Recession of 2008 and impact on the DR

Caonabo

Majao, Majao
Sep 27, 2017
7,329
2,936
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It’s clearly evident wherever you look...
I hate going food shopping these days. It’s madness.

Went to take the dog for his vet appointment, the vet moved across the street because his old office is being turned into a building. He said he ran out of space as clients more than doubled in the past year.

Most business owners have halved their expenses under the new curfew and are profiting even more as more people have taken to crunch the shopping hours in their visits.

Food delivery has gone triple their load and newer clients are hard to accommodate in some instances.

I get my tipiles, kipes and other Lebanese foods from Tu Quipe at Los Jardines, they now open earlier and do twice as much business than before.

Most fragile businesses are the ones folding tent. It was just a matter of time for them. Pandemic or not, their business model was doomed from the start. The pandemic and curfews just hastened the timing of that demise.

The big losers in this pandemic have been the bars, clubs, centers of entertainment and frills type.

A whole new cadre of businesses savvy people are being formed during these trial times.
Adaptation is the new norm. They learn to evolve and adapt quickly.

The average business in the DR is debt-Free. They can close their doors and hibernate.
Others are quickly adopting the emergence of the internet and apps to their benefit, unlike before.

Local artists Newfound tools of trade online, have given credit to a new profit lane they’d never were interested in exploring before.

If you want to know if your economy is healthy, just look at your banks. If banks are reporting increases in profit, then your economy is chugging along as it should.

Dominican households carry very little to moderate debt compared to other similarly economies. Savings have increased, rather than decrease during these trial times.

My extended family has zero debt, and any car financing is done only to increase the credit line and keep it healthy. They can all pay off those financing loans with ease.

A foreigner friend asked me recently why I keep buying apartments in the 3 million range, only to keep them as rentals. I explained to him it’s the safest and most profitable way to earn a minimum yearly $300,000 NOI profit return on each. That’s a cap rate of 10% and more.

I furnish the units and have an overseas rental pitch. Rentals are 1, 2 and 3 years with rent increases after year 1. I include a biweekly full house cleaner, which I employ and acts as a home inspector as well (for me).

In practice I made things easier for tenants, it includes the Netflix, cable, internet, water and electric setup under my control. Tenants receive a copy of the bill electronically, which is charged to their rental account monthly. In some instances I also provide any number of cell lines and wifi dongles to the tenants on request.

All my units are now rented for 3 year contracts. A US based company which carries lots of work here, contracted all the units for their rotating staff. The add-ons are left to each staff to pay for it.

So far I had only one incident with a tenant. A fire caused by a bbq on the balcony left unattended. Minor damages but lots of smoke all over. Ever since bbqs on the units are forbidden.

All units have a rental insurance policy and a 24 hour emergency maintenance 👨‍🔧 guy on call. And no, I’d never rented to locals.

There are no more 3 million range units in nice areas to be had. Now they are selling new units for how much they will be worth in 5 years, not their true present value.

As far as I understand, my extended family and circle of friends are not reporting any loses from any of their businesses here in the DR.

Many have taken the opportunity to expand and remodel their businesses, during the shortened hours.

I often buy empanadas de yuca from an older guy at Rafael Vidal, just on the end corner close to Lumijor. He’s much busier now and tells me he sells more than before on the compacted hours. People just flock to him and buy extra unlike before. He was saying this as he told his calling clients there were no more as I bought all the last stock he had.

If you go to the shopping plazas, you’ll notice the void from all those Little planned businesses with weak to no business plans behind them.

The ones hurting are the conformists, the ones too happy to just make enough to go gone without much hassle. Including the informal vendors that just seat all day by their trinkets as they await buyers.

Now they need to hustle for their livelihoods.

The new practice of all home served deliveries is here to stay for good. This is something people are quickly adapting to in all levels.

Tax revenues increased in the DR this year. I see a healthy economy rebounding well into 2021.

