Dominican Republic and Haiti: Country Studies

Dominican Republic and Haiti: Country Studies
associated rehabilitation efforts is part of the IMF policy on
emergency assistance related to natural disasters.
In their request for IMF assistance, the Dominican Secretary
of State for Finance and the Governor of the Central Bank said
their country's adjustment policies would press ahead with a
structural reform agenda including trade liberalization, reduction
of inflation, pension reform, and legislation regarding tax
and tariff reform. Also included was the conclusion of freetrade
agreements with Central American and Caribbean countries.
The officials warned that the most significant effect on
the balance of payments would come from a surge in imports
related to the reconstruction effort, estimated at a total of
US$700 million through 1999. They promised not to introduce
or intensify existing trade restrictions for balance of payments
purposes. Instead, they would seek to defray construction costs
by such additional measures as cutting salaries of public-sector
employees by 5 to 10 percent, increasing selective consumption
taxes, and requesting extensions of payment periods from
bilateral creditors.
Foreign Assistance
The Inter-American Development Bank, the World Bank,
and the European Union are the major multilateral aid donors
to the Dominican Republic. In spite of its contentious relationship
with the island nation, the IMF also has been a significant
contributor. The EU has been involved only since 1990, when
the Dominican Republic acceded to the Lome Convention (see
Glossary), making it eligible for EU assistance. The first protocol
of 1990-95 allotted it RDS 1,256 million, and the second
protocol (1995-2000) increased its allocation to RD$ 1,565 million.
The United States and Japan are the largest bilateral donors.
Other important donors include Italy, Germany, and Canada.
The level of United States assistance, which dates back to the
early 1960s, has tended to fluctuate widely in response to economic
and political trends. It reached US$99.7 million in 1966,
one of the highest levels in the region, in the aftermath of the
United States occupation (see table 11, Appendix). Aid levels
dropped considerably in the 1970s, however, averaging only
US$18.13 million a year from 1970 through 1979. The United
States Agency for International Development (USAID) augmented
its program in the country during the 1980s until its
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