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Overview

  • Update on COVID-19 (as of May 13th, 2020):

    The World Bank Group is working closely with partners to respond to the global pandemic in the Caribbean and around the world. For information on coronavirus and the global response, please visit: https://www.worldbank.org/en/who-we-are/news/coronavirus-covid19

    The Dominican Republic received US$150 million from a contingent credit line in March. The World Bank stands ready to continue supporting our partners in the Dominican Republic and will provide updates on actions being taken.

    The Dominican Republic (DR) has enjoyed strong economic growth in recent years, averaging 5.3 percent annually between 1993 and 2018, one of the fastest rates in the Latin America and the Caribbean (LAC) region. The pace accelerated to an average of 6.3 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. Using the Latin America and the Caribbean regional poverty lines, poverty was reduced from 34.4 percent to 19.9 percent while the proportion of the middle class rose from 24 percent to 37 percent between 2008 and 2016, outnumbering the poor for the first time in 2014. However, the vulnerable population is the largest income group in the country (41 percent), with risks of falling back into poverty if a shock materializes. The official national poverty rate fell from 22.8 percent in 2018 to 21.0 percent in 2019, with more than 2 million people in poverty. The Gini coefficient decreased by 2.5 points from 49.6 in 2008 to 47.1 in 2016 and is below regional inequality levels throughout the period. Lack of access to quality infrastructure is strongly correlated with poverty at the provincial level. Between 2000 and 2016, there was a notable expansion in sanitation, especially in rural areas. However, improved access to services is often not correlated with improved quality.

    If the DR wants to achieve its goal of becoming a high-income country by 2030, it must improve the fiscal balance, build its human capital, promote a better business environment, enhance management of natural resources, improve resilience to disasters and climate-related risks, and increase policy-making transparency and accountability.

    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.  Presidential and congressional elections are scheduled to be held in July 2020.

    The government has doubled education spending as a percentage of GDP since 2013 and implemented a series of reforms to improve learning outcomes. The government has also joined the World Bank’s Human Capital Project, which provides a platform for countries to share experiences of improving human capital outcomes. These decisions — together with the choice to take part in the OECD’s Programme for International Student Assessment (PISA) in 2015 and 2018 — are important steps toward tackling the barriers to human capital development. According to the 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, so much progress remains to be made. 

    Nevertheless, the COVID-19 (novel coronavirus) outbreak is challenging the Dominican Republic’s ability to maintain stable economic growth and continued poverty reduction due to the local, regional, and international impacts of the pandemic. The major slowdown in the global economy poses risks given the DR’s dependence on international tourism and exports.  Domestically, the crisis is impacting both formal and informal employment and heightening vulnerabilities of the already vulnerable population.

    Last Updated: May 13, 2020

  • The World Bank Group (WBG) strategy in the DR is based on strengthening the conditions for equitable growth; improving the delivery of services for the poor; and building resilience. Over the past decade, the WBG has been engaged in the areas of growth and competitiveness, public sector institutions, electricity, human capital, and environmental and natural resource resilience.

    As of April 2020, the IBRD portfolio totals US$575 million: US$425 million for four projects and US$150 million for a Catastrophe Deferred Drawdown Option (CAT-DDO) credit line.  The International Finance Corporation, the private sector arm of the WBG, has an active investment portfolio of US$514.7 million in eight projects, including the mobilization of US$212.2 million from other lenders. The Multilateral Investment Guarantee Agency (MIGA) has provided US$64.9 million in political risk insurance for a road infrastructure project.

    Following a request from the Government of the Dominican Republic, on March 24, 2020 the World Bank released a US$150 million that were part of contingent credit line to support the country’s efforts to implement emergency measures to contain the spread of COVID-19 and manage the impact of the pandemic. The Cat-DDO was the first of its kind in the Caribbean and supported a series of Government reforms to improve its institutional and regulatory framework for disaster resilience, including health emergencies, in compliance with international regulations mandated by the Pan American Health Organization and World Health Organization.

    The WBG’s advisory and analytical work has contributed to improving the government’s capacity in fiscal management, competitiveness, resilience, trade, education and health. Currently analytical work is related to infrastructure governance, jobs, and a Public Expenditure Review (PER) of critical sectors.

    Going forward, the WBG is increasing collaboration between WB and IFC in areas such as electricity, access to finance (SMEs and capital markets), and enabling public-private partnerships, in line with Government priorities. Also, the WBG prioritizes fiscal sustainability and social inclusion in its dialogue with the Government for a strategy in the DR.

    Last Updated: May 13, 2020

  • Projects financed by the World Bank Group have yielded important results in recent years, including:

    ·       The rehabilitation of more than 500 km of power lines has reduced electricity losses and guaranteed 24-hour service to 105,000 poor clients.

    ·       The restoration of three dams after the Olga and Noel storms has improved flood reduction, water supply, irrigation, hydropower generation, and environmental conservation.

    ·       The improvement of some 24 irrigation schemes has benefitted 18,779 fruit and vegetable farmers, improving local and national food security.

    ·       The restoration of water treatment facilities in the cities of Santo Domingo (CAASD) and Santiago (CORAASAN) has provided over one million gallons of safe drinking water to 750,000 people.

    ·       The launch of a wastewater treatment plant and a submarine outfall is benefiting 139,000 people in Puerto Plata, a major tourist destination.

    ·       The renewal of irrigation systems across the country will service more than 37,200 hectares of land with improved telemetry systems that measure river water flows, helping to increase agricultural output for more than 18,700 farmers.

    ·       Thirty-one poor municipalities have received training on participatory budgeting, development planning, financial management, procurement and contracting, human resources, and municipal services.

    ·       The national public system for the procurement and distribution of medicines in public hospitals has been strengthened, helping to cut the costs of antibiotics, insulin, and other medicines.

    ·       A competitive selection system has been introduced to raise the academic standards of new teachers and improve the quality of education. Diagnostic learning assessments of all third-grade students were completed, and the results were delivered to schools and the Ministry of Education to help them improve planning, adjust teacher training, and support decision-making.

    ·       The government has established an advanced legal framework for disaster risk management and put in place an epidemiologic surveillance system and rapid response mechanism to speed up the detection and management of disease outbreaks.

    ·       Criminal Justice system leaders have been trained to accelerate judicial processes through the “100 Days Challenge,” making it possible for more than 3,600 cases of robbery and gender-based violence to get solved in 100 days.

    ·       The DR has passed an insolvency law to speed up and reduce the cost of commercial restructuring and has simplified its online business registration. The country, as well, is one of the world’s top 50 economies where trading across borders is easiest.

    ·       A total of 221,133 entrepreneurs and MSMEs, of which 57.6 percent are women or women-led businesses, have benefited from improved access to finance.

    ·       Over 300,000 individuals have received social protection benefits, and 59,731 families (around 191,000 individuals) have been registered in the conditional cash transfer program for the first time.

    Last Updated: May 13, 2020

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LENDING

Dominican Republic: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Additional Resources

Country Office Contacts

DOMINICAN REPUBLIC +809 872 7300
Alejandra De La Paz
Ave. Lope de Vega No. 29, Torre Novo-Centro, Piso 10, Ensanche Naco, Santo Domingo
adelapaz@worldbank.org