Dominican Republic and Haiti: Country Studies

Dominican Republic and Haiti: Country Studies
Hurricane Georges. However, in September 1998, the Dominican
government and a consortium of three British and United
States firms signed an agreement to construct three 100-megawatt
combined-cycle generators. The generators, to be built by
Germany's Siemens and financed by the World Bank and the
Inter-American Development Bank (IDB), are to come on
stream in early 2000.
The sugar parastatal corporation known as the State Sugar
Council (Consejo Estatal del Azucar—CEA) is to follow a different
path from that of the electricity company. The Commission
for the Reform of Public Enterprise announced in July
1998 that it had decided against partial privatization. Instead it
recommended the introduction of private participation
through long-term leases. An investment bank is to advise on
the process, which is to be implemented in 1999. A group of
milling, paints, oils, and insurance enterprises is also on the
privatization list. Other economic reforms contemplated by the
government include the liberalization of business legislation,
aid for small enterprises, and the promotion of investment in
tourism, telecommunications, mining, and the free zones. A
new foreign investment law promulgated in September 1997
allows non-Dominican concerns to invest in all sectors, with the
exception of those related to national security. It also provides
for full repatriation of capital and profits. An older foreign
investment law (August 1996) also encourages manufacturing
in the tax-free zones by exempting foreign investors from
import duty on inputs and by simplifying registration procedures
and offering tax exemption for up to twenty years.
Fiscal Policy
Another significant reform under consideration by the
Dominican Congress in the late 1990s was that of imposing
restrictions on the executive's discretionary use of public
finances. Meanwhile, a role would be established for the private
sector in providing for social security and strengthening
the Central Bank's autonomy and supervision of all banking
procedures. Overseeing the country's financial system has
always been the function of the Monetary Board of the BCRD.
The BCRD controls the money supply, allocates credit and foreign
exchange, seeks to restrain inflation, manages the
national debt, and performs currency-typical central bank
functions.
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