* By Cecilia Rivera
The Dominican Republic has always faced great challenges in managing its diplomatic relations with the United States. However, in recent years these challenges have increased considerably, both due to changes in various aspects of the world and to the internal political processes of each country.
It is known that a large part of the political agenda between the two nations is dictated from Washington and focuses on immigration and security issues, mainly focused on the fight against drugs that transit the island and that in recent years has increased considerably. .
In addition, the Dominican Republic has the United States as its main investor and first commercial partner, since it absorbs about 50% of Dominican foreign trade through the DR-CAFTA Free Trade Agreement.
While in the United States, the largest community of Dominicans abroad is concentrated, making it the largest remittance issuer that the Dominican economy receives annually. More than 75% of remittances come from the United States.
This behavior shows the positive effects of the dynamism that was registered in the United States economy in recent years. However, the coronavirus crisis has already begun to seriously impact remittances. Dominicans whose economy depends largely on the money their relatives send from the United States have already begun to feel the impact in reducing the money they receive.
It should be remembered that, through family remittances and investments in the Dominican Republic, migrants became an important contribution to the Dominican economy from the late 1980s to date.
According to data published last month by the Central Bank (BC), the Dominican Republic received US $ 1,703.2 million of remittances during the first quarter of this 2020, about US $ 40 million less compared to the same period in 2019, when they entered around US $ 1,743.2 millions.
According to the most recent report of the World Bank (WB), the flow of the so-called “migradollars” will have a fall of 20% worldwide and 19.3% only in the Latin American region.
The fall, which the World Bank described as “the most abrupt in recent history”, is registered due to the “collapse of wages and employment of migrant workers, who are often more vulnerable to loss of jobs and wages during the economic crises of the countries that host them ”.
Despite the fact that the international organization indicated that remittance income could have a global increase of 5.6% as of 2021, until it reached US $ 470,000 million, he clarified that the outlook remains uncertain. “In the past, remittances have been countercyclical: workers sent more money to their homes when their countries of origin experienced crisis and hardship. This time (…) the pandemic has affected all countries, which generates additional uncertainties, “stressed the World Bank.
At the beginning of the month, the North American labor market registered a rebound and the percentage of unemployed instead of increasing fell from 14.7 in April to 13.3 in May. According to these data, a total of 2.5 million additional jobs were created, ending the process of job destruction that between March and April left more than 21 million people on the street.
However, it should not be forgotten that the United States continues to be the country with the highest number of confirmed infections and deaths from COVID-19 in the world, so that its prospects for exiting the pandemic still look distant.
President Donald Trump, who has always said the economy was going to recover quickly, celebrated the figures on Twitter and has credited himself for the improvement. But economists consider it likely that by the end of 2020 unemployment will still be around 10%, a high figure comparable to the peak reached after the 2008-2009 financial crisis.
The situation in the United States does not look encouraging, so the Dominican Republic will suffer the ravages of the economic situation experienced by its main trading partner. Of particular importance is the commitment of the PRM presidential candidate, Luis Abinader, to urgently work on a reengineering of the Government to control spending, rationalize public spending and ensure that possible development benefits the majority of Dominicans and not only the political and economic elite linked to power, a situation that has been registered during the governments of Danilo Medina and Leonel Fernández.
— El Día to eldia.com.do