The Dominican Republic has enjoyed strong economic growth in recent years, averaging 5.1 percent annually between 2008 and 2018, the second highest in LAC. The pace accelerated to an average of 6.6 percent per year between 2014 and 2018 -- and 7 percent in 2018, fueled by robust domestic demand. It was the fastest-growing LAC economy over that five-year period.
The sustained growth has reduced poverty and inequality, helping to expand the middle class. Despite the progress, if the DR wants to achieve its goal of becoming a high-income country by 2030, it must contend with six priority challenges identified in the World Bank's most recent Systematic Country Diagnostic. It must improve the fiscal balance, build up its human capital, promote a better business environment, enhance the management of natural resources, improve resilience to disasters and climate-related risks, and increase policymaking transparency and accountability.
After winning a second mandate in 2016, the government put greater focus on equity and inclusion, human capital, natural resource management, and competitiveness. Building on the long-term National Development Strategy (Vision 2030), the government drafted the 2016-2020 Government Plan at the start of its second term. The plan makes more inclusive economic growth a core strategy, and sets a target of deepening the reforms begun during the previous four-year term. The next general elections are due to be held in May 2020.
The government has expressed interest in joining the WBG’s Human Capital Project. This decision — together with the government’s voluntary choice in 2015 to take part in the OECD’s Programme for International Student Assessment (PISA) — demonstrates a commitment to tackle the barriers to human capital development with a comprehensive strategy. According to the WBG’s Human Capital Index (HCI), a child born in the DR today will be 49 percent as productive when they grow up as they could be if they received a complete education and proper healthcare.
Going forward, the WBG will put more emphasis on using the Maximizing Finance for Development (MFD) approach. The IFC and WB interventions are well coordinated. There has been increased collaboration in areas such as electricity, access to finance (SMEs and capital markets), and enabling PPPs. The WBG plans to prioritize fiscal sustainability and social inclusion in its program for the country.
Last Updated: Apr 01, 2019