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Economic Growth of the Dominican Republic

2303 words (9 pages) Essay in Economics

08/02/20 Economics Reference this

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   A. Concluding Statement

 

Economic growth can be defined as an increase in goods and services produced for the population over time. It is one of the most important key factors in a well running economy. Why? Because it creates profit for all the businesses available around the world, with the businesses making money, they can hire people and give jobs and to invest in other companies. When people master the art of finding that one thing people want and keep coming back, it becomes a continuous cycle. Economic growth is important to any population to measure how far they are getting and if they are not going in the right direction. There are many things that could cause the economy to crash such as inflation, environment costs, and a decline in living standards.  By keeping up with the GDP is how they avoid any problems.

 Amadeo said the way gross domestic product can defined is “the best way to measure a country’s economy. GDP is the total value of everything produced by all the people and companies in the country. It doesn’t matter if they are citizens or foreign-owned companies. If they are located within the country’s boundaries, the government counts their production as GDP.” GDP helps us know if we are headed for a recession or if inflation is arising. It is usually measured within a time period such as yearly. It’s how we keep afloat in my opinion because if we didn’t have something that can tell us if we are doing bad or good we would be clueless.

Growth domestic product is related to economic growth because it is the best way to measure economic growth. “It takes into account the country’s entire economic output.” It includes all goods and services that businesses in a country provide. Also, through the GDP, we could recognize how the economy changes, at what percent economic growth grows or falls and the progress of other nations.

 With countries as successful and stable as the United States, there are certain companies that give America stabilization such as Apple Inc., Wal-Mart, and Amazon. These companies in America have given the United States a strong hand in their economic health. Nowadays, there is not one country that does not know what an iPhone is or a Macintosh computer. Wal-Mart is also another company that gives American what they want and when they need it. Wal-Mart’s 24-hour business strategy has put a standard on the competition around them and has forced smaller or big companies to compete with 24-hour service. Because of this now companies in America have to work two and three times as hard and as a result America’s GDP cycle runs smoother and creates great economic health.

 Some of the things the Dominican Republic was known for exporting were sugar, coffee, and tobacco.  But as time as progressed they saw a market for tourism and excelled at providing a vocational spot for people all around the world. Other ways they found to make money were construction and free trade zones.  As found on The World Fact book “The mining sector has also played a greater role in the export market since late 2012 with the commencement of the extraction phase of the Pueblo Viejo Gold and Silver mine, one of the largest gold mines in the world.” And also “The central America-Dominican Republic Free Trade Arrangement came into force March 2007, boosting investment and manufacturing exports.” From the last recession they had in 2010-2016, they are doing pretty well for themselves also known as the “fastest growing economies in Latin America.”

 The Gross Domestic Product in the Dominican Republic was as stated in article Trading Economics, was worth 75.93 US dollars in 2017. They had a record low of 0.65 in USD billion in 1961. Throughout the years in the 2000’s they continued to grow even after the bad recession they had. They didn’t decline since the recession, which is a good sign that they are on the right track.

The Dominican Republic has had their economic downfalls just like any other country but research shows their economy will only continue to get better. Some factors that help this happen are their agriculture, industry and services. Their agriculture helps them export their natural resources such as sugar cane, cocoa, tobacco, silver, and gold. Their services are the most popular known. Their services mainly consist of tourism. Tourism has really helped not only the Dominican Republic but also a lot of other countries because of what they have to offer the people visiting. If the hotels, activities, and food have excellent service more people will tell other people about the service. In this time of age social media also helps countries strive because of what they post, if the scenery is nice more people are going to say to themselves “I want to go there.” Everyone loves to visit the Dominican Republic and its beaches as well. The demand for all of these is so high that it has helped out this country and will help their economic growth stay strong.

 . The Dominican Republic has numerous amounts of problems that affect their economic. Those problems are education, poverty, population, negligence, natural disasters, and unemployment.

The lack of education the Dominican Republic has, has cost so many young kids the opportunity to learn. They do not have enough resources to give to the kids. Having a classroom is a prime example. A lot of the times, they have so many kids that it gets over crowded. Having over crowded classrooms does not let them get one on one time with each of the children. They don’t have the leisure to have one on one time if they do not understand a difficult topic. A lot of the time the curriculum is outdated and not current with the problems we have going on today. Another problem is how little the teachers are paid and how some are not even well studied for the material to teach.

