Rising Cost of Living

[Skippy1]

DRob,

Where would you put the economy of DR in the global sphere?
Would it... could it actually influence markets other than the price of Platano or bananas for example.

If the socical econonmic spread was different ie higher percentage of Middle to Higher social groups how would that effect the economics of the island and to bring it back on message the rising prices of food.
Surely the lack of quantity is the problem here. The pond is just too small.

Skippy1

 

[cobraboy]

Good points, CB. Here's a few items:

1) A "rising tide of resources" in a highly stratified (from a socioeconomic viewpoint) third world country is illusory at best. The tide's been rising, but the rats are drowning, anyway (how's that for mixing metaphors)? :glasses:

2) Let's try the reverse. If the population were doubled, how many more problems would exist? Proportionately speaking, relatively few. See, in my view, it's not about how many people are in the country so much as what access they have to the tools to enable themselves to build their own boats (to take full advantage of that rising tide you mentioned).

I'm not sure how you define resources in purely economic terms. My preposition was resources rise at a rate greater than the population would.

If the population doubled, and the resources remained the same or grew at a level lower than the population growth, I think you'd see a significant increase in probelms in the DR, especially crime.

The problem isn't the "rich". The problem is that much of the population of the DR has little interest in increasing their ~personal~ ecomomic resource: their knowledge and edumacation. Until the "want to" is there for edumacation, the average poor shmoe in the barrio isn't going to see his life change for the better, regardless of the overall increase in resources. Edumacation has always been a classic economic "multiplier".

 

[Lambada]

Looks like DR Govenment intends using subsidies to combat higher food prices:
http://www.elcaribecdn.com/articulo_multimedios.aspx?id=163283&guid=0CE1A370CAA843839402FAB4A3B682F7&Seccion=63

I think this needs monitoring to see how real it is in practice or just an excuse for more taxation hikes after the election.

 

[Matilda]

I'm not sure how much things are actually going up. I shop for the colmado in the market and the warehouse and also go to local supermarkets for myself. Today I bought platanos at 7 to sell at 8 RD$, Rice has not gone up, sugar has not gone up, chicken has gone down, coca cola went down around 6 months ago, beans the same, water the same. However, in Jumbo Coca Cola is now more than in our colmado, Presidente is the same, milk has gone up (we are the same). So why are the big supermarket chains putting things up that are the same price??? There are no poor Dominicans shopping there, mostly foreigners and rich Dominicans. What are they paying more for to justify hiking their prices?

Matilda

 

[DRob]

The problem isn't the "rich". The problem is that much of the population of the DR has little interest in increasing their ~personal~ ecomomic resource: their knowledge and edumacation. Until the "want to" is there for edumacation, the average poor shmoe in the barrio isn't going to see his life change for the better, regardless of the overall increase in resources. Edumacation has always been a classic economic "multiplier".

The "pull themselves up by their bootstraps" rationalization is an old chestnut of conservative thought. In addition to only being plausible in a vacuum where all things are equal (obviously not the case), the problem is that in addition to individual initiative, you've got to have certain things in place to do well. Like a decent education structure. Kids know when they're being given the keys to a better future, and when they're merely being corralled in school until they reach the age of majority.

You're talking business, so consider this: you sell widgets, and you, solely by your own hard work and personal initiative (naturally), are the finest widget maker in history. Problem is, the market is hundreds of miles away, and there are no roads, ships, or other vehicles. How well are you going to do?

The point is, in addition to your own hard work, you need infrastructure to do well. That's one of the key points of community and (good) government. Likewise, kids (we are talking about kids here) already have a desire to do well. They just need quality education and opportunity to make that leap to self-reliance.

After all, no man is an island, even if he's on an island. :glasses:

p.s. Bad idea to use the word "edumacation" or disdain the value of learning in a post which contains two typos.aranoid:aranoid:aranoid:

 

[cobraboy]

The "pull themselves up by their bootstraps" rationalization is an old chestnut of conservative thought. In addition to only being plausible in a vacuum where all things are equal (obviously not the case), the problem is that in addition to individual initiative, you've got to have certain things in place to do well. Like a decent education structure. Kids know when they're being given the keys to a better future, and when they're merely being corralled in school until they reach the age of majority.

You're talking business, so consider this: you sell widgets, and you, solely by your own hard work and personal initiative (naturally), are the finest widget maker in history. Problem is, the market is hundreds of miles away, and there are no roads, ships, or other vehicles. How well are you going to do?

The point is, in addition to your own hard work, you need infrastructure to do well. That's one of the key points of community and (good) government. Likewise, kids (we are talking about kids here) already have a desire to do well. They just need quality education and opportunity to make that leap to self-reliance.

After all, no man is an island, even if he's on an island. :glasses:

p.s. Bad idea to use the word "edumacation" or disdain the value of learning in a post which contains two typos.aranoid:aranoid:aranoid:

My edumacation is classic econimics at the post-grad level; my post was from that perspective only, guns and butter, and widgets. I never intended to get into a socio-economic discussion.

Education is an economic resourse. It is an area I would hardly mock.

