Dominican Republic Taino Indians Used

Dominican Republic

Taino Indians used to inhabit the island, which was named by Christopher Columbus Hispaniola for at least 5,000 years prior to his discovery of America for the Europeans. The inhabitants of Taino were very gentle, liberal, and accommodating with the Europeans, due to which, they became soft targets to rule over them. Apart from that, the Europeans also noted that Taino had gold ornaments and jewelry from the gold deposits found in the rivers of Hispaniola. Afterwards, the Spaniards became atrocious, and to set themselves free from the clutches of Spaniards, several adopted the ploy of deserting their villages and setting their crops on fire. They escaped to the less welcoming regions of the island, constituting Cimarron colonies, or escaped to other islands and also into the mainland. Smallpox began in the island in 1518 and with it the death rate of the Tainos stepped up.

Following 25 years of colonial rule by Spanish there were less than 50,000 Taino inhabiting the Spanish controlled regions of the island. In the space of the next generation, among the living roughly everybody had become biologically intermingled with the Spaniards, Africans, or other mixed breed people and had become the tripartite people currently recognized as Dominicans. Certain modern historians have categorized the behavior of Spaniards meted out against the Taino as mass murders. By 1515, the Spaniards understood that the gold mines of Hispaniola were being depleted. Roughly all of a sudden, the colony that was usually known as Santo Domingo after its capital city was deserted and just a few numbers of Spanish immigrants stayed back. Hispaniola's significance as a colony came to be more and more diminished. (History of the Dominican Republic)

Till the middle of the 17th century, the profile of the settlers consisted of smugglers, escaped orderly servants and crewmembers of several European ships in the islands of Tortuga, situated to the western part of Cap Haiten. This region turned out to be the selection platform for voyage charted by the several infamous pirates, including the prominent British pirate Henry Morgan. The western third of Hispaniola came under French occupation known as Saint Domingue in 1697 and till the next century grew into, till then, one of the wealthiest settlement in the globe. Encouraged by the episodes happening in France at the time of the French Revolution and through the clashes among the whites and mulattos in the Saint Domingue, slave mutiny erupted in the French colony during 1791, and was ultimately spearheaded by Toussaint L'ouverture a French Black man.

Even though L'ouverture and his descendant, Jean-Jacques Dessalines was successful in restoring peace and refurbishing the economy of Saint Domingue that has been severely damaged, the new leader in France, Napoleon Bonaparte, was unable to bear that the wealthiest colony was France was headed by a Black man. The Black militia certainly overthrew the French and the Blacks proclaimed their freedom, setting up the Republic of Haiti on the Western third of the island of Hispaniola. The French reclaimed the administration of the eastern portion of the island, nevertheless, and thereafter during 1809 restored this piece to the Royal Spanish regime. In 1882, the terrified French would unleash one more voyage from Spanish Santo Domingo to restore slavery, which they had intimidated to perform previously, Haiti's president Jean-Pierre Boyer dispatched an army that attacked and annexed the eastern region of Hispaniola. (History of the Dominican Republic)

For the forthcoming 22 years, the entire island of Hispaniola came under Haitian rule-Dominicans term the phase "The Haitian Occupation." During the 1830s a subversive confrontation group La, Trinitaria was prearranged under the headship of Juan Pablo Duarte. Following several rounds of assaults on the Haitian militia and due to the conflict within the internal Haitians, the Haitians withdrew in the end. The eastern two-thirds of Hispaniola were formally declared independent on February 27, 1844 and were named as Republic Dominicana or Dominican Republic was given. Thus over these years till the time of the independence, the Spaniards, the French and the Haitians fully exploited its wealth and natural resources and led the colony to decline. Mismanagement and corruption were the hallmarks of the colonial rule during these periods.

