The Economist and his comments on the Dominican Republic

On May 25, a report by the Economic Intelligence Unit of The Economist magazine stated the following: “The Caribbean nation (referring to the Dominican Republic) is entering a crisis, as are El Salvador, Nicaragua, Costa Rica and Panama, with a relatively high audience. debt, substantial external imbalances and high inflation, and neither is a major commodity exporter.

A year ago, the same Unit declared: “The Dominican Republic is ready to be one of the Latin American countries that overcomes the recession induced by the pandemic more quickly”.

Why this change of perspective?

Let’s see the IMF report on May 16 after looking at every corner of our economy, which The Economist doesn’t.

“The Dominican Republic’s economy has continued to show remarkable resilience in the face of global shocks, which has been underpinned by appropriate policies, including monetary policy support, an agile COVID vaccination campaign and a reopening which allowed it to take full advantage of the recovery of the world economy last year. This resilience and the strong signs of the sustainability of the policies (TRANSPARENCY) place the Dominican economy in a good position to face international challenges. emerging.

Where is the root of the problem? Because Panama, Costa Rica and the Dominican Republic’s economic numbers so far in 2022 are much better than those of most South American countries.

Debt problems have Argentina and Brazil, major producers and exporters of food commodities, piling up year-on-year inflation of 58% and 12.5% ​​in April. And so?

We are among the ten countries with the lowest debt/GDP ratio. However, budget deficits are much higher in South America than in Central America and the Caribbean.

The root of this comment is that the Dominican Republic and Central America do not produce oil and export raw materials, while in South America many produce and export both and are better able to control prices and their external imbalances.

However, The Economist forgot something: we have a lot of oil that is not necessarily black. And this is called tourism, remittances, foreign investments, mining (gold, ferronickel) and our exports, including free zones, already exceed 12 billion dollars a year.

The crisis will get worse, but we will be much better prepared to deal with it than most countries in the region.

About Matthew Berkey

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