<p>In terms of average annual economic growth, the Dominican Republic has been one of the best-performing countries in Latin America since 1960. However, a closer examination shows that its economic performance leaves much to be desired. In fact, starting from a comparatively low income level in 1960, the country should have recorded a higher rate of growth and further closed the income gap with the rest of Latin America than it actually did.</p>
<p>The Dominican Republic has had a chronically high unemployment rate fluctuating between 15 and 20 percent in recent years. It has also suffered from a high degree of macroeconomic instability. Moreover, comparison within the Latin American group is misleading because the region as a whole has not had good economic performance over the past few decades. Comparison with global benchmarks instead shows that the Dominican Republic has had significant problems in its investment and trade patterns. Its investment has remained well below 15 percent of GDP, and its trade volume has hovered around only 50 percent of GDP over the past several decades.</p>
<p>The Dominican Republic should use export development as the engine of growth and the organizing principle under which industrial upgrading, infrastructure development, and human resource development could be pursued. Moreover, the country should recognize that competitive exports based on domestic industrial capabilities can provide a solid basis for maintaining macroeconomic stability.</p>