The La Trinitaria leaders of the crusade for independence for Dominican independence nearly at once faced political resistance from insiders, and in a span of six months were overthrown from authority. Then onwards, the Dominic Republic almost all the time remained under the regime of caudillos, strong leaders who governed the nation in the manner as if it were their personal estate. Since the following 70 years, the Dominican Republic experienced several spate of civil war and was exemplified by political imbalance and economic turmoil. Since the subsequent 25 years, the leadership oscillated between General Pedro Santana and General Buenaventura Baez, whose soldiers relentlessly battled with one another for securing power for running the administration. During 1861, General Pedro Santana requested the Spanish to come back and rule their erstwhile colony.

However, following a limited span of misconduct by the Spaniards, the Dominicans understood their folly and evacuated the Spaniards such that they will be able to refurbish the Republic. One more endeavor was done for stability when Dominicans requested the U.S. To occupy after a decade. Even though U.S. President Grant was in favor of the invitation, it was beat by the U.S. Congress and the concept was discarded. In the 19th century, the economy of the country changed from ranching to other avenues of income. In the southwestern area, a novel industry sprang up with the felling and exporting of valuable woods such as mahogany, oak and guayacan. In the northern plain lands and valleys surrounding Santiago, industry concentrated on nurturing tobacco for some of the world's most excellent, and on coffee. In 1882, General Ulysses Heureux assumed power. His vicious despotism comprised of a dishonest rule, which sustained power by brutal subjugation of his detractors. General Heureux managed the matters of the country so badly that it frequently fluctuated to and fro between economic crisis and devaluations of currency. After his killing in 1899, many persons assumed power, but that was shortlived and was defeated by their political detractors, and the nation's domestic condition endlessly worsened into commotion. (History of the Dominican Republic)

By 1904, the economy was a disaster, and overseas governments were intimidating to employ arm-twisting measures to recover outstanding loans. The urgency to avoid European interference, the United States took charge of the management of Dominican customs and receipts in 1905. (Dominican Republic History and Development of the Armed forces) by the dawn of the century, the sugar industry was revitalized, and therefore several Americans arrived at the Dominican Republic to purchase plantations which they arrived to control this important sector of the economy. During 1916, Americans desirous of enlarging the control and power in the Dominican Republic used the First World War as a pretext to deploy U.S. Marines to safeguard against weakness to big European forces like Germany. U.S. employed this case to dispatch U.S. Marines and to colonize Haiti. The U.S. occupied Dominican Republic for 8 years, and right from the initial stages, the Americans rapidly seized total command. They ruled for total closure of the Dominican Army and compelled the citizens to shun their weapons.

A dummy government was established and coerced to abide by the orders from the colonial U.S. Marine commanders. A modernization of the legal system was made to benefit American investors, permitting them to achieve hold of the bigger sectors of economy and lift Customs and import restrictions for any American products being moved into the Dominican Republic. As a result of these modifications, a lot of Dominican businessmen suffered losses. However, the sliver lining was that the political violence was eradicated and several enhancements in the infrastructure of the Dominican Republic and educational system were initiated. While American capture, the chief of the Dominican Army was an erstwhile telegraph clerk named Rafael Leonidas Trujillo. This corrupt honcho employed his position in ruling administration to gather a heavy amount of personal fortune from misappropriation, first of all entailing the purchase of military ammunition.

Even though the Dominican Republic had its inaugural comparatively free elections after the U.S. troops quit in 1924, within small period Trujillo succeeded in thwarting any restructuring actions, and in 1930 he assumed full control of power. Employing the Army as his initiator, Trujillo spared no effort in forming a suppressive dictatorship and formed a huge chain of emissaries to remove any possible detractors. His strongmen did not dither to employ threats, torment, or killing of political enemies to scare and subjugate the citizens to make sure that his regime continues and to hoard his wealth. Prior to that, since a long period he strengthened his power to such a level that he started to handle the Dominican Republic as if it were his independent monarchy. Trujillo got American favor of his leadership as he presented liberal and supporting terms to the American businessmen to put in capital in the Dominican Republic. However, following several years of seizing ownership of the bulk of the vital businesses, he started to have stake in the important American-owned industries also, especially, the extremely vital -sugar industry. These takeover ploys connected with Trujillo's interfering in the internal matters of adjacent nations, resulted in more and more U.S. dissatisfaction with the autocrat of the Dominican Republic. (History of the Dominican Republic)

