver, arable land
Population - distribution
coastal development is significant, especially in the southern coastal plains and the Cibao Valley, where population density is highest; smaller population clusters exist in the interior mountains (Cordillera Central)
SANTO DOMINGO (capital) 2.945 million (2015)
- Conventional long form
- Dominican Republic
- Conventional short form
- The Dominican
- Local long form
- Republica Dominicana
- Local short form
- La Dominicana
- Santo Domingo
- Geographic coordinates
- 18 28 N, 69 54 W
- Time difference
- UTC-4 (1 hour ahead of Washington, DC, during Standard Time)
accepts compulsory ICJ jurisdiction; accepts ICCt jurisdiction
The Dominican Republic was for most of its history primarily an exporter of sugar, coffee, and tobacco, but in recent years the service sector has overtaken agriculture as the economy's largest employer, due to growth in construction, tourism, and free trade zones. The mining sector has also played a greater role in the export market since late 2012 with the commencement of the extraction phase of the Pueblo Viejo Gold and Silver mine, one of the largest gold mines in the world. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GDP, while the richest 10% enjoys nearly 40% of GDP. High unemployment, a large informal sector, and underemployment remain important long-term challenges.
- External debt stocks
- US$ 26,631,939,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -977,600,000
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 20,690,876,959
- Exports of goods and services
- US$ 18,016,218,609
- Total Merchandise Trade
- FDI, net inflows
- US$ 2,522,500,000
- Commercial Service Exports
- US$ 7,983,900,000
cocoa, tobacco, sugarcane, coffee, cotton, rice, beans, potatoes, corn, bananas; cattle, pigs, dairy products, beef, eggs
tourism, sugar processing, gold mining, textiles, cement, tobacco, electrical components, medical devices
- gold, silver, cocoa, sugar, coffee, tobacco, meats, consumer goods
- US 42.2%, Haiti 16.4%, Canada 8%, India 5.4% (2015)
- petroleum, foodstuffs, cotton and fabrics, chemicals and pharmaceuticals
- US 43.4%, China 9.5%, Trinidad and Tobago 4.7%, Mexico 4.3% (2015)
- Country Risk Rating
- Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
- Business Climate Rating
- The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.
- Top tourist destination in the Caribbean
- Remittances from diaspora
- Free-trade agreement with the United States (CAFTA-DR)
- Free-trade areas (51% of exports)
- Political stability
- Dependence on U.S. economic cycle
- Dependence on price of gold
- Inadequate power supply
- Education and healthcare shortcomings
- High levels of poverty and inequality
- Drug-related crime
- High levels of corruption
In 2016, growth, although having registered a decline, benefited from sustained activity in the United States, the country's largest trading partner. This downward trend is expected to continue in 2017. Agricultural output and exports are likely to be affected by bad weather conditions in late 2016. Private investment in real estate, financial services and manufacturing industry is expected to remain dynamic. A slowdown in public investment is to be expected, particularly in infrastructure: the financing of the construction project of two thermoelectric coal-fired power plants (about 3% of GDP) to address the inadequate electricity supply was the subject of a controversy, thus delaying the project. The construction of these power plants is expected to be completed in 2018. Despite substantial remittances from the diaspora in the United States, consumer spending is expected to decline. High levels of unemployment (around 14%) and poverty affecting more than half of the population (of which almost 40 percent below the poverty line) are the main hurdles. Due to the higher energy bill, inflationary pressures will emerge, but inflation is expected to remain in the lower range of the 3 - 5% target set by the central bank. Besides, the central bank raised its key rate in October 2016, in anticipation of the normalization of FED's monetary policy.
At the same time, exports of manufacturing goods (particularly from the textile sector) produced in the free-trade zones are projected to rise, due an improvement in US activity. The tourism sector is expected to remain dynamic, because of sustained numbers of mainly American visitors (more than 50% of tourist visitors). The reopening of the Falcondo nickel mine, which will come into full capacity by 2017, is expected to provide a modest boost for the mining sector.
The fiscal consolidation policy initiated when President Medina came to power in 2012 went off course in 2016, because of election spending. In 2017, the public deficit worsened slightly, despite progress made on tax collection (fight against tax evasion, new rules on the taxation of dividends within the free-trade zone...) and the removal of subsidies in the transport sector. However, higher current and capital spending and the growing debt servicing burden will push up public spending levels. Moreover, the decline in the quantities imported under the Venezuelan PetroCaribe program which supplies oil at preferential prices could also drive up government spending , especially as the energy reform bill aimed at reducing oil dependency by diversifying the sources of electricity generation seems be postponed.
With respect to foreign trade, the Dominican Republic, the number one tourist destination in the Caribbean, should still enjoy high numbers of tourists and fund remittances from about 2 million workers abroad (65% in the United States). However, manufacturing exports are expected to increase as a result of higher US growth, while income from gold exports is likely to hold up. Energy imports are, nonetheless, expected to become more costly because of the moderate recovery in oil prices. This poor trade balance performance will cause the current account balance to widen in 2017.
President Danilo Medina, leader of the Dominican liberation Party (PLD), was re-elected for a second term of four years in the 2016 presidential elections. Despite the opposition's objections to the ballot, he still enjoys significant popular support. In addition, the LDP continues to enjoy an absolute majority in both houses following the 2016 parliamentary elections. The traditional opposition party, the Dominican Revolutionary Party (PRD) as well as the Modern Revolutionary Party (PRM), gained a few seats in the Senate. However, the PRM is represented, for the first time since its creation (in August 2015), in the Chamber of Deputies, where it won many seats, at the expense of the PRD, hence modifying the composition of the landscape of the opposition.
In terms of foreign policy, relations with Haiti remain strained over immigration. The decision of the Dominican courts in 2013 to deny Dominican nationality to the descendants of migrants "in transit" born since 1929 and the response of the Haitian authorities in banning the import of certain products from the Dominican Republic continue to create friction between the two countries. These tensions are bound to grow in the future, as extreme weather conditions combined with political instability in Haiti in 2016 may increase the flow of Haitian migrants. The business climate is likely to continue to suffer from high levels of corruption, inadequate infrastructure (with the exception of telecommunications) and electricity supply problems, although some efforts have been made regarding these previous two points. The country is ranked 103rd in the 2017 Doing Business Index.
However, political stability and preferential access to the US market under the free-trade agreement (CAFTA) remain favorable for investment.