The Dominican Republic (DR) has enjoyed one of the strongest growth rates in Latin America and the Caribbean over the past 25 years. Over the last two years, the share of Dominicans living in poverty (about 152 Dominican pesos a day) has also substantially declined from 36.4 percent in 2014 to 30.5 percent in 2016, according to official estimates. Yet, social spending in the DR remains low compared to the rest of the region; on average 1.6 percent of GDP in health compared to regional average of 4.5 percent. In addition, deficiencies in the reliability and quality of water and electricity services are affecting key drivers of growth including tourism, agriculture, and manufacturing.
According to the World Bank Group’s Doing Business 2017, the Dominican Republic made getting an electricity connection faster and paying taxes less costly. However, in spite of improvements to the business climate further reforms are needed to maintain the country’s competitiveness in the region and beyond.
Challenges for inclusive growth
President Danilo Medina and the Dominican Liberation Party won a second election victory in May 2016 after a constitutional reform in 2015 that allowed him to run for a second term in office.
Recent World Bank Policy Notes “Building a Better Future Together” highlight three priorities to bring greater and sustained prosperity to all citizens:
- Greater productive inclusion, through a labor market with better human capital and greater participation of women, links between foreign investment and the local economy, and increased competitiveness.
- Public expenditure that is sufficient and effective in the context of limited fiscal space.
- Increased resilience to climate change and natural disasters, and improved natural resource management to sustain high levels of growth.
Last Updated: Apr 10, 2017