The Trujillo administration for more than thirty years made massive spending in building infrastructure, however, the despot himself, his family, and his associates cornered the major part of the monetary gains. Trujillo's chief avenues of gaining his riches were the national sugar industry that he speedily scaled up during the 1950s in spite of a subdued global market. In the route to setting up his massive fortune, he evicted farmers from their land, plundered the state treasury, and built a private estate akin to those of Somoza and the Duvelier families in Nicaragua and Haiti, respectively. Prior to his murder in 1961, Trujillo and his close aides allegedly had more than 600,000 hectares of fertile land and 60% of country's sugar, cement, tobacco, and shipping assets. This huge wealth covered eighty-seven enterprises, covering twelve of the nation's fifteen sugar mills. Even though the economy enjoyed balanced progress under Trujillo's regime, approximately 6% annually during the 1950s, the uneven sharing of that growth made the rural Dominicans poor as deeply as were an of the equivalents in other regions of the Western Hemisphere. (Dominican Republic: Growth and Structure of the Economy)

Trujillo clung on to power for more than 30 years; however, towards the final stages of his regime, he was successful in distancing his most ardent followers that included the U.S. also. When he breathed his last on May 20, 1961, he was among the wealthiest men in the universe, having hoarded a private fortune projected to be more than $500 million U.S. dollars, including possession of majority of the big industries of the nation and an important segment of the productive farmlands, when the economy too. (History of the Dominican Republic) Following the killing of Trujillo, his Vice President during that period, Dr. Joaquin Balaquer, assumed charge of the presidency. After one and half year, Juan Bosch belonging to the Dominican Revolutionary Party assumed the office of the President. (Dominican Republic: U.S. Department of State Post Reports)

The time between Trujillo's killing and the civil war which took place in 1965 was disordered financially and politically as well. A state of flux impelled escape of capital. Whereas the burden on spending went up primarily due to social programs when Juan Bosch Gavino was the President, bureaucratic turmoil hindered the collection of required revenues. The economy of the nation was sustained by some degree through concoction of cash from overseas in the shape of foreign aid, primarily from the United States and loans. (Dominican Republic: Growth and Structure of the Economy) the socialist program of Bosch was adjudged to be very strict by the U.S. who during that time was suspicious about the potential popularity of the Communism following Fidel Castro's revolution in Cuba that was immensely successful.

The next 2 years witnessed political and economic confusion in the Dominican Republic. This came to an end while the disgruntled working classes, teamed up with a breakaway section of the Army, revolted and took steps to again set up constitutional order on April 24, 1965. After a year, the erstwhile leader Dr. Joaquin Balaquer was again appointed as President, with the U.S. support, which everybody believed that the election was manipulated. (History of the Dominican Republic) the time period from middle of 1960s to the middle of 1970s was manifested by speedier economic development and growth. Rising prices of petroleum and lowering prices for fundamental Dominican exports, nevertheless, played a part to a lull in the domestic economic growth starting in the later part of 1970s. (Dominican Republic: U.S. Department of State Post Reports)

Initiating in 1970, revenues calculated as a percentage of GDP came down continuously. Even since the year 1970 there is a sharp decline in the ratio of expenditure, as a result of the decrease in revenues as proportion to the total output. Declined revenues called upon an equivalent decline in the proportionate spending on social services that worsened the position of poorer Dominicans. (Country Studies: Economic Policy) Dominican citizens demonstrated their verdict of change by electing Dr. Antonio Guzman of the Dominican Revolutionary Party or PRD in the election of 1978. Guxman committed suicide prior to completion of his four-year tem during 1982 understanding the fact of involvement of close family members in rampant corruption and misappropriation of government money. (History of the Dominican Republic) Paradoxically, a major flow of fiscal resources in the decade 1980s resulted in due to the declined prices of goods and services entailed by government-subsidized enterprises, like the utility companies, many of which were created to cater to lower-income citizens. Provision for such subsidies started in the year 1970s during the period of affluent government resource. However, by 1980s they gave rise to the grave price distortions between government and market prices. (Country Studies: Economic Policy)

