BBC Caribbean
14 May, 2004

Economic woes decide DR vote

With frustration at high unemployment, rising inflation and a sliding currency, voters in the Dominican Republic seem set to punish President Hipolito Mejia and his Dominican Revolutionary Party in Sunday's elections.

Opinion polls show that with 27 percent support, President Mejia is trailing by more than 25 points behind former president Leonel Fernandez and his Dominican Liberation Party.

Mr Fernandez, who left office in 2000 amid a corruption scandal, is benefiting from discontent over the economic troubles.

During his tenure, the country's economy grew by eight percent a year and the peso traded at the rate of 16 to the dollar.

But after four years of Mr Mejia’s rule, inflation is at ten percent a year, debt is almost 60% of GDP and the peso is trading at 45 to the dollar.

Dominican journalist Esperanza Sanchez who works for the BBC Latin American Service told BBC Caribbean Service that the situation in her homeland is desperate.

"People were feeling very nervous about going to the supermarket because they don't know what to expect," she said. "I had people telling me that they were very concerned about using as much onions as they're used to because it's so expensive.

"We're not just talking about imported goods - of course, its imported goods that have gone up the most - but we are talking about items that people use everyday basis like onions and peppers, people are really having a hard time."

Sanchez said shops do not display prices on their shelves, because they constantly fluctuate as a result of the high inflation rate.

"In some places you'd go and ask for some potatoes and chicken, and you think because you saw some prices displayed, you could counting on paying a certain amount but when the bill comes, they would tell you, 'the prices have nothing to do with the actual cost of the items because we have to adjust them on an everyday basis as things are going up almost daily, we just can't keep up with it'."

Most experts agree that Mr Mejia cannot be totally blamed for the collapse of the Dominican Republic's economy, as some analysts point to factors such as the September 11, 2001 attacks on the United States that depressed tourism, a mainstay of the Dominican economy, and soaring oil prices.

But Mr Mejia's government mishandled the collapse of the country's third-largest bank in 2003 in which more than $2 billion of public funds was used to compensate the bank's investors.

Mr Fernandez has promised to revitalise the economy by revisiting the tight monetary policies he employed during the late 1990s. He has said he will cut public spending and renegotiate the $7.6 billion foreign debt.