Ignacio Portes and Lucas Berti
Record tourism figures propel Dominican economy
The Dominican Republic’s paradisiacal beaches, ringed by turquoise waters and combined with attractive prices for dollar earners only a couple of hours away on the U.S. East coast, make the country an easy-to-access and highly appealing destination. It all adds up to a tourism sector that accounts for roughly 15 percent of GDP, 30 percent of exports, and 900,000 jobs.
- But the performance of the sector last year was “exceptionally high” even by Dominican standards, a recent report from the World Tourism Organization (UNWTO) says, putting the country’s post-pandemic recovery “above the global average.”
Leader. Over 8.5 million tourists entered the Dominican Republic in 2022, an astounding figure in a country of just 11 million citizens. As a comparison, Brazil only welcomed 3.5 million tourists despite being 175 times bigger and having 20 times its population. Only Mexico, a giant on the U.S. border, managed to top the Dominican total.
History. Despite its obvious competitive advantages, the Dominican Republic has been building its reputation as a tourism hotspot for decades, with governments building resorts and enacting laws to boost the sector since the 1930s. But tourism only took off after the end of armed conflicts in the 1960s, turning it into a well-known hub by the turn of the 21st century.
- Tourism has been one of the factors behind the country’s steady GDP growth rates, which averaged over 5 percent over the last three decades — a stark contrast with neighboring Haiti, known for its economic and political instability.
Covid. As in all tourism-dependent economies, the Dominican Republic was hit hard by the pandemic, pionering a plan to cover eventual Covid-linked medical expenses to avoid a full collapse of the sector, as The Brazilian Report explained in 2020.
- “While the world was closing, the country took risks to see the glass half-full and not half-empty,” Tourism Minister David Collado said this year. After weathering the storm, the country now boasts visitor figures 11 percent above pre-pandemic levels.
More to come. The sector’s robust recovery is showing no signs of abating, with new records likely to be set in 2023, after 4.5 million tourists visited the country in the first five months of the year. More than half those visitors came from the U.S., followed by Canada, Colombia, Argentina, and Puerto Rico.
Yes, but … Despite economic growth, many Dominicans still struggle with poor living conditions, ranging from housing deficiencies in a country frequently hit by natural disasters to undernourishment affecting 7 percent of the population — a big improvement over past decades and a clear outperformance of many neighbors but still lagging behind countries like Mexico or Brazil.
- The country is also struggling with poorer fiscal and trade results, leading to rising levels of public debt, which raise questions about the longer-term sustainability of its growth.
Boluarte leans on elite support to complete term as caretaker president
Dina Boluarte’s government in Peru has been just as unpopular as that of her disgraced predecessor Pedro Castillo, who is currently in jail after attempting an illegal dissolution of Congress.
- Since taking office as caretaker president in December, Ms. Boluarte has responded to protests backing the deposed Mr. Castillo with brutal police repression, leading to the deaths of dozens of protesters.
Clinging on. Despite this, she has felt empowered enough to reject calls for an early election, saying recently that she will stay in office until 2026, the end of Mr. Castillo’s original term, which she is entitled to complete as his former vice president.
- This is a stark contrast to Ms. Boluarte’s first months as head of state, when her administration was besieged by calls to hold an early vote from her former allies on the left as well as from the congressional right.
- Today, Peru’s public opinion is divided, with half of those consulted believing the president might last the full term despite it all.
What changed. According to Peruvian political expert Alonso Gurmendi, Ms. Boluarte has bought time by siding with the most powerful groups in the country, from the right-wing dominated Congress to Lima’s economic elites.
- “Her government has revealed the cracks at the heart of Peru’s social contract. A recent poll showed that 71 percent of CEOs (mostly based in Lima) approve of her government, whereas 80 percent of the population disapproves of it,” Mr. Gurmendi told The Brazilian Report.
- “Ms. Boluarte is seen as ‘protecting the economy’ and that is enough even if she is being repressive or siding with racist groups.”
Elites. Support from Lima’s elites has historically been crucial for Peruvian governments, with presidents touring the capital’s power centers during their campaign even when they came from left-wing stock. Mr. Castillo was the exception to the rule, contributing to his tempestuous time at the helm.
Markets. Investors have reacted positively to Ms. Boluarte so far, pushing Peruvian stocks 18 percent higher since she took office, while the Peruvian sol also appreciated by 10 percent in the same period.
Yes, but … This doesn’t mean that Peru is in great economic shape, as political instability is finally catching up with what once was a booming economy. The country’s crucial mining sector has gone through 11 ministers in the last seven years, leading to paralyzed projects across the board.
- El Niño is also set to hit the country harder this year, adding to economic losses, and analysts are already forecasting that the country will enter into recession in 2023, contrary to most Latin American peers.
- Looking deeper, the pervasive matter of inequality continues to fuel the flames of conflict, as an underfunded healthcare system has meant that citizens struggled for coverage during recent crises, one of many signs of the country’s social asymmetries.
What next. The government is facing a new round of protests on July 19, with demands ranging from Ms. Boluarte’s resignation to a constitutional reform and more state intervention in the economy. Attendance could be lower than in earlier demonstrations against her government, but authorities will have to show restraint if they want to avoid an escalation.