Several prices of basic consumer goods were fixed by the government controlled National Price Stabilization or Inespre. Regardless of Inespre's endeavors, prices of foods went up faster compared to all other prices during the 1980s. The pricing policies of Inespre were more in keeping with the political will than the economic actualities. The cost of essential foodstuffs were kept at unthinkably low levels, in part due to urban aggression frequently happened from endeavors to keep these prices at par with the free market. Maintaining the urban consumer prices at lower prices, called for the procurement of staple crops from Dominican peasants at less than reasonable value was a system that dejected the earnings and the living standards of rural Dominicans. (Dominican Republic: Monetary and Exchange-Rate Policies) Politicians were unwilling to lower price subsidies in favor of the poor, as the economy and destabilized widespread hopes for continued government backing continued to be high. (Country Studies: Economic Policy)

Weak business results and a massive debt burden resulted in the nation's balance of payments to record huge deficits during the 1980s. During 1987 the total deficit attained U.S.$593 million, or nearly 11% of GDP. This deficit funded depletion of the reserves and a rollback of the oil debt kept outstanding for Venezuela and Mexico. The current account of the nation remained persistently negative; it had not recorded an annual extra for more than decades. Large products trade deficits were the main reason behind deficits in the current account. (Dominican Republic: Balance of Payments) Fiscal deficits went up in the 1980s, however, as the fallout of declining reserves and mounting losses from price and exchange-rate subsidies to establishments belonging to the state. Revenues calculated as a percentage of GDP, came down from 16% in 1970 to a low of 10% in 1982, positioning the Dominican Republic lower compared to almost every Latin American nation in this group. Moderate incentive regulations framed to prompt industrialization during the 1960s and the 1970s remained the principal reason behind the depletion of the revenue base. These revenues came to an astounding low level in 1982, since the outcome of liberal tax cuts for the industry. Several economists condemned the contribution of fiscal exemptions in the industrialization of the nation as the Government in this way severely lost out urgently required revenues in support of job creation. (Country Studies: Economic Policy)

The implementation of fiscal policies was impacted by individual and political custom. For instance, a lot of business unlawfully obtained tax-emption status due to their closeness to the political circles, whereas other eligible enterprises did not. Among the rich Dominican it was usual to evade taxes. Nepotism at government ranks, especially among the parastatals was considered to likewise a normal feature. The absence of competitive tendering process on award of government construction contracts also played a part in beliefs of fiscal disorderliness. The average fiscal deficits stood at approximately 5% of GDP annually in the middle part 1980s to the later part of 1980s. The deficits were funded by minting extra pesos, a strategy which aggravated inflation. Subsequent governments showed absence of political resolve to tackle the structural shortfalls on both the expenditure and the revenue portions of the national budget. (Country Studies: Economic Policy)

When the economy was deteriorating tremendously Dr. Salvador Jorge Blanco, of the same political party succeeded Guzman as president. (History of the Dominican Republic) When Salvador Jorge Blanco attained victory in the 1992 elections, the PRD attained a majority in both houses of the Congress. In an endeavor to heal the sick economy, the Jorge government started to execute economic regulation and recovery strategies, inclusive of an ascetic program in collaboration with the International Monetary Fund or IMF. During April 1984, mounting prices of essential foodstuffs and insecurity regarding the ascetic procedures resulted in revolts. (History: (www.world66.com) Blanco carried on the prolonged tradition of Dominican Republic of awarding family members, close friends and political supporters with profitable governmental posts. The Dominican Republic witnessed extensive cases of corruption and misappropriation of government funds during his period. Later he was caught guilty of both and imprisoned for a period of 20 years. (History of the Dominican Republic)