 

[DRob]

DRob,

Where would you put the economy of DR in the global sphere?
Would it... could it actually influence markets other than the price of Platano or bananas for example.

If the socical econonmic spread was different ie higher percentage of Middle to Higher social groups how would that effect the economics of the island and to bring it back on message the rising prices of food.
Surely the lack of quantity is the problem here. The pond is just too small.

Skippy1

DR is considered the third poorest country in the Caribbean, behind Haiti and Cuba. Regardless, I'm focusing on the pond. After all, the Dominican economy is profoundly important to Dominicans.

To your question: interestingly enough, a surging middle class would actually drive prices up, at least in the short term.

At the risk of sounding simplistic, more people with more money creates a greater demand for goods and services (e.g., India and China), especially for staples such as better food, clothing, housing, and transportation.

However, up to a point that would be adjusted as the flow of goods and services increases to match the demand. That increase would continue until either the market matures or saturates or supply capacity is maxed out.

In a larger sense, that's what's happened in the rest of the world. Raw materials were dirt cheap in the '90s, but then countries with populations numbering in the billions started doing better economically. They produced massive numbers of highly educated, poorly compensated people who wanted a nice car just like that number in your garage.

And there's only so many cars that can be made, so much oil that can be pumped, so many crops that can be grown.

So in a sense, Skippy, you're right - the pond is only so big. The thing is, the whole world is contracting into the same type of economic dynamic.

In a nutshell, that's why your spam costs more than it used to.

 

[NALs]

DR is considered the third poorest country in the Caribbean, behind Haiti and Cuba. Regardless, I'm focusing on the pond. After all, the Dominican economy is profoundly important to Dominicans.

Substantiate that claim.

The latest GDP per capita on Purchasing Power Parity data shows that the DR is wealthier than the following Caribbean island countries (in descending order):

Anguilla
Saint Kitts and Nevis
Jamaica
Saint Lucia
Cuba
Grenada
Dominica
Haiti

Among Hispanic countries, the DR is wealthier than (in descending order):

Panama
Peru
Colombia
Ecuador
Guatemala
El Salvador
Cuba
Bolivia - Bolivia is not only poorer, but its economy is remarkably smaller than that of the DR, despite both countries having a similar population size and Bolivia being many times larger than the DR in territory size.
Paraguay
Honduras
Nicaragua

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

In terms of size, the DR's GDP (PPP) is the largest economy in the Central American/Caribbean region and ranks 69th in the world and 11th in the Americas.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

Not bad considering that the DR was the poorest country in Latin America (at par with Haiti) at the time Trujillo was killed in 1961. What a difference 47 years of trade lliberalization and consolidating democracy has made not just within the country, but in relation to its neighbors, most notably the widening gap of wealth and development between the DR and Haiti and the closing gap in GDP per capita (PPP) between the DR and Puerto Rico and in relation to other countries in the region.

-NALs

 

[Ringo]

No offense intended.

It is very nice that we have so many that understand all the "talking heads" on TV and the economic models of the past that have proven to now be obsolete.

The reasons for the economic changes/cost of living in the Dominican Republic is connected to a change in the global markets in every area. The reasons and speculation concerning the who, why and how does not help the people in the Dominican Republic or elsewhere. It is in the past and a different adjusted model will needed and tried, to even everything out again.

The question of how to affect the local cost of living and WHAT can be done to help and hedge the local D.R. cost of living and to perhaps change the future for the Dominican Republic might be of more value.

Ringo

 

[Chris]

Substantiate that claim.

Kindly don't waste time on this issue and let the discussion continue. We will take it that the facts are more or less right, or more or less wrong - it makes no material difference to the discussion. We don't want to dilute or hijack the discussion.

(Thanks Ringo, for that timeous intervention!)

Carry on!
(So many economic indicators, so little time!)

 

[cobraboy]

Kindly don't waste time on this issue and let the discussion continue. We will take it that the facts are more or less right, or more or less wrong. Going into substantiation here will simply dilute and hijack the discussion of this thread.
(So many economic indicators, so little time!)

(Thanks Ringo, for that timeous intervention!)

Carry on!

Why?

NAL's made some excellent FACTUAL points that were entirely within the realm of both the thread and the DR.

A poster made a spurious claim and was called on it. You have personally done that yourself.

 

[Chris]

Why?

NAL's made some excellent FACTUAL points that were entirely within the realm of both the thread and the DR.

A poster made a spurious claim and was called on it. You have personally done that yourself.

Let the thread continue. Nal's numbers are not fully germane to the discussion and the discussion can continue whether Nals is correct or not. There is nothing in it for this purpose. If you are further interested, pm Nals. I'm sure he'd like to discuss the hard numbers some more. Close enough for 'government work' on this one. <!-- / message --><!-- controls -->

 

[cobraboy]

Let the thread continue. Nal's numbers are not fully germane to the discussion and the discussion can continue whether Nals is correct or not. There is nothing in it for this purpose. If you are further interested, pm Nals. I'm sure he'd like to discuss the hard numbers some more. Close enough for 'government work' on this one.