Aside from your personal business economics (which only you can state and it would be very difficult for others to refute), the rest of this posting belongs in The Clown Bin.
There are too many ridiculous and implausible assertions stated here to take this posting seriously, and definitely not enough time to attempt to address each one in the short time I have to contribute today. Please tell us you were joking.
Let me start/end with one in this brief time...
We are to assume the RD economy is doing well right now because the emapanada de yuca guy on your corner has longer lines and sells out his product quicker than before?
Perhaps it is because people have limited options on where to eat, and others have no disposable income to spend elsewhere due to the Covid restrictions in place.
I never heard of a successful economy being based on the success of "street food" vendors.
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
12,999
660
113
Santiago de Los 30 Caballeros
Aside from your personal business economics (which only you can state and it would be very difficult for others to refute), the rest of this posting belongs in The Clown Bin.
There are too many ridiculous and implausible assertions stated here to take this posting seriously, and definitely not enough time to attempt to address each one in the short time I have to contribute today. Please tell us you were joking.
Let me start/end with one in this brief time...
We are to assume the RD economy is doing well right now because the emapanada de yuca guy on your corner has longer lines and sells out his product quicker than before?
Perhaps it is because people have limited options on where to eat, and others have no disposable income to spend elsewhere due to the Covid restrictions in place.
I never heard of a successful economy being based on the success of "street food" vendors.


I think you have me confused with somebody else? I drive an early 90s Camry, live in a rented apt in Las Dianas and don’t even wear a wristwatch, let alone jewelry! Hhhhhhhh

I’m the average Dominican citizen you often write about here.

As far as the economy? I think I know a thing or two about our economy...

But like I said here plenty a times:

The proof is in the pudding!
Yet to be wrong about it here.

So... When will the DR economy flop and belly up this time?

It’s funny that time and time again for over a decade, all of people’s negative projections have been proven wrong time after time, after time, after...
 

Caonabo

Majao, Majao
Sep 27, 2017
7,329
2,936
113
I think you have me confused with somebody else? I drive an early 90s Camry, live in a rented apt in Las Dianas and don’t even wear a wristwatch, let alone jewelry! Hhhhhhhh

I’m the average Dominican citizen you often write about here.

As far as the economy? I think I know a thing or two about our economy...

But like I said here plenty a times:

The proof is in the pudding!
Yet to be wrong about it here.

So... When will the DR economy flop and belly up this time?

It’s funny that time and time again for over a decade, all of people’s negative projections have been proven wrong time after time, after time, after...

Just more proof in the pudding that the whole entire world has gone bat sh*t crazy this year 2020.
I digress.
 
Jan 3, 2003
1,310
175
63
I have been saying this....
We have more residential & commercial construction going on in my area than I have ever seen

Most have adjusted their life to a shorter day..... and many businesses are thriving
Don't worry about the buildings going up. Worry about the destruction the peso wreaks on your dollars or other hard currencies. I don't buy the DR economic miracle story. But to each their own. If so, the millions of Haitians in the DR should be given their citizenship papers since the DR economy is booming during a pandemic.

They can build all the towers they like. It won't change the ecological and economic problems that are set in stone when you falsely overcollateralize to ensure the debt spigots keep churning out the money you need to keep the vig going. It's a giant Ponzi scheme of which the DR has been a beneficiary.

I'll take your claim as valid. The thousands of Dumb Dominicans abroad who amassed a certain amount of money but can't tell the difference between micro and macroeconomics are a driving force behind that construction. They'll invest a 100 grand to realize, probably never, that their dollar investment is worth half 20 years from now.
 

bob saunders

Platinum
Jan 1, 2002
28,785
2,293
113
dr1.com
Don't worry about the buildings going up. Worry about the destruction the peso wreaks on your dollars or other hard currencies. I don't buy the DR economic miracle story. But to each their own. If so, the millions of Haitians in the DR should be given their citizenship papers since the DR economy is booming during a pandemic.

