A second term for Luis Abinader
The triumphant re-election of incumbent President Luis Abinader on May 19, 2024, with almost 60% of the vote in the first round, came as no surprise. It was preceded by a very large victory for his party, the PRM (Modern Revolutionary Party), in the municipal elections of February 2024. It now manages 121 of the Dominican Republic's 158 mayoralties. The PRM also won the legislative and senatorial elections by a wide margin.
First elected in March 2020, in the midst of the Covid 19 pandemic, the president is a 57-year-old economist and entrepreneur. Born on July 12, 1967 in Santo Domingo, he was for many years the head of Abicor, a family business that owned several hotels, a cement plant and a university. The American-educated grandson of a Lebanese immigrant, his fortune is estimated at $75 million.
He initially suffered two defeats in the 2012 and 2016 presidential elections. In 2020, as the candidate of "change", his campaign slogan, he won the votes of the middle class and young people by embodying a break with the four consecutive terms of office of the PLD (Dominican Liberation Party). Former president Danilo Médina had succeeded in ensuring the country's economic stability, with average annual growth of 6% between 2014 and 2019, the fastest in Latin America and the Caribbean. But his mandate was marred by scandals linked to the Odebrecht affair. This Brazilian construction company had admitted paying bribes to numerous political leaders in Latin America, including $92 million in the Dominican Republic. The scandal brought crowds to the streets in January 2017 for unprecedented "green marches" in this small state of 11 million inhabitants.
Luis Abinader won the election in 2020, promising to overcome social inequalities and revive tourism, which had been damaged by the health crisis. The gamble paid off, with the Dominican Republic welcoming over ten million visitors in 2023. Tourism is a national priority, receiving around 20% of the country's budget and benefiting from numerous tax exemptions. Every year, the government develops new areas for vacationers. These include Pedernales and Miches, where Club Med has opened a luxury resort in 2019.
Luis Abinader has made the fight against inflation another of his priorities. This was brought down to 4.8% year-on-year in December 2023, after peaking in 2021 and 2022 as a result of the conflict in Ukraine. He has also tackled corruption by dismissing several thousand civil servants. The Dominican population is largely in agreement with his actions. In addition to the results at the ballot box, a poll carried out in January 2024 by the American Society/Council of the Americas showed that he is one of the most popular heads of state in Latin America (69% favorable opinion). The country's sound economic management and the fight against insecurity are now among the priorities of his second term. Added to this are the tense relations with the country's eastern neighbor: this issue was at the heart of the 2024 election.
Haiti: a neighbor in bad shape
A 380-kilometer border separates the two neighbors, who share the island of Hispaniola. Since his election in 2020, Dominican President Luis Abinader has been steadily tightening controls to prevent illegal immigration from Haiti. Since February 2022, a wall has been under construction along the border between the two countries. The first kilometers were erected in the Dajabon region at the north-western tip of the Dominican Republic. The Dominican government's aim is to control bilateral trade much more effectively, regulating migratory flows to combat mafias, drug trafficking and illegal arms sales.
In March 2024, the gang takeover of Port-au-Prince caused thousands of residents to flee, attempting to cross the border by bribing police officers and enriching smugglers. Undocumented immigrants are hunted down throughout the country and ruthlessly deported to Haiti. The 2010 earthquake in Port-au-Prince triggered a strong mobilization of the Dominican population on behalf of the victims. Since then, the two neighbors have been at loggerheads. At the end of 2013, the courts attempted to strip Dominican nationality from thousands of Haitian descendants who had come to work on local farms during the 20th century. Upset reactions led Congress to reverse this decision. In September 2023, the land, air and sea borders were completely closed. The Dominican Republic accused its neighbor of diverting water from the border river Massacre through the construction of an irrigation canal. The chaotic situation in Haiti, which has been in the throes of a political, economic and security crisis for several years, is not likely to improve economic relations between the two countries. And yet they remain essential, with one billion dollars worth of trade between the two countries every year.
A strong economy in the region
The Dominican Republic has been one of the most resilient and dynamic economies in Latin America and the Caribbean since the beginning of the 21st century, with average economic growth of 5% (compared with 2.3% for the region as a whole), GDP per capita more than doubling (to US$10,700), and the poverty rate falling by almost a third (from 40% to 28%), enabling the country to move forward. Since the Covid 19 pandemic, macroeconomic stability, despite a difficult international context, has been encouraged by a prudent fiscal policy and an appropriate monetary policy. However, the economy still faces many challenges in boosting its growth potential and strengthening its climate resilience.
In 2023, it remains highly dependent on the USA (54% of exports and over 50% of imports). The USA remains the Dominican Republic's main trading partner, and every year more so. The Dominican economy is therefore largely impacted by the health of the American market. Next come China (8% of trade, deficit of 3.4 billion) and Mexico (2% of trade). France remains a very modest partner: 18th supplier with a 0.94% share and 28th customer with a 0.32% share.
Exports reached $13.7 billion in 2022. The main mineral export is gold, which accounts for 68% of mineral exports, or $1.3 billion. Agricultural exports for the domestic market are peppers and bananas. Domestic industrial exports rose by 26.3% to $3.2 billion, driven by steel bars and chemical industry products.
Exports under the free zone regime reached USD 7.8 billion in 2022. They represent 57% of the country's total exports. This result is mainly due to exports of medical instruments and supplies, manufactured tobacco and jewelry.
Priorities for the coming years will be to improve the quality of education (4% of GDP), in particular to strengthen teacher training, develop the quality of public services and prepare the country for the effects of climate change.
The place of tourism in the Dominican landscape
Well-known as an exporter of tobacco, sugar and bananas, the Dominican Republic is at the forefront of the tourism sector, which outstrips agriculture in terms of employment. The country welcomes the most visitors in the Caribbean, accounting for 16% of all tourists visiting this part of the world. Eleven million visitors are expected in 2024, after 10 million in 2023. These figures are 22% higher than in 2022 and 36% higher than in 2019.
The breakdown by country of origin shows a spectacular drop in arrivals from Russia due to the war in Ukraine (24,000 in 2023 versus 183,000 in 2021).
At the top of the visitor list are nationals of the United States (2,578,292 in 2023), followed by Canadians (893,742). Next in line are Colombians, Argentinians and neighbors from nearby Puerto Rico, who benefit from numerous sea and air links, followed by Spaniards and English. The French numbered 161,385 in 2023. The discontinuation of Air France and Corsair services to the island brought a halt to the steady increase in the number of visitors from France. But in the spring of 2024, French tour operators are seeing an increase in bookings and lower prices for the coming months.
Tourism is the country's main source of foreign currency. Successive governments have invested heavily in this sector, and numerous tax incentives have been introduced to encourage private investment. Ecotourism is on the rise, offering an alternative to the all-inclusive hotels that occupy the Punta Cana region in particular.
Management of the Covid 19 pandemic has proved effective. The World Tourism Organization was delighted. The borders were reopened to holidaymakers in winter 2020. A meeting of the region's tourism ministers led to the signing in Punta Cana of a declaration stating that tourism is an absolute priority for the Americas, calling on governments to show support for businesses in the sector, and stressing the importance of re-establishing a bond of trust with travelers.
