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The Dominican Republic: Failure Of The Free Market

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BECED5EEM O he boat people of Haití are not the only people fleeing their homeland. The people of the Dominican Republic, Haití 's neighbor, are also desperate enough to risk their Uves and spend all their money to escape their impoverished country. Instead of heading west toward theU.S.however.Dominicanscrowdontosmall fishing boats that limp across the shark-infested Mona Passage eastward to Puerto Rico. But how long will it be before Dominicans, luce Haitians before them, begin arriving at our shores as well? The Dominican Republic, which shares the 29,000 square-mile island of Hispaniola with Haití, is in the midst of a severe political and economie crisis that has received little media attention in comparison to its neighbor. In the last five years, over a million more Dominicans - in a country of just seven million - have been pushed into poverty. The unfolding scenario on the island of Hispaniola suggests that before we get too giddy about the collapse of communism abroad, we should remember that capitalism - the free market - is faltering in our own backyard. The current political-economic crisis within the Dominican Republic can be directly linked to the free market economie policies imposedby the World Bank, the International Monetary Fund, and a series of U.S. administrations. These groups, through interconnected efforts, set out to implement a development program for the Dominican Republic based on U.S. private investment, aid, and loans. From 1 969 to 1 976, the nation did experience significant economie progress as a result of these policies and a boom in sugar prices. However, since 1981, severe drops in sugar and nickel prices have badly impaired the "Dominican miracle." In order to deal with the slumping economy and to insure a retum on loans and investment, the International Monetary Fund insisted that the ment institute an austerity program. In January 1983, the Dominican government began implementing these policies which included tax increases, wage cuts, as well as cuts in social services. State-run hotels and industries were closed as the IMF and the U.S. attempted to restructure the economy to concéntrate more on export production. Further, subsidies on food and fuel were removed. Large grants from the U.S. Agency for International Development (USABD) financed the building of an infrastructure for foreign investors. Several "free zones" were also established in which foreign-owned industries could opérate under I tax exemptions and nonunion conditions. Initially, high world sugar pnces and the influx of U.S. aid promoted rapid growth. However, IMF policies eventually benefited mainly the urban well-to-do and large export producers. Prices for essential items like bread, milk, cooking oil, sugar and medicines tripled and quadrupled. Meanwhile, the foreign exchange earned from sugar was spent mainly on imported consumer goods for the upper and middle classes. On April 23, 1983 protests broke out in the capital of Santo Domingo and to wns around the country. Pólice and soldiers shot into crowds, killing more than 100 persons and wounding hundreds more. More than 4,000 people were arrested. The government shut down two radio stations and atelevision station. Pólice occupied union headquarters to prevent further demonstrations. The government used similar tactics in January 1985 when new austerity measures drove food and fuel prices up another 50%. In 1984 over 2.9 million Dominicans lived belowthepoverty level.By 1 989 this figure had reached 4.2 million. In 1990 the country 's nomic plight worsened, with 100% inflation and 520,000 more people in poverty. Beyond Numbers I have been to the Dominican Republic on three separate occassions. Numbers cannot adequately convey the human tragedy I witnessed, f or example, at EN eneder o, an area in the capital of Santo Domingo. Women, men and children bury themselves daily in an ocean of rotten garbage, mud, flies, cockroaches, and maggots in search of objects-ilastics, metáis, cartons, bottles and other items - which they sell in surrounding areas for subsistence. Sometimes if they are "lucky," they will find some food - if the pigs don 't beat them to it. Nor can statistics convey the unbelievably poor quality of life for those crowded into cardboard shanty towns without basic services. In most of these "cities of misery" there is no potable water, electricity, or garbage collectioa Rural areas, historically neglected, remain without roads, running water, electricity, or schools. During my most recent visit this past summer, doctors, nurses, and teachers were on a three-month strike for higher wages. The country's Congress voted to increase the salaries of these state employees. However, President Balaguer declared their vote nuil and void, citing the budget constraints of International Monetary Fund (IMF) austerity measures. The result was thatthevastmajorityofDominicans weredenied adequate health care. The daily newspapers were fïlled with stories of individuáis dying because of inattention, or second class treatment by army doctors. Haitians in the Dominican Republic Far worse is the condition of Haitians living and working in the Dominican Republic. Haitians comprise over 90% of the 30,000 workers on Dominican sugar plantations. A range of books and articles have documented the terrible conditions of Haitian braceros working in the Dominican Republic, the world's fourth largest sugar producer (see "Peasants in Distress: Poverty in the Dominican Republic" by Lundias Vargas). Haitians, including children as young as eight years of age, are arbitrarily arrested near or at the border and taken to government-owned sugar plantations. Others are enticed by deceptive recruitment practices. Further, Haitians are forced to work twelve-hour days, seven days a week, with no gloves, no boots, and no glasses to protect them. At nights they are often padlocked into overcrowded barracks with no potable ter, no electricity, and no medical care, no latrines, and no cooking f acilities. They subsist on rice and sugar cane. For this they earn the equivalent of U.S. $3.50 a week. However, their pay is in the form of vouchers which can only be used at plantation stores. Close to 85% of Dominican sugar is bought by U.S. companies. Purchasers include RJR, Nabisco, M&MMars, Borden, Kraft General Foods, Wrigley Co. and Warner-Lambert These corporations continue to buy this sugar despite the fact that the Domincan government has violated every international agreement on the rights of children, refugees, migrant workers, and national minorities. Exquisite Democracy? In June 1991, Dominican Republic President Balaguer received a U.S. Congressional delegation that carne to evalúate USAID's Promoción del Desarollo y la Disminución de la Pobreza (Promotion of Development and Reduction of Poverty). The delegation concluded that the country is on a trajectory towards significantly diminishing poverty. They called the Dominican Republic one of the most "exquisite" democracies in the hemisphere. It was a whitewash. ín reality, foreign-imposed free market economie policies have protected the privilege and power of foreign and domestic elites, while creating an environment conducive to foreign investment and profitable returns. U.S.-imposed economie policies have also aeated an environment where modem day slavery flourishes, where security forces crash labor unions, and where poverty, hunger, and disease are widespread and growing. Democracy has had little chance to grow. Joaquín Balaguer, the right-hand man of former dictator Rafael Trujillo, is once again in power after a questionable 1990 electoral victory. So this is what free market economie policies have brought the people of the Dominican Republic and Haiti? Haitians, in search of jobs and relief from repression, are fleeing to the U.S. and the Dominican Republic. Dominicans, in search of jobs and relief from repression, are fleeing to Puerto Rico. Where will it all end? We really do not need to leave our shores to see the failures of free market economics. The writing is on the wall for those who care to look. Our infrastructure is deteriorating, social services are being cut, and schools are being closed as our economy falters. In African-American and Latino communin'es unemployment and infant mortality grow as life expectaney declines. Hunger, homelessness, and union busting are key features of American culture. Perhaps what we see in the Dominican Republic is our future. During this period of jubilation over the "death" of communism we ought to seriously reflect upon the failures of our own economie sysytem Andrew Williams is a gradúate student in the Department of Anthropology at the University of Michigan and board member of The Ella Baker-Nelson Mándela Center for Antiracist Education.


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