 The Dominican Republic has not had a lot of the resources to help the citizens grow as a country and or for its citizens as well. In a general sense, poverty has lead people to commit bad decisions and harm those around them. Those bad acts can be anywhere from stealing, which will hurt the country’s environment and local businesses, violence (the dispute between Haiti), which will cause an unsafe and dangerous living standard for people to grow and expand as a community and a individual, and lastly loitering, which doesn’t seem to be a bad act at first, but cause the community to be outside and not do anything productive with their lives which then leads the country’s economic health to not cycle properly and keep businesses and lives moving. A major factor in what causes poverty, which then causes the economic health to suffer, is the countries population. The population of the Dominican Republic has been increasing in the past years. It has risen by two million since the year 2000 and is now currently at a 10.6 million. That is the population of people whom are properly documented in the country. There are improperly documented citizens in the country which causes free loading off of the scarce resources the Dominican Republic has and only gives less to the people who rightfully deserve it. Just as with anything that goes uncared for will eventually stop working or not come in benefit when not is use. I have brought this up because of the neglectful behavior the government has given toward the agricultural side of the country, which affect the country’s economic health in many ways that one cannot ignore. As stated before since the government has ignored the agricultural aspect of the country it will put its citizens out of work because of the less demand it will be asked to work on those farms. Not only has the farms been ignored, commercialism has taken over those farms with building resorts and attractions over them for tourist to enjoy. Yes, it can be debated weather the money of the resorts counter the production of the farm, but agriculture is needed to feed the mouths of the people (including those in the resorts) and put those without jobs to work. Of course, just as with anything sometimes production or productivity has setbacks just like we have natural disasters affect our community, which then affects our employment, economic health, and hope. The Dominican Republic has faced many natural disasters such as droughts, extreme rainfall and flooding. These major setbacks cause a lot of disbelief and harm to the country’s economic health.

Although there are many reasons why the Dominican Republic’s economic growth will stay strong, some issues remain unsolved. Two of the major issues that still remain are the lack of education being received and unemployment. Since there is such a high demand for their natural resources, the Dominican Republic should organize and plan better to expand this industry. They can make more jobs by employing them in agriculture so that there is more sugar, cocoa and tobacco to export. With all the money being received for these resources, they should plan to spend it appropriately in their school systems and to possibly bring in educators from outside the country.

 There are many ways to develop a well growing economic.  As it was mentioned in the Forbes article a great way to develop a growing economic is innovation. Having too much of something doesn’t create a good economic because everyone is used to it. There is no uniqueness or creativeness. Its important to make sure that there is always something new coming out. So there is room to make for innovation.

Now to get another perspective on the situation I will now put focus on how economists see what will be the outcome of the Dominican Republic economic health. According to Focus Economics, the Dominican Republic’s government is solely depending on the tourism and revenue from the resorts they are building for tourists to stay. Going back to the government neglecting the farms of the country, their counter goal is to build factories and industrialize the country to reach the maximum potential of economic growth. They have also claimed for that the “GDP growth of 4.9% in 2019, down 0.1 percentage points from last month’s forecast. For 2020, panelists see the economy expanding 4.5%”. In this light, this is good news for the country’s economic health. Also, other economic trends have boosted and lifted the economy health such as “manufacturing (9.9%), construction (9.8%), commerce (8.5%), transportation (8.2%) and tourism (7.9%)”. Just for reassurance, according to The Canadian Trade Commissioner Service they have also claimed that the Dominican Republic has had a healthy last 5 years with sustaining a 4.6 GDP in 2017.

 Maintaining a country’s economic health is definitely of importance and as for how the Dominican Republic will achieve that is by keeping what they have going on now and expanding it. In the event one does not know what the Dominican Republic do to maintain economic health, the Dominican Republic has a large exportation of ferronickel, sugar, gold, silver, coffee, cocoa, tobacco, and meats. With having strong exportation field there will definitely be a solid income for the country to rely on. But believe it or not the strongest aspect of the Dominican Republic is none other than the agricultural occupations and roles tourism and resorts. This leads into a small dilemma because of the country’s history and background. Yes, we have proof of the country successfully growing their economy by building resorts and industrializing a lot of the rural areas, but in a different light we are destroying history of how the Dominican farmers have raised and provided healthy and organic crops and food for their people. Of course, population takes a huge toll on what makes more sense to have. But the price will be the quality and cultural ways how the foods and crops

WORKS CITED

  • Amadeo, Kimberly. “Gross Domestic Product: Understanding What a Country Produces.” The Balance Small Business, The Balance, www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-3306038.
  • FocusEconomics. “Dominican Republic Economy – GDP, Inflation, CPI and Interest Rate.” FocusEconomics | Economic Forecasts from the World’s Leading Economists, FocusEconomics, www.focus-economics.com/countries/dominican-republic.
  • Shapiro, Gary. “Six Ways to Create Economic Growth.” Forbes, Forbes Magazine, 24 Jan. 2013, www.forbes.com/sites/garyshapiro/2013/01/23/six-ways-to-create-economic-growth/#550165377e32.
  • Global Affairs Canada, et al. “Dominican Republic Economic Report 2018.” Government of Canada, Global Affairs Canada, Deputy Minister of International Trade, International Business Development, Investment and Innovation, Canadian Trade Commissioner Service, 4 July 2018, www.tradecommissioner.gc.ca/dominican-republic-republique-dominicaine/market-facts-faits-sur-le-marche/0001545.aspx?lang=eng.
    “The World Factbook: Dominican Republic.” Central Intelligence Agency, Central Intelligence Agency, 1 Feb. 2018, www.cia.gov/library/publications/the-world-factbook/geos/dr.html.
  • Overview.” World Bank, www.worldbank.org/en/country/dominicanrepublic/overview
  • “The Economy in the Dominican Republic.” International Living, internationalliving.com/countries/dominican-republic/the-economy-in-the-dominican-republic/.
  • “The Top Causes of Poverty in the Dominican Republic.” The Borgen Project, 19 Mar. 2018, borgenproject.org/causes-of-poverty-in-the-dominican-republic/.
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