The Week in Europe

By David Jessop

 

No recent President or president-elect from the Hispanic Caribbean has ever visited the United Kingdom. That is until the week past. Then Leonel Fernandez, the leader of the Dominican Republic’s Partido de la Liberación Dominicana (PLD) and the winner by a landslide of his nation’s recent presidential election, travelled to London and Oxford.

 

His visit, which went largely unreported, was indicative of a new approach he intends to take to the Dominican Republic’s international relations. It is one that recognises the importance of building confidence, making new connections and creating in advance of taking office next month, a positive awareness of his and his party objectives.

 

During his visit, the president-elect and an unusually small and targeted group of accompanying businessmen, took time to understand better how London’s influential capital markets might help reconstruct the Dominican Republic’s now highly indebted economy and its uncertain public utilities.

 

He spent time with the large banks, at the London Stock Exchange and in meetings with some of Britain’s leading companies invested in the Dominican Republic. He spoke informally over dinner with a cabinet minister close to Britain’s Prime Minister and with others able to help him re-position his country. He also spent time talking about his economic and social objectives making clear his belief that with the support of others in the US, Spain, Brazil and elsewhere he could turn his nation around. As befits a President who is also an academic he also pursued ideas of educational exchange.

 

He said nothing to criticise the outgoing Dominican administration. Rather he spoke about what he described as the non-structural economic problems he would have to resolve rapidly to keep faith with the high expectations of the electorate.

 

The Dominican Republic had to resolve rapidly three difficult but, in his view, transient problems: its foreign debt burden, a quasi-fiscal deficit and problems with electricity distribution. The solution, he said, would involve debt rescheduling on a voluntary and market-friendly basis, the need for better discipline for the collection of revenues from power generation and finding ways to attract private capital back into this sector. He said he was considering a number of options for resolving the quasi-fiscal deficit. These might include the sale of state held assets and the exchange of short-term notes for longer dollar-denominated debt.

 

The President elect indicated that he was committed to the process of trade liberalisation and globalisation and intended to introduce reforms that encourage the Republic’s export-oriented and import-competitive sectors. He would be fostering further trade ties with Florida, with which the Dominican Republic has become a major trade partner. He noted that his Government would be placing substantial emphasis on encouraging inward investment from the Gulf States and in particular from Dubai.

 

These relationships as well as the recently negotiated free trade areas with the United States and the Central American Common Market offered, he said, external investors new opportunities to access the US market. Spain, the President elect said, already recognised this. To enhance the relationship with the United Kingdom, he said he intended setting up an investment promotion office and making more active his Embassy there and its tourism promotional activities. It was his intention to continue to open the Dominican economy in a manner that was capital intensive and driven by the service sector. He also saw possibilities for agriculture and the development of the sugar industry with Brazilian support in areas such as bio-ethanol.


In an important change of emphasis from his predecessor he made clear that he intended re-engaging with the English speaking Caribbean.

 

Announcing what may become a regional policy initiative, president-elect Fernandez said that the Caribbean was not doing well. Its approach was too fragmented. However the region had in his view the capacity to increase its levels of production. The creation of a regional development strategy, he felt, could make the difference for all Caribbean countries. There was the need for a better relationship between leaders. To this end he was thinking of hosting an annual forum in the Dominican Republic for Governments, business and academics to consider how best to move forward as a region. He said he envisaged the Dominican Republic developing a leadership role in the Caribbean and Central America that might involve Venezuela and Colombia as well.

 

This is all welcome and is indicative that one of the Caribbean’s largest economies sees itself again as a regional and international player rather than a nation that would be happier in some form of integration with the United States. However, President Fernandez’s administration will have to spend considerable time renewing trust in much of the Anglophone Caribbean. It is scarcely a secret that there continue to be grave suspicions in parts of the region about the Dominican Republic’s intentions in international trade negotiations such as those for an Economic Partnership Agreement with Europe, especially in respect of sugar and other agricultural commodities.

 

Having said this, the relationship that has emerged over the past ten years between the business communities in Trinidad and the Dominican Republic suggest that viable long-term ties can be constructed not least through trade and investment. The rapid development of a market for Trinidad in manufactured goods and energy suggest that a vibrant Dominican market could act as a new driver for some aspects of inter-regional trade. Interrelationships might be further improved if a regional stock exchange existed, able to trade shares in both Dominican Republic and Caricom companies.

 

Bridging the Caribbean’s cultural and language divide will takes time, but if it can be achieved it will be under this new Dominican Republic government. Listening to the President elect speak it is striking that he shares a similar social vision to that of many leaders in the Anglophone Caribbean. He speaks genuinely and without posturing about the need for education, greater social equity and constitutional reform. He places emphasis on an improved relationship with the region, Haiti, Spain, France, the United Kingdom and Brazil. President Fernandez and his views deserve to be better known throughout the region.

 

David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]

July 9th, 2004


        
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