Dominican Republic and Haiti: Country Studies

Dominican Republic: The Economy
growth dropped back to 10.1 percent in 1993, 6.6 percent in
1994, and 5.7 percent in 1995 before jumping to 13 percent in
1996 and 17.1 percent in 1997, accounting for 10 percent of
GDP in contrast to nearly 9 percent of GDP in 1987. The
upswing resulted mainly from a sharp increase in spending on
public works (about 3 percent of GDP), road construction, and
large investments in the energy sector. In 1998 construction
growth slowed from 10.9 percent in the first quarter to 6.2 percent
for the first half as a whole. The boom in private construction
during the third quarter of 1998 slowed as a result of a
decrease in private investment and because of the high interest
rates set in 1997 to support the peso. The drop is reflected in a
26.6 percent decrease in new construction permits.
Energy
An oil-importing country, the Dominican Republic has been
impeded in its development efforts by the cost and scarcity of
energy, especially when its import bill for petroleum multiplied
tenfold in absolute terms during the 1970s. Although oil prices
eased during the 1980s, the island faced a new energy crisis as a
result of a critical shortage of electrical-generating capacity.
Inadequate supplies of electricity resulted by the late 1980s in
frequent power outages, frustrated consumers, and disrupted
production activities.
The country's aggregate consumption of energy is low, even
by Latin American standards. However, the Dominican Republic's
narrow domestic energy resource base satisfies barely half
the nation's energy demand, and the country continues to
depend on imported crude oil and related petroleum products.
The potential supply of hydropower, the most promising
resource, is estimated at 1,800 megawatts (MW), but less than a
quarter of that amount was being tapped in the late 1990s.
Wood and charcoal use is constrained by the small size of the
country's remaining forests. Biomass, mostly bagasse from sugarcane
residue, is getting more use but has limited potential as
a fuel.
The country's energy problems continued well into the
1990s. The electricity-generating operations of the Dominican
Electricity Corporation (Corporacion Dominicana de Electricidad—CDE)
were severely deficient during most of the period
from 1990 to 1996. Production fell to about one-half of peak
demand in 1990 and 1991. By mid-1996, output was below 800
MW, compared with a peak demand of 1,200 MW. The prob-
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