An example from the Dominican Republic: As the old sugar...

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An example from the Dominican Republic: As the old sugar economy died in the 1980s, both the Jorge Blanco and Balaguer governments embraced a new economic strategy based on tourism and "free-trade zone" assembly plants.

The Reagan administration's 1983 Caribbean Basin Initiative, which gave imports from Caribbean countries preferred access to the U.S. market, fueled the growth of free-trade zones - much as the North American Free Trade Agreement later fueled the maquiladora economy of northern Mexico.

The Dominican government used tax breaks and other subsidies to attract U.S. firms, which own almost half the factories in the free-trade zones.

By 1999, four sectors of the economy, each with an annual growth rate exceeding 10%, were powering the Dominican "miracle": telecommunications, construction, tourism, and free-trade zone manufacturing.

Tourism alone generated more than $4 billion in foreign exchange in 1999. Meanwhile, the 43 free-trade zones - where more than 400 factories employed 200,000 people - accounted for almost $1 billion in exports in 1998.

Greg Peters, April 1 2008, 7:43 PM

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