Going Its Own Way – The Dominican Republic

Danilo Medina, the President of the Dominican Republic

By David Jessop

News Americas, LONDON, England, Tues. Mar. 3, 2015: Last month, Danilo Medina, the President of the Dominican Republic, made clear that it was time to reset his country’s foreign policy to better reflect its development objectives and the process of change and modernization now underway.

His views reflect the fact that the Dominican economy is growing rapidly, its sophisticated and increasingly outward looking private sector is seeking a bigger role in the Americas and beyond, and the country is strengthening its relationships with those of its regional neighbors that see value in doing so and in particular, Puerto Rico, the Bahamas and Trinidad.

In this respect, recently released economic growth figures demonstrate the changing nature of the country and its business community. Central Bank statistics show annual GDP growth for 2014 at an all time recent high of 7.4 per cent; building on growth in the years immediately prior. The nation’s investment rating was upgraded late last year by the international agencies, and its manufacturing, mining, agriculture, tourism, financial and other sectors continue to grow. There is also the prospect of an exploration round soon for likely significant deposits of natural gas off its north and south coasts.

In his remarks, President Medina proposed that in all of the forums in which the Dominican Republic participates; it has a clear and strong voice. It was, he told Ministers, Ambassadors and senior officials attending a January 14 Diplomacy Forum, time to promote the country’s image abroad. This would, he said, require a change in the role and focus of Dominican diplomacy so that in future it would place emphasis on the country’s productive sectors, prioritize the positive treatment and role of Dominicans abroad, and see the Ministry of Foreign Relations strengthened.

President Medina also noted that the Dominican Diaspora’s financial contribution, totaling US$13 billion in 2014, was now providing much of the country’s foreign exchange for the purchase of finished products and raw materials. These flows, he said, had “nearly doubled the annual foreign direct investment received by the country in this manner the last three years”. For this reason, he was, he said, adamant that foreign relations should protect the rights and promote the welfare of all of the Dominican people.

As a part of his new strategy, the Dominican President has been forging a deeper economic relationship with nearby Puerto Rico. This has the objective of more closely integrating the two economies through production sharing and a range of other measures.

As a first step President Medina and the Puerto Rican Governor, Alejandro García Padilla, who have developed a close working relationship, signed later on January 14 in San Juan eleven bilateral agreements covering : the encouragement of productive chains between Puerto Rican and Dominican industries; the exchange of farm products and industrial products; new arrangements in higher education, including scholarships and the leveling of tuition fees in Puerto Rico for Dominican students; technical assistance in the event of natural disasters; and cooperation on fiscal issues, investment promotion, environmental protection, and security matters.

Since that time, Dominican officials and companies have been working towards identifying the areas in which production sharing might be possible and within the next two months a forum is expected to take place to promote joint investments.

Why this is worth noting in detail is because the period from discussion to delivery is rapid and being both led and driven by the country’s President.

Virtually unknown in the Anglophone Caribbean, President Medina is an intensely practical, managerial and popular figure, with a focus not on grandstanding or seeking a role on the international stage but on working with others in a pragmatic way with a focus on delivery. Although he is denied by the Dominican constitution from running for a further term, independently produced approval ratings suggest he has 89 per cent support; a figure that most others politicians in the region can only dream of.

Put more broadly, President Medina is quietly seeking to change the economic map of the Caribbean and develop a more significant role for his country in a way that embraces a strong private sector led economic relationship in particular with Puerto Rico, with Cuba, and others as well as with the country’s neighbour, Haiti.

His statement to Ambassadors should also be seen as a reflection of a process that is likely to lead the Dominican Republic away from most nations in CARICOM at a time when a closer relationship might have brought significant long-term benefits. It will undoubtedly amplify the voices of those in Santo Domingo who believe that there is no longer any reason to seek a deeper economic relationship with CARICOM.

The strength of the Dominican Republic’s development prospects is well understood outside of the region where governments have begun to recognize the need to engage with a nation has the potential to become an economic powerhouse in the Caribbean Basin.

In contrast, some in CARICOM continue to find it uncomfortable to think about their much larger neighbor in this way and seem intent on trying to regionally isolate the country.

Nominally such concerns relate to the simmering and complex issue surrounding the problems of undocumented residents largely of Haitian origin, about which more in a future column. However, private conversations with individuals in CARICOM suggest deeper rooted reasons for animosity including competition in trade, a personal distrust of a country rarely if ever visited, a perceived racism, and different cultural values. It is also for some an amplified version of the same animosity that exists between the Anglophone Caribbean and much of Latin America, although Cuba for other reasons remains an interesting exception.

This is not to suggest that there are not still significant shortcomings in the Dominican Republic.

There are internal political tensions that go far beyond what is common in the rest of the region, there are significant social inequalities, continuing and complex issues connected with ultra-nationalism and xenophobia continue, there are problems with restrictive economic practices, and there is a sometimes disturbing relationship between narcotics traffickers and some in politics, the judiciary and military. However, increasingly these are recognized as issues to be addressed if the country is to move forward.

What is clear is that while Dominican officials and its private sector recognize the importance of hemispheric inter-dependence and the imperatives of globalization, they will not be held back by the inaction of others. The unspoken message is that the Dominican Republic will partner economically with or without the Anglophone Caribbean.

David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org.