Dominican Republic: Political and Economic Conditions and Relations with the United States Page: 1 of 6
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Order Code RS21718
Updated March 8, 2005
CR8 Report for Congress
Received through the CRS Web
Dominican Republic: Political and
Economic Conditions and Relations
with the United States
Clare M. Ribando
Analyst in Latin American Affairs
Foreign Affairs, Defense, and Trade Division
President Leonel Fernandez of the Dominican Liberation Party (PLD), who served
as president previously (1996-2000), took office on August 16, 2004. Press reports
indicate that, seven months into his four-year term, President Fernandez has restored
some confidence in the Dominican economy. Since August 2004, the Dominican
currency has risen 30% against the U.S. dollar and inflation has declined dramatically.
The Fernandez administration has struggled, however, to cope with rising crime rates
and persistent electricity shortages. On December 28, 2004, President Fernandez signed
a bill repealing a Dominican tax on drinks containing high fructose corn syrup, a major
U.S. product, that had threatened the country's chances of being included in the U.S.-
Dominican Republic-Central American Free Trade Agreement (DR-CAFTA). On
January 31, 2005, the IMF approved a new $670 million loan agreement with the
Dominican Republic. For further information, see CRS Report RL32322, Central
America and the Dominican Republic in the Context of the Free Trade Agreement (DR-
CAFTA), coordinated by Larry Storrs. This report will be updated periodically.
The Dominican Republic occupies the eastern two-thirds of the Caribbean island of
Hispaniola, which it shares with Haiti. A population of about 8.8 million occupy an area
about the size of New Hampshire and Vermont combined. With a per capita income of
$2,230, it is considered a lower middle-income country. After fighting to achieve its
independence from Spain in 1821 and then Haiti in 1844, the Dominican Republic
embarked upon a bumpy road toward its current democratic form of government,
characterized by long episodes of military dictatorship and frequent coups.
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Dominican Republic: Political and Economic Conditions and Relations with the United States, report, March 8, 2005; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc816876/m1/1/: accessed September 24, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.