DR is considered the third poorest country in the Caribbean, behind Haiti and Cuba. Regardless, I'm focusing on the pond.

The thread was doing fine, Chris.

The poster made a profoundly inaccurate statement which, left unchallenged, totally skews the entire concept of "Rising Cost of Living" in the Dominican Republic.

As a moderator, I would hope you'd want accuracy in posts, since you've called out folks on precisely that issue in the past. But if you're OK with that...well, I'm just sayin...

 

[DRob]

I don't post spurious claims, Cobra, and Chris isn't covering for me. She's actually trying to protect you and preserve the thread.

To NALs request that I substantiate the claim: Here's the IMF GDP, per capita for 2008 (est.)

Report for Selected Countries and Subjects

Now, back to our regularly scheduled topic. :glasses:

 

[cobraboy]

I don't post spurious claims, Cobra, and Chris isn't covering for me. She's actually trying to protect you and preserve the thread.

To NALs request that I substantiate the claim: Here's the IMF GDP, per capita for 2008 (est.)

Report for Selected Countries and Subjects

Now, back to our regularly scheduled topic. :glasses:

"Shaded cells indicate IMF staff estimates"

Estimates.

For 2008.

And it's only April.

Normally macroeconomists use hard historical data, and not projection estimates.

That aside, I do appreciate your opinions on economics. I have always enjoyed listening to folks who have some knowledge of the "science" of allocation of resources and economic behavior.

(Oh, and Chris would never, ever protect me. Au Contraire. She guns for me. Just do a search...)

 

[Chris]

Cobraboy, you have a lot to learn about this board. Right at this moment, you're hijacking this thread and diluting the focus. I'm going to delete further hijacks. Please refresh your memory on the initial questions asked in this thread. Feel free to open another thread on GDP.

 

[Chris]

Here are the original questions and original post. Please let's continue a good discussion.

The IMF World Economic Outlook that came out a day or so ago considers that the US economy is not going to be too healthy, and this will certainly impact the remissions and tourism to the DR. Caribbean economies are being cautioned to brace for a significant slowdown in economic growth over the next two years as well as an inflationary spiral seen in the increasing food prices.
With the value of the dollar tanking a little every day and crude oil hitting 112 dollars yesterday, are people planning any lifestyle changes to hedge against possibly lower incomes?
Is DR property still a good bet?
Are new prospective DR expats taking the changing cost structure into account when planning to move to the DR?

 

[cobraboy]

Is DR property still a good bet?

Depends on where it is. Obviously some rich golfing mucky-mucks thought so last week when they bought...what? US$86mil?...of Cap Cana property. I suspect they are high achiever types.

Are new prospective DR expats taking the changing cost structure into account when planning to move to the DR?

Just the ones with a track record of planning will. Speaking for myself, now that I live here, yes.

I've even quit wearing a wrist watch...

 

[Skippy1]

DR is considered the third poorest country in the Caribbean, behind Haiti and Cuba. Regardless, I'm focusing on the pond. After all, the Dominican economy is profoundly important to Dominicans.

To your question: interestingly enough, a surging middle class would actually drive prices up, at least in the short term.

At the risk of sounding simplistic, more people with more money creates a greater demand for goods and services (e.g., India and China), especially for staples such as better food, clothing, housing, and transportation.

However, up to a point that would be adjusted as the flow of goods and services increases to match the demand. That increase would continue until either the market matures or saturates or supply capacity is maxed out.

In a larger sense, that's what's happened in the rest of the world. Raw materials were dirt cheap in the '90s, but then countries with populations numbering in the billions started doing better economically. They produced massive numbers of highly educated, poorly compensated people who wanted a nice car just like that number in your garage.

And there's only so many cars that can be made, so much oil that can be pumped, so many crops that can be grown.

So in a sense, Skippy, you're right - the pond is only so big. The thing is, the whole world is contracting into the same type of economic dynamic.

In a nutshell, that's why your spam costs more than it used to.

Thanks for the clear reply.
Just a few more questions for you if I may.

If the economy could grow at a sufficient rate to sustain a rapidly growing middle class (i dont like the word class here as its misleading) This would require either more jobs and exports to fuel it, better to change to a financial services economy (thinking of Switzerland) As the skill base is relatively low and manufacturing pretty much non existant. The IT infrastructure here is quite good and access to the markets does not seem to be a problem, could this be a better way for the government to go.
Tax havens aside it would make sense to me.
I dont think DR could compete in any other market with much success....?

Should DR expand on the agriculture or is the competition and cost of transportaion too high to be viable. Thinking that all markets are a long distance ie USA Europe etc.

Last thing is it really benificial to grow eco fuel crops here instead of food crops, could this be a niche market that would pull DR ahead of its neighbours?

There that should keep you busy .....lol

Skippy1

 

[Thandie]

.......my heart bleeds at the inequality of who we are and where we were born.

Rio

Well said!
Our geographical birth location should not determine our quality of life....but that is not the reality. I am just lucky that my mom gave birth to me in Canada!