They can build all the towers they like. It won't change the ecological and economic problems that are set in stone when you falsely overcollateralize to ensure the debt spigots keep churning out the money you need to keep the vig going. It's a giant Ponzi scheme of which the DR has been a beneficiary.

I'll take your claim as valid. The thousands of Dumb Dominicans abroad who amassed a certain amount of money but can't tell the difference between micro and macroeconomics are a driving force behind that construction. They'll invest a 100 grand to realize, probably never, that their dollar investment is worth half 20 years from now.
You are probably correct but in the here and now it is beneficial to the economy.
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
12,999
660
113
Santiago de Los 30 Caballeros
Onions

Funny thing is you have been at it for longer than a decade (to me is a bit loooong time already) hammering the coming of the end, and honestly, not there yet!

Not even after being on the receiving end of a biblical pandemic, has it fallen or grind into a halt.

Each time it rises ever stronger and more resilient.

We now have an administration willing to take the risks and breed potentially a new crop of leaders. It all starts from the roots and the first crops are going to be excellent!
 
Jan 3, 2003
1,310
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So far, as I see it, this administration has been Hands-on when it comes to the Haitian issue here.

The president clearly remarked that Haitians will only be allowed with the proper documents onhand. Meaning work permit or visa issued by Immigration alone.

This precludes illegals 100% and to the point.
Given how we digitized pretty much the whole database with who’s who in the DR, it won’t be much of a problem to carry it out.

He clearly stated that the situation had to change drastically, compared to the past and immediate present.

He has Trump and the US ambassador’s go ahead for this. At least until the end of the year, so we are bound to see fast action to that end in our border and interior.

I also believe he will move to remove the penalty fee for tourists and replace it with a special long term non-immigrant tourist visa.

Venezuelans will also see some relaxation on rules to stay and work legally in the DR, until the situation changes in Venezuela.
Every Haitian movement internally and externally should demand that they be given immediately their citizenship papers. If we take your anecdotal and baseless claims as valid of an economy growing, then the massive Haitian population within the DR specifically those born on Dominican soil are entitled to their citizenship.

The international community will not allow an alleged 1st world economy as you always parade here on DR1 to disenfranchise an entire group of people on the basis of spurious and ad hoc legal contrivances. If you are right and I'm wrong I await for the DR gov't to give permanent legal status to the millions of Haitians within the DR living in immigration limbo.

This will allow the millions of Haitians to also partake fully in the economic miracles taking place within the DR. You've mentioned how much faster the DR economy is growing above and beyond the US. Of course Elon Musk snubbed Abinader when the latter reached out to him to install facilities within the DR. Musk is not insane but that polemic aside, the international community is waiting and looking.
 
Jan 9, 2004
9,469
727
113
December coming...
December and the year have come and gone...................and the numbers so far are not very good.

That quasi-miracle you hoped for by December....................turned out be a mirage. Then again, hope is not and never has been a good economic plan.


The final tourist numbers for the year will be released on/about the 10th of January.


Respectfully,
Playacaribe2
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
12,999
660
113
Santiago de Los 30 Caballeros
December and the year have come and gone...................and the numbers so far are not very good.

That quasi-miracle you hoped for by December....................turned out be a mirage. Then again, hope is not and never has been a good economic plan.


The final tourist numbers for the year will be released on/about the 10th of January.


Respectfully,
Playacaribe2


On the contrary, figures are much better than any projections based on Covid-19 impact.
The DR economy is showing a higher rate of recovery than it was expected to under duress.

And will keep getting better and better!
 
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PICHARDO

One Dominican at a time, please!
May 15, 2003
12,999
660
113
Santiago de Los 30 Caballeros
On the contrary, figures are much better than any projections based on Covid-19 impact.
The DR economy is showing a higher rate of recovery than it was expected to under duress.

And will keep getting better and better!
 

