The talk of the day is the statistics that show that the Dominican Republic’s sustained high economic growth has been accompanied by an increase in poverty. Javier Baez, economist and poverty specialist for the World Bank attributed the contrasting numbers to the low social spending and the poor quality of spending of Dominican taxation resources. He said levels of spending for water, education, health and electricity are below averages for other Latin American countries, as reported in Hoy.
He said that the report “When Prosperity is not Shared”, released in February 2014, found that on average Latin American countries showed a reduction poverty, but in the Dominican Republic the trend was inverted. The World Bank report suggested major institutional reforms in the Dominican Republic as a way of accelerating poverty reduction and shared prosperity.
The report highlighted that while having one of the fastest growth rates in Latin America and the Caribbean (LAC), above 5% per year from 2000 to 2011, many of the 10 million Dominicans missed out on the benefits of economic development.
The report highlighted that GDP per capita rose 50% as opposed to a 26% increase in LAC in the last decade. Yet, only 2% of Dominicans escaped poverty compared to the 40% of poor Latin Americans.
Baez said that three out of every 10 people in the DR were poor in 2000, but as of 2010, four out of every 10 are poor.
Herrera Industries Association spokesman Victor Castro said that growth had been and continues to be “perverse” while there is so much inequality and the highest social immobility in Latin America and the Caribbean. He said that in the past decade 19.3% of the population, especially the middle class, has lowered their economic capacity compared to 1.5% in Latin America and the Caribbean.
“We are building a social time bomb. Inequality accompanies economic growth, the middle class is smaller, employment levels are stagnant and the market is weakening. We have to stop and urgently build a new model,” he said. He said only 2% have improved their status in the Dominican Republic.
www.listin.com.do/economia-and-negocios/2014/3/30/316394/AEIH-solo-2-ha-subido-de-estatus-social