How the Gulf Clan stands between Colombia and “total peace”
When Gustavo Petro was sworn in as Colombia’s first left-wing president in 2022, one of his many goals was to put an end to the country’s century-long era of political violence — an ambitious aim that depended on addressing the complex armed conflicts taking place in Colombia’s rural areas.
Truce. On July 5, Mr. Petro signed a six-month ceasefire between the government and the National Liberation Army (ELN), the biggest remaining left-wing guerrilla in the country.
- But plans of “total peace” depend on much more than guerrillas’ will, as other armed organizations such as drug cartels and right-wing paramilitary groups also remain reluctant to put down their weapons.
Gulf Clan. One of the most notorious is the Gulf Clan, a powerful paramilitary group with over 4,000 members that is said to control a big share of the country’s massive drug trade. The group is officially known as Colombia’s Gaitanista Self-Defense Forces (AGC), named after Jorge Eliécer Gaitán, a popular left-wing leader whose assassination in 1948 marked the start of decades of armed conflict.
- Despite this, many including Mr. Gaitán’s family see the use of his name as a mere ploy to give political cover to the group’s criminal activities. If anything, the Gulf Clan’s ideology has historically leaned right.
Border. The Clan’s origins can be traced back to the Urabá region near the border with Panama, a violent area that has recently made the headlines due to the thousands of migrants risking their lives to move north.
- The Chocó department, the second-poorest in Colombia, has become especially heated in recent weeks, with 9,000 rural inhabitants caught in the crossfire of a territorial dispute between the Clan and the ELN.
Why it matters. The population of the Sipi municipality, among others, has been sequestered at home and shut off from food and medical supplies amid blockades from both groups on the access routes to the area, while the conflict has also forced local businesses to close.
- In 2023, nearly 80 percent of forced confinement episodes registered in Colombia took place in the Gulf Clan-dominated Chocó department. Most of the affected communities are Afro-Colombian and indigenous, among the most historically disadvantaged groups in the nation.
Youth at risk. In 2022, over 6,000 Chocó students left school after either being forcibly displaced or recruited by armed groups. The scenario has also led to an increase in suicides among young indigenous people.
Road to peace. The government’s truce with the ELN has survived setbacks such as an ELN bomb attack that killed nine soldiers in March. But talks with the Gulf Clan have made little progress, as members rejected the possibility of surrendering to authorities earlier this year.
- The armed conflict in Chocó makes the department “a ticking time bomb” according to Governor Ariel Palacios, but a peace deal with the clan is as important as that with the ELN so they “no longer confront each other.”
Fragmentation. Per the Armed Conflict Location & Event Data Project (ACLED), “although the Colombian government is taking steps toward peace with armed groups, the fragmented landscape of political violence in the country is unlikely to be solved in the short term.”
Mexico to reinstate electronic visas for Brazilian tourists
Mexico and Brazil on Tuesday issued a joint declaration on reinstating electronic visas for Brazilian tourists. The two countries have pledged to create a “reciprocal electronic visa system,” but did not announce a deadline for that to happen.
State of play. Most Brazilian leisure and business tourists have been required to present physical visas since August 2022, escalating on an October 2021 decision to demand electronic visas. As we explained at the time, the move was a response to the growing number of Brazilians entering Mexico in order to cross the U.S. border illegally.
- In 2000, Brazil and Mexico signed an agreement to lift tourist visa requirements. The measure came into effect in 2004 but was suspended shortly after, before being reinstated in 2013 — when Brazilians were free to enter Mexico with no visa, until 2021.
Why it matters. In the 2022 fiscal year, almost 43,000 Brazilians were arrested in the U.S. after immigrating illegally, per data from the U.S. Customs and Border Protection.
Related: Per the fresh Henley Passport Index, Brazilians have the 20th strongest passport in the world and are allowed to enter 168 countries without a visa. Chile (174) and Argentina (169) have the two strongest passports in Latin America.
Quick catch-up
In Europe, President Gabriel Boric of Chile got regional counterparts to condemn Russia in the war against Ukraine, saying such aggressions could happen to Latin America in the future. Only Nicaragua did not endorse the final EU-CELAC joint statement.
Doves defeated hawks in the center-right gubernatorial primary of Santa Fe, Argentina’s third-largest province, only four weeks ahead of the nationwide presidential primaries.
Guatemala’s electoral courts lifted a suspension against the left-leaning Semilla movement ahead of an unpredictable runoff next month. Still, the country’s top prosecution office will carry on its controversial investigation.
Ricardo Martinelli, a Panamanian former president who wishes to get his old job back next year, was sentenced to ten years in prison for money laundering. He will appeal the decision before high courts.
The United Nations’ Security Council renewed the mandate for its office in Haiti, saying the deployment of a multinational armed force will be considered as an option, as requested by controversial Prime Minister Ariel Henry.
Paraguay’s president-elect Santiago Peña visited Taipei after his win ensured the South American nation remained as one of only 13 states to recognize Taiwan.
One in every six Ecuadorian inmates are held in prison without a sentence, a census organized in the midst of a severe public security crisis revealed.
Bolivia’s opposition wants to indict President Luis Arce over his decision to reinstate influential minister Eduardo del Castillo to his post.