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PICHARDO

One Dominican at a time, please!
May 15, 2003
12,999
660
113
Santiago de Los 30 Caballeros
IMF ensures monetary and fiscal policies have been effective in the Dominican Santo Domingo.


The Central Bank of the Dominican Republic (BCRD) held a virtual meeting with the mission of the International Monetary Fund (IMF), aimed at collecting economic and financial information from the country, in the framework of the annual consultations under article IV of its Articles of Agreement, which is the responsibility of all member countries of that financial organization.

The governor of the BCRD, Héctor Valdez Albizu, informed the IMF mission, headed by the head of mission, Esteban Vesperoni, about the measures that are contributing to a rapid economic reactivation of the country after the negative effects caused by the COVID-19 pandemic, among which he highlighted the liquidity expansion measures taken by the Monetary Board (JM), combined with the Government's social compensation measures.

Valdez Albizu stated that one of the first measures taken by the Monetary Board was to lower the monetary policy rate from 4.50% to 3%, which allowed the overnight rate to stand at 2.5%. It also approved liquidity facilities for banks through repos extended to one month, enabled for extension as financing up to one year, with the guarantee of Treasury securities, BCRD and category A portfolio; the liquidity facilities that were enabled for financing of RD$215 billion (about 5% of GDP), having placed on April 20 about 89,000 loans to different sectors.

He said that, after discussions with the IMF, the quota deposited in the same institution by the Dominican Republic, equivalent to US$ 653 million, which resources were used by the Ministry of Finance to implement programs that help the most vulnerable households and people.

The governor pointed out that due to the effects of monetary and fiscal measures there was a positive change of trend. Already in February, a growth of 1.1% was achieved in real terms and, according to the BCRD forecasting systems, the country is in a position to exceed 5.5%, which would be a great success.

Valdez Albizu also highlighted the behavior of remittances, which in the first quarter of this year reached US$ 2,548 million, thus registering a growth of 50% compared to the same quarter of 2020.

He also highlighted that a level of foreign direct investment of US$ 2,715 million is estimated in 2021, which would cover more than twice the level of current account deficit estimated for this year. He also mentioned that international reserve levels remain historically high, around US$ 12 billion, equivalent to a coverage of approximately 15% of GDP and about 7.5 months of imports.

The governor assured that one of the fundamental keys to the recovery of the Dominican Republic has been to transfer credibility and certainty, both nationally and internationally, so that investments and production are strengthened.

For his part, the head of the IMF mission, Esteban Vesperoni, considered that, after the outbreak of the pandemic, the monetary and fiscal policy response of the Dominican Republic has been effective and decisive in the levels of recovery that are being achieved.

Vesperoni said that "in the perception of the IMF, the reactivation achieved by the country would suggest that DR belongs to a privileged group of emerging economies, more than the average of Latin America (LA)."

The head of the IMF mission pointed out that DR entered the pandemic with strength, in addition to the strategies to facilitate liquidity, support for families, the effort to support the labor market and resources for refinancing.

Analysis carried out by the international organization reveals that recovery would be complex due to the different speeds of restoration in different countries. He expressed concern about the social impact, especially on poverty levels. He also indicated that one of the main challenges for Latin American economies will be to face the debt figures acquired during the pandemic.

Vesperoni concluded the meeting by stating that the International Monetary Fund is ready to begin new work aimed at consolidating the recovery and growth of the Dominican Republic in 2021 and 2022.

The head of the mission was accompanied by Frank Fuentes, alternate director of the Brazilian chair on behalf of the Dominican Republic; Mariana Sans, responsible for social affairs; Pamela Madrid, responsible for fiscal affairs; Dirk Grolleman, representative of the financial sector; Marina Rousset, representative of structural affairs; and Mario Mansilla, for monetary and external affairs.

