Govenrment and Business Environment Case Study

Dominican Republic: Leonel Fernandez’s Turnaround Efforts

OR

Abstract:
During the reign of Leonel Fernandez as the President of the Dominican Republic from 1996-2000, the Dominican economy had an impressive growth at the rate of 7%. But, the terrorist attack on September 11th 2001, and the subsequent slow down of the US economy, had a negative impact on the Dominican economy. Added to this, a banking crisis in 2003 further pushed the country into economic distress. In 2004, Leonel Fernandez was elected the new President of the Dominican Republic, amidst expectations that he would revive the Dominican economy. But, he faced grave economic challenges. The country's foreign debt stood at $7 billion, the inflation rate was 43%, and the Dominican currency, the peso, had depreciated to more than half its value against the dollar since 2000. There was an unsustainable energy crisis, the tourism industry was struggling and exports had plummeted. Added to this, his party has had minority representation in the Senate and the Chamber of Deputies.

Pedagogical Objectives:

• To discuss the turnaround efforts, which were crucial for the future of the country as well as for the political career of Leonel Fernandez.

Keywords : Economic Crisis Case Study, Dominican Republic, Caribbean island, Economic crises, Economic restructuring, Fiscal policy, Monetary policy, Tourism, Free trade zones, Debt restructuring, Exchange rate, Leonel Fernandez, International Monetary Fund (IMF), Free Trade Agreement, CARICOM (Caribbean community and Common Market)