I mentioned that the economy of the Dominican Republic is having a rough time. This is a real shame, because the country has rich natural resources, especially agricultural and a strong tourism sector. Earlier this year, a bank merger was on the cards and, during the accountancy and legal work before the deal serious issues were uncovered. The target bank, BanInter, was found to have parallel off-accounts structures. When the news leaked out, the bank effectively collapsed and senior officers were arrested.

The moves designed to cause stability did not have the desired effect, and the economy has become very ill. At the time of writing part 3 of this article in mid-August 2003, the exchange rate of the Peso with the dollar is officially 31.9, but is more probably in the region of 35.  When my wife and I moved to the Dominican Republic only two years ago, the rate was considered stable in the long term at between 16 and 17!

If you are an expatriate, and your savings and income are in major currencies like the pound, euro or dollar, many aspects of life in the Dominican Republic have become much less expensive. For example, the average salary paid to a maid is in the region of 3,000 Pesos per month.  In foreign currency terms, this cost has halved in two years.  As basic grade police officers earn the same level of salary, one aspect of the turmoil might be a return of police in the streets looking for “spot fines” from drivers.

Being a small island-based country, however, means that many imports, particularly of economically vital supplies like oil, are sold in dollars.  The knock-on effect of the devaluation crisis will be rapid inflation, and misery for the country’s population.  We have seen corporate scandals several times in the developed world over the last few years, but the size of European or US economies means that they are knocked onto the ropes and then shake their heads and carry on.  For the Dominican Republic, this level of damage is hard to sustain, and although the country has proved itself to be a good fighter for many years, the casualty is heading for intensive care at the moment.

Most citizens despair that their leaders appear unable or unwilling to steer the country out of its current problems. My take on all this, for what it is worth, is that most of the politics in Latin America is straightforwardly populist.  Policies are vague and often designed to offend nobody.  Alliances change to suit circumstances. There is rarely an election where someone will stand on the platform of a vision to work to improve the lot of country and its entire people, because that is seen as “radical”, and therefore suspect. You will hear, “We don’t want another Chavez here”. Whilst there may be some truth in that sentiment, my observation is that the personality-based, populist politics of the Dominican Republic and the region do not fit them well to meet crises, which in the modern world are all too frequent.

I hope that this isn’t making you all feel like you are reading a school lecture or a church sermon!

My experiences in the Dominican Republic have been enjoyable, for the most part, and have made me more humble.  So many of the things that we take for granted in countries like the UK or US are not shared by a large part of the world, such as adequate housing, safe water and reasonable incomes.  When our maid, the wonderful Miguelina, first invited us to lunch, we came away almost in tears after seeing for the first time in our lives with our own eyes what life in a shantytown is like. But, and this is so important, Miguelina is a bright woman and a very proud Dominican. As an example; she delights in making us good local food, because our Western stuff is so bad (in her opinion).  She has raised beautiful children to be self-confident and happy.