Present with the governor were the lieutenant governor, Clarissa de la Rocha de Torres; the manager, Ervin Novas Bello; the deputy general manager, Frank Montaño; the deputy manager of Monetary, Exchange and Financial Policies, Joel Tejeda; the deputy manager of National Accounts and Economic Statistics, Ramón González; and the economic advisor of the Governorate, Julio Andújar Sckeker.

There were also the director of the department of Monetary Programming and Economic Studies, Joel González; the director of the Department of Regulation and Financial Stability, Máximo Rodríguez; the director of the International Department, Brenda Villanueva; and the director of the Treasury Department, Yamileh García Belén.

Source: https://m.elcaribe.com.do/destacado...s-han-sido-efectivas-en-republica-dominicana/
 
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franco1111

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May 29, 2013
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December and the year have come and gone...................and the numbers so far are not very good.

That quasi-miracle you hoped for by December....................turned out be a mirage. Then again, hope is not and never has been a good economic plan.


The final tourist numbers for the year will be released on/about the 10th of January.


Respectfully,
Playacaribe2
In the big picture of the economy, remember that only about 16 % of the economy is tourism. Many other sources for this number, some show more like 17%.

 

franco1111

Bronze
May 29, 2013
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Gringo
Hhhhhhhhh

Good try!
But no!

Economy is chugging along just fine and this is a worldwide effect.

All players got handed the same hands to play. DR is doing rather well with the hand we got.

Each day in and out supermarkets are FULL. Whatever business is open is doing better than half the economies around the world.

I just visited today at Juguetón to buy some presents for niece and nephews (as it happened today was the day from the past few weeks I saw a chance of it being less full of shoppers) and still was a line to even browse the shelves. A line to pay. A line to get them wrapped. It took me two hours for something that should had been less than 20 minutes any other time.

Tire shop couldn’t schedule me for a tire rotation and balancing until next week as best.

Armerías are stripped naked of stock.

Shipping containers are on a waiting list, because we are having more exports going out than imports coming in.

I went to shop for a new car and have to wait for the next month, because all the ones of that model got sold before they hit the showroom.

Go and see how much higher it’s now to book a hotel in Bávaro/Punta Cana, and how scarcely dates available turn up.

The only thing holding this economy back is the curfews and nothing.

Debt restructuring just saved millions of dollars on interest to the DR just days ago, with more of that to come.

I think we are doing phenomenal as it is and will do much better come the removal of curfews.
You actually make some very good points. And beyond the formal economy, about 50% of the Dominican economy is "informal." You understand the importance of the yucca vendor ;) Only about 50% of Dominicans have bank accounts.


 

franco1111

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May 29, 2013
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As for the immediate future, a recent statement from the World Bank includes the following. All who see and want to improve the economic circumstances of the DR know that education and healthcare are the primary keys for the future. And, the others now. The current administration is working on exactly those pieces.

"As the pandemic recedes, investment in human capital will be vital to the DR’s continued growth and development. The 2020 Human Capital Index estimates that a child born in the DR today will be only half as productive over her lifetime as she would have been had she received a complete education and proper healthcare. The DR has made great strides in expanding access to education and healthcare, but the uneven quality of these services remains a major obstacle to broad-based economic growth and human capital development. To restart employment-intensive, pro-poor growth and enhance its economic competitiveness, the DR must strengthen productive linkages between domestic and exporting firms, reduce the administrative costs of the bureaucracy, improve the reliability of the electricity supply, and expand access to credit. How swiftly and effectively the government embraces these reforms will largely determine the pandemic’s long-term impact on poverty, employment, and economic growth."

 

william webster

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Jan 16, 2009
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Unbanked people...

Imagine the USA... around 25-30% unbanked
THat's why I went into check cashing in PHL

 

USA DOC

Bronze
Feb 20, 2016
2,365
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You actually make some very good points. And beyond the formal economy, about 50% of the Dominican economy is "informal." You understand the importance of the yucca vendor ;) Only about 50% of Dominicans have bank accounts.


You are right... without the informal Economy.. and the side door economy,, would be a different picture here.........