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During the last decades, the Dominican economy has experienced a deep structural transformation. A transition from an agricultural economy generating more than 80% of its exports in traditional commodities, mainly sugar, and a model based on import substitution, from 1948-1960, to a service oriented economy accounting for more than 35% of its exports during the decade of 1991-2000.
The model of Free Export Processing Zone introduced in the decade of 1971-1980, based on the unilateral US market access preferences gained through the Caribbean Basin Initiative (CBI) proved to be of paramount importance in this transformation. Exports from the FTZ represented 51% of DR’s total exports from 1991-2000.
The results of this transformation which included less government intervention through the elimination of price controls, exchange rate liberalization, and capitalization of state owned enterprises, brought economic growth above the Latin American average and a tremendous inflow of foreign capital.
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