Dominicans - Economy

Subsistence and Commercial Activities. Throughout most of its history, the Dominican economy has been based largely on the production and export of sugarcane. Sugarcane is still the biggest cash crop grown in the Dominican Republic, with coffee and cocoa being the other most important export crops. Agriculture continues to be the largest source of employment in the Dominican Republic, but mining has recently surpassed sugar as the biggest source of export earnings. Tourism is the most rapidly growing sector of the Dominican economy, with receipts in 1990 of U.S.$944 million. With the relative stability of Dominican democracy since the 1970s, tax incentives for building tourist facilities, the most hotel rooms of any country in the Caribbean, and beautiful uncluttered beaches, tourism is now the largest source of foreign exchange. Manufacturing, especially in the Free Trade Zones (FTZ), is also a rapidly growing sector of the Dominican economy.

Industrial Arts. The three main industrial activities in the Dominican Republic are mining, manufacturing, and utilities. In 1991 mining accounted for 33.5 percent of the total earnings from exports. Ferro-nickel is the major mineral mined in the country; bauxite, gold, and silver are also extracted. Manufacturing accounted for 16.1 percent of the Dominican gross domestic product in 1991. A rapidly growing part of the Dominican manufacturing sector are the FTZ being established by foreign multinational corporations. In these FTZ, the main activity is the assembly of products (mainly textiles, garments, and light electronic goods) intended for sale in nations such as the United States. Assembly industries locate in these zones because there they are permitted to pay low wages for laborintensive activities and because the Dominican government grants exemptions from duties and taxes on exports from FTZ. Sixteen FTZ had been established in the Dominican Republic by 1991, comprising more than 300 companies, which employed around 120,000 workers.

Trade. In 1991 the Dominican Republic had a trade deficit of U.S.$1,070.5 million, with the United States receiving 56 percent of Dominican exports. The other major trading partners of the Dominican Republic are Venezuela and Mexico. The main exports from the Dominican Republic in 1991 were raw sugar and ferro-nickel.

Division of Labor. In 1991 an estimated 34.9 percent of Dominicans worked in the agricultural sector, 28.1 percent were employed in industry, and many others worked in the service sector, which caters mainly to tourism. Labor is divided along the lines of ethnicity, class, and gender. Light-skinned individuals control most of business, finance, government, and other high-status professions, whereas darker-skinned individuals are predominant in the military officer corps and constitute much of the new middle class. More than three-quarters of the workers in the free trade zones are women; employers can pay them low wages and keep them from forming strong labor unions.

Land Tenure. Land-tenure patterns reflect both Dominican and international politics. Sugar and cattle are significant products for the Dominican economy, and land-tenure patterns associated with sugar production and cattle raising have changed over time. The 1916 U.S. invasion is often conceptualized an action under the Monroe Doctrine to protect regional security and counter European "interference" in the Americas, especially to stop German expansion in the region; however, the invasion was also a means to protect U.S. sugar producers in the Dominican Republic. World War I destroyed the European sugar-beet industry, allowing for the rapid expansion of Dominican sugar production. During the U.S. occupation, U.S. military authorities enacted legislation to facilitate the takeover of Dominican land by U.S. sugar growers. The 1920 Law Registration Act was designed to break up the communal lands and transfer them into private ownership. In 1925, one year following the withdrawal of U.S. troops, eleven of the twenty-one sugar mills in the Dominican Republic belonged to U.S. corporations, and 98 percent of the sugar exports went to the United States.

Cattle raising, an important source and symbol of wealth in the Dominican countryside, was feasible for many people because the animals were branded and then left to graze freely on open land. In the 1930s Trujillo expropriated large portions of land, reducing the amount available for free grazing. Those lands became further reduced in the 1950s when Trujillo established "La Zona," a law requiring the enclosure of large livestock that effectively prohibited free grazing. In the 1960s and 1970s the Balaguer government tried to increase cattle production for meat exports and, in so doing, created state-subsidized credits for cattle production. Some of these credits made it easier and more rewarding for people to buy parcels of land on which to graze their cattle.

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