Now let us look at the tax system prevailing during the regime of Dr. Salvador Jorge Blanco. During 1983, the government initiated a value added tax and started several ad hoc taxes on international trade, licensing, luxury items, and forex dealings. These novel taxes, nevertheless, did not compensate for the loss of revenue that had effected from the low rates of taxation on income and profits from businesses. One basic aspect of the tax system of the country was the low rates of taxes on income and profits. During 1985, income taxes accounted for just 0.6% of the GDP, far lower than the average of 2% of GDP for every developing nation. Moreover, the income tax was in effect regressive as it utilized a uniform rate and permitted a lot of waivers. (Country Studies: Economic Policy)

The most important modification in Dominican exchange strategy was attained while the Jorge government during 1985, abiding by the conditions of an IMF balancing policy, pegged the national currency in respect to the dollar, thus removing the prior wider black market. The pegged peso dropped to an exchange rate of U.S.$1 = RD$3.12, an official devaluation of more than 300% which resulted in a big jolt to the economy. Due to the devaluation, domestic prices went up and put a load on a lot of deprived people, whereas it gave a fillip to the export sector of the nation by way of newly competitive prices. (Dominican Republic: Monetary and Exchange-Rate Policies)

Completely, disappointed by the mismanagement and corruption of the leaders of the Dominican Revolutionary Party or DRP, the Dominicans fought the election in 1986 in favor of Dr. Joaquin Balaguer. (History of the Dominican Republic) When joining office during 1986, Balaguer gave efforts to revamp the economy by means of a public works construction program. In 1987, taxes on income and profits contributed for 19% of the net tax revenue. Due to the political muscle power of the regional and overseas business groups, the chances of important changes in this section of the taxation laws were remote. Apart from personal and corporate income taxes, goods and services and international taxes wee also taxed. Taxes on goods and services were equal to 36% of all taxes in 1987, while those on international trade had attained 43%, a quite steep share. Very high import tariffs and export taxes on essential commodity items comprised the majority of taxes on trade. (Country Studies: Economic Policy)

For the Dominican authorities, it proved simpler to manage and to ensure their collection compared to domestic taxes regardless of the reality that formed a lot of economic disincentives. Non-tax revenues, like government income from property and other equity gave 12% of the total revenues of the net revenues during the year 1987. (Country Studies: Economic Policy) However, as per official statistics exports during 1987 fell sharply to U.S.$718 million, a ten-year low. Diminished exports, in concert with the nation's biggest import bill of all times of U.S.$1.5 billion, resulted in trade deficit of nation's goods to attain the unparalleled and dangerous level of U.S.$832 million. Conventional exports suffered a continuous fall from 1984 to 1987 due to a drastic fall in sugar revenues. Dominican imports touched a never before U.S.$1.55 billion during 1987.

Still more appalling than the country's trade deficit, however, was its incapability to curtail import demand even as oil prices came down during the later part of 1980s. Non-oil imports went up, nevertheless, thus devastating the nation's balance of payments position and exposing the nation to be weak in the happening of one more increase of oil prices. (Dominican Republic: Foreign Economic Relations -Foreign Trade) Even so, by 1988, the nation came down into a 2-year economic depression, when there was an incidence of high inflation and currency devaluation. (History: (www.world66.com) the economy squeezed mainly reacting to government spending patterns. Balaguer's series of devaluation of the peso sustained the nation's mushrooming export sector and tourist business, but life became tougher for the poverty stricken Dominicans depended on fixed salaries. The elaborative fiscal policies of the administration also triggered unparalleled inflation wherein prices went up 60% in 1988 that deteriorated the economic state for poor people. (Dominican Republic: Growth and Structure of the Economy)

The external debt of Dominican Republic had increased to about U.S.$4 billion by 1989 that was estimated to be double that of the aggregate existed during 1980s. The internal debt enhanced during the 1970s, rarely more than a decade after Trujillo had paid it off, an event he had announced to be the financial emancipation of the nation. The following indebtedness was occurred in the light of a tenfold growth in the oil import bill, growingly adverse terms of trade, and unpredictable sugar prices. Prolonged balance-of - payment deficits, comparative easy reach to the loans from international commercial banks and the requirement of funds resulted by ambitious public sector projects quickly indebted the country; from 1975 to 1980, the national debt rushed from U.S.$700 million to about U.S.$2 billion. More deterioration in the terms of trade of the nation, unparalleled high interest rates and international recession enhanced the foreign debt in the 1980s, even in the absence of new commercial lending.

