Economy is Election Issue

DOMINICAN REPUBLIC

By , Staff writer of The Christian Science Monitor

THE performance of the economy is a main issue in the 1990 presidential election in the Caribbeam island nation of the Dominican Republic. The candidates, current President Joaquin Balaguer and ex-president Juan Bosch, both over 80 years old, previously opposed each other for the post in 1961. The present policies of the Dominican government have been ``very much in favor of developing the economy, and an example of this is the number of free trade zones in the country,'' says Alex Vallecillo. As manager of the Washington-based Caribbean Basin Development Corporation, Mr. Vallecillo has been ferrying investments to the Dominican Republic since 1984. ``Mr. Balaguer is interested in creating jobs in the private sector,'' he says, ``but more encouragement should be given to capital investments.''

Mr. Bosch charges that the government's economic policy has foregone infrastructure and the productive sector, while pouring enormous investments into monuments celebrating the regime. Bosch points to the lighthouse under construction which is to commemorate the 500th anniversary of Christopher Columbus's discovery of America.

But a trade specialist at the Overseas Development Council, Stuart Tucker, says that ``the Dominican Republic must be applauded for having some of the best internal policies. The country has dramatically increased its non-traditional exports - textiles and apparel - products that are not given duty-free status under CBI [Caribbean Basin Initiative].''

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The country's internal policies have capitalized on the relatively low wage rates, which are more competitive than those in the Far East. Investors are more prone to open mills in the Caribbean than they are in Hong Kong and Taiwan, where wages have risen.

``The question remains whether these policies are sustainable over the long term,'' Mr. Tucker says.

Would the man who President Johnson feared would transform the Dominican Republic into ``another Cuba'' allow free-market reforms to take place? Bosch says he is ``categorical'' on this issue. ``The state is elected to govern, not to do business.'' Under his leadership, he says, the door would be wide open for foreign investment in the country's technological production and in its electronics industry.

Alex Vallecillo says that Bosch's talk of foreign investment in the Dominican Republic is a constructive sign. ``He has a history of being anti-foreign investment, and anti-private sector development, so I welcome a change in Mr. Bosch's approach.''

There are a host of other obstacles to foreign investment that have more to do with logistics than with politics.

Vallecillo stresses that ``a nationalist spirit in the Dominican Republic still inhibits development...''

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