Bernardo Vega takes a not-too-optimistic look at the possible consequences of DR-CAFTA in the Dominican Republic, and he starts by looking at Mexico ten years after the NAFTA agreement between Canada, the USA and Mexico went into effect. The historian and economist says that in Mexico studies looked at which sectors benefited and which sectors were hurt by NAFTA, and therefore, a bit of what he calls “futurology” might be beneficial in order to see what the Dominican Republic will be like in ten year’s time. Most experts feel that the transformation of Mexico from the ‘perfect dictatorship”, to use the Mario Vargas Llosa phrase, that was controlled by one party – the PRI – for decades, towards a democracy, is owed, in great part, to the existence of NAFTA. The privatization of state-owned companies, the requirement to hold open bidding on public works projects and government purchases, the decrease in state corruption and the greater transparency all reflect the obligations undertaken with the United States and Canada. Consequently, we can project that in our country, in 2016, the will be a lot less corruption and much more transparency, and, certainly, less contraband. Private American and Central American investments will be much more important than they are now, especially in areas such as banking and insurance. Foreign debt, in stead of being primarily with Spanish and Brazilian banks, will be ever more with American banks, since public works projects will have open bids. American and Central American imports will increase enormously, and it won’t make much sense to buy anything in the United States since the same products will be sold here at nearly the same price to the benefit of the consumer. Vega says that the value of the peso will depend on our capacity to export services, since we will increasingly become more of a service-based economy rather than one of primary production, as well as being ever more urbanized. Crime will probably increase and so will illegal migration, just as has occurred in Mexico. And as in Mexico, traditional small-scale agricultural production which is what Dominican campesinos currently engage in will be strongly affected by the import of subsidized products from the United States. Just like Puerto Rico and other Caribbean islands, we will import rice and beans, onions and garlic and so forth, creating a food dependency that could produce serious problems in cases like the hurricane that just demolished New Orleans. Current shipments of wheat and corn will probably be delayed, creating local shortages. The sugar industry that currently represents less than 1% of GDP will become even less relevant. The rural worker, the campesino, not being able to compete, will migrate to the cities, expanding the poverty belts surrounding the cities. In agriculture, only those large agro-businesses directed towards exports and run by foreigners, will survive. The cost of medicine will increase with the reduction of local products. Vega ends his look into the future with a message of hope.
Only if ALCA becomes a reality, and the DR gets better terms than exist under DR-CAFTA, can traditional agricultural production possibly survive. This could also happen if Europe and the United States were to get together within the next five years and decide to abolish their agricultural subsidies. Geo-politically, our dependence on the United States will increase. Vega says we will be like Puerto Rico, only poorer, and without the escape valves of federal subsidies and unlimited migration to help us.