About 63% of public sector foreign debt during 1988 entailed from public institutions, out of which 20% to multilateral organizations and 43% to bilateral creditors. About 23% of the public sector foreign debt was raised from 90 commercial banks, and the rest were grouped under other categories like oil credits owed to Mexico and Venezuela. The constitution of the national debt, that prevailed rather stable during the decade, varied from the debt structure of Latin America as a whole in that so much more of the foreign liabilities of the region attributes to 57% commercial. In between 1983 to 1988, Dominican debt as a proportion of GDP enhanced from 48% to 94% indicating that debt was quickly surpassing economic output. In consequence to the frequent postponement, however, debt redemption as a percentage of total exports reduced from 23% in 1983 to 15% during 1988. 10. Economic problems along with the problems relating to the delivery of basic services - e.g., electricity, water, transportation - entailed popular displeasure that gave rise to regular protest, occasionally violent, inclusive of paralyzing nationwide strike in June 1989. (History: (www.world66.com)

As a result of the alienated and unorganized opposition parties during the next poll of 1990, Balaguer re-elected to hold the post. During his tenure as the President of the Dominican Republic, he had become almost as dictatorial as Trujillo. During such period the international community damned the Dominican government for their persistent exploitation of Haitian Braceros or sugar cane workers. It has been suspected that number of workers was compelled to do backbreaking work for prolonged hours under the hot sun, under the supervisions of armed guards. International observers indicated that laborers were compelled to sustain their life in appalling living conditions. Their payment was very low and mostly counted in terms of pennies for their hard work and was not even allowed to leave their places of employment, conditions that have been linked to slavery.

Being influenced by the international pressure all the Haitian workers were expatriated in June 1991. It is assumed that some of such deplorable working and living conditions persistently prevails even today for the Haitians in the Dominican Republic. Innumerable number of Haitians mostly work exerts their heavy manual labor and is very low paid being engaged mostly in the construction and agriculture sectors. The jobs are disdained by the considerable number of Dominican citizens. Taking into consideration the disorganized state of Haiti, it is explicable that anything obtainable in the Dominican Republic is greater than expected in terms of work and living conditions in line with the proverb, 'something is better than nothing'. (History of the Dominican Republic)

Balaguer came to power for the third term during 1994 at the age of 88 years of age in the election that the OAS and other international observers found to be completely manipulated. Innumerable numbers of the supporters of his main opponent, Jose Francisco Pena Gomez, of the Dominican Revolutionary Party or PRD, had been barred from the balloting. In an attempt to eliminate the chance of occurring of major violence, Balaguer and Pena Gomez negotiated and come to agreement whereby Balaguer assured to continue in power no longer than a couple of years and not to run for re-election after that. Dr. Leonel Fernandez and his Domincan Liberation Party or PLD removed Gomez due to the fact that Balaguer supported to assist Fernandez to come through back door and could succeed with attaining 51% of vote. The part of reforms exerted by Leonel Fernandez was influenced by his party attaining a majority in the elections for the National Assembly in May 1998. In 2000, Fernandez was elected out of office in considerably free and fair elections, especially by Dominican standards.

