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The Dominican Republic - Economy
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The Dominican
Republic is the biggest
economy in the Caribbean and Central America
is a lower middle-income developing country,
primarily dependent on agriculture, trade,
and services, especially tourism. 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. According to
a 1999 International Monetary Fund report,
remittances from Dominican Americans, are
estimated to be about $1.5 billion per year.
Most of these funds are used to cover basic
household needs such as shelter, food,
clothing, health care and education.
Secondarily, remittances have financed small
businesses and other productive activities.
The Dominican
Republic's most important
trading partner is the United States (75% of
export revenues). Other markets include
Canada, Western Europe, and Japan. The
country exports free-trade-zone manufactured
products (garments, medical devices, etc.),
nickel, sugar, coffee, cacao, and tobacco.
It imports petroleum, industrial raw
materials, capital goods, and foodstuffs. On
September 5, 2005, the Dominican Congress
ratified a free trade agreement with the
U.S. and five Central American countries,
known as CAFTA-DR. The CAFTA-DR agreement
entered into force for the Dominican
Republic on March 1, 2007. The total stock
of U.S. foreign direct investment (FDI) in
Dominican Republic as of 2006 was U.S. $3.3
billion, much of it directed to the energy
and tourism sectors, to free trade zones,
and to the telecommunications sector.
Remittances were close to $2.7 billion in
2006. |
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