Dominican Republic: Political and Economic Conditions and Relations with the United States

Publication Date: March 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

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Abstract:

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 (DRCAFTA), coordinated by Larry Storrs. This report will be updated periodically.