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Dominican president faces toughest term



By JONATHAN M. KATZ, AP
17 May 2008 @ 08:55 pm EST


APTOPIX Dominican Republic Elections
Dominican Republic's President Leonel Fernandez, center, who is running for reelection for the Dominican Liberation Party, delivers a speech in Santo Domingo, Saturday, May 17, 2008. Fernandez declared victory early Saturday in the Dominican Republic's national election while his main rival, center-left construction magnate Miguel Vargas, who received 41 percent of the vote, said he accepted the results. At left is Fernandez's wife...
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If the economy slows, millions of Dominicans will find themselves without a safety net.

Giselle Taveras, a 32-year-old beauty product saleswoman, said her working-class Santo Domingo neighborhood is suffering. "Things are terrible. There is a lack of work, there are no good hospitals," she said.

Much of the economic growth that helped Fernandez win at least 2.2 million of more than 4 million votes cast Friday is credited to a US$695 million (euro448 million) loan package from the International Monetary Fund.

The cash helped stabilize the peso and draw foreign investors, who expect returns on their sprawling new resorts and improved airports. For that, they need a steady diet of tourists with disposable incomes.

Fernandez needs a return on his own big bets, such as a US$710 million (euro458 million) subway system that has not yet opened in the capital. He plans to refinance some of the country's US$8.8 billion (euro5.68 billion) public debt and look for ways to boost expected declines in exports and remittances.

Fernandez has also proposed investing in domestic ethanol production and natural gas to slash oil dependence, and aiding farmers in a bid to boost agricultural output.

But his administration may have tried to dress up the economy ahead of elections with food subsidies and investment in big-ticket items like bridges and the public subway, said Jonathan Hartlyn, a University of North Carolina political scientist who studies Latin America.

"There is a bit of a question mark about how favorable the economy is going to look a year from now," he said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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