Thursday, May 6, 2010

In Between the US and Venezuela

Politics in the Dominican Republic are just as complicated as in the US, perhaps even more so as a non-superpower; an island somewhere between major drug producers and major drug consumers; with a history of corruption and bribery as a way of making a political office into a profitable business; and great efforts to change as much of this as possible (except for the "island" part).

Someone recently asked me what the economy of Arizona was based on - what were our resources. I thought about the irony then answered, "It's a dry Dominican Republic: tourism, agriculture and technology." (The DR has been growing as a Caribbean Silicon Valley, attracting techies and companies from US and Europe.) We could probably add major Call Centers to both Arizona and DR as well.

While historically Americans have only been 15% of visitors, in the past month they were 60% (maybe a good sign that our own economy is improving!) DR depends on the US for Aid as well as a good part of its economy in the form of both imports and exports. Money from Dominicans living in the States (mostly New York City and Miami, it seems) provides an infusion of cash into the island (which has decreased greatly in the last few years and dramatically affected the lives of the poor here).

The economy of the Dominican Republic has maintained positive growth, while much of the rest of the world has had losses. But like the recent growth in the US stock market, the DR's economic growth has not yet translated to income for tourist industry workers who lost jobs in the worldwide downturn. Still, the word "depends" on the United States is not correct. The economy is diversified, as well as the regions that tourists come from.
As we have already learned, traffic congestion (specifically here in Santo Domingo, not throughout the island) is comparable to Manila - so fuel consumption is just about the highest in Latin America. Since we are not even providing our own oil for our own needs, then we obviously are not providing oil to the Dominican Republic. SO, they are getting it from our Venezuelan nemesis, Hugo Chavez. It is interesting to see how carefully and successfully President Leonel Fernandez finds that balance - keeping friendships with both countries. And how different the Venezuelan President seems when he visits here - smiling, laughing, friendly, happy.

But of course he is happy. He was here in DR today to sign an agreement to take over 49% of the DR government owned oil refineries here. He then hopes to help DR provide gasoline to the rest of the Caribbean. The US should take note for many reasons.

• His persona makes him appear like a great guy.
• Venezuela is providing something the DR is highly dependent on (like us): oil.
• Venezuela is providing a way for the DR to become a major exporter in gasoline, and therefore income.
• He will one day try to put a wedge between the DR and the US. He will have great power and own 49% of a government company and resource.
• Venezuela has taken what is not theirs before.

Need I say more...

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