Irrespective of the fact that the country was being assisted from its larger economic growth and success in its history, voters elected Hipolito Mejia of Dominican Revolutionary Party as a result of their enhanced displeasure against the alleged corruption permeating the Fernandez administration. The election attained Hipolito and his party regulation of the executive branch, a majority in the upper house legislature, and near regulation of the lower house. Tourism and manufacturing sector till 2001 continued to uphold the economy of Dominican Republic with a significant seven percent average annual growth. Supplementing to the expansion in these sectors, the Dominican Republic gained substantive allowances from Dominicans residing outside the country, the most of whom were now living and working in New York. The subsequent couple of years visualize the expectant symbols demonstrated early in Hipolito's administration paving the way to political scandal along with the global recession. (History of the Dominican Republic) the country suffers from considerable income disparities; the poorest half of the population attaining less than one fifth of GNP while the richest 10% enjoys about 40% of national income. (Economy - overview)

The United Nations brought out an analytical report that represented from the year 2000 to 2003 the level of poverty enhanced from 54% to 62% and that the level of abysmal poverty went up from 29% to 33% both of which were considered to be awful to the country. The UN also analyzed the disparity of income in the country revealing out that the poorest 20% of the population could share the 5.1% of income whereas the richest 10% had 37.9% of the income. (General Situation in the Country Today) During the year 2003 the growth rate became negative at -0.4% as a result of effects of a major bank fraud and confined growth in the U.S. economy. (Background Note: Dominican Republic)

External elements like a growth in international oil prices and a decline during the post terrorist attacks in USA on 11th September, 2001, in international travel and tourism that is an elementary source of revenue in the country catering to the weakening of the Dominican economy. The most crucial factor however, was the degeneration of the third largest bank of the country the private Banco Intercontinental or BANINTER, or Intercontinental Bank, with the subsequent accusations of accounting malpractice, mismanagement and fraud plotted by the owners and management of the banks. The influence on the Dominican economy was disturbing. The degeneration expenses of the Dominican government a reported U.S.$2.2 billion, revealed to be equivalent to 66% of its annual budget or 11% of the annual Gross Domestic Product of the nation. Its effects incorporated enhancements in the annual inflation rate, from an estimated 8.9% in 2001 to 35% in late 2003, a general economic breakdown, with an indicated withdrawal of foreign investment; and a more than 50% depreciation of the Dominican peso in relation to the U.S. dollar. (Dominican Republic Human rights violations in the context of the economic crisis)

The Dominican Republic economy depicted worse times largely as a result of bank frauds discovered in 2003 in which losses aggregated to more than 20% of GDP. The GDP for 2004 is anticipated to be negative again of -1.25%. There existed the fiscal imbalances, addressing the enhancements in Central Bank Debt and extensive intermittent electricity blackouts. The decision of government to back 100% of deposits in 2003 in case of failed banks resulted in rising national debt three times, from about 18% of the GDP to more than 50%. Most of the new debt was at higher rate of interests for terms of a year or less. Capital flight was important in 2003; there existed some indication that the inception of a new government may contradict the trend. Enhanced oil prices and the fall of the peso exchange rate above 2003 aggravated the problems in the electricity sector. (Background Note: Dominican Republic)

Just seven months after the degeneration of Banco International, by January 2004, the peso exchange rate had declined to 50 to U.S. $1, down from 16 to U.S. $1 in 2002. The IMF or International Monetary Fund suspended their loans to the Dominican Republic that made the economic condition even worse. The suspension was due to the purchase of two private energy facilities by Hipolito that where once owned by the Dominican Republic and sold to private holders by Fernandez during his administration and expenditure on public programs they believed were applied solely to enhance reputation of Hipolito with the poor of the nation. Gradually, the loans were distributed but not prior to the depreciation of the exchange rate of Peso even further against U.S. dollar. (General Situation in the Country Today)

This government during the period 2000-2004 almost bankrupted the nation with rampant corruption and extremely irresponsible borrowing that doubled the external debt only in four years. This along with the fact that the globalization process is generating havoc with the Dominican economy illustration of which is that many of the free trade companies are relocating to China and other nations, and the persistent inflow of Haitian immigrants, has created an environment that where the immediate future of the country and the adjustments that are required is miserable. (General Situation in the Country Today) the citizens of the country in May 2004, anxious to return for prosperity and irrespective of having alleged his previous administration of corruption and fraud, elected Dr. Leonel Fernandez and his Dominican Liberation Party again. (History of the Dominican Republic)