While relatively new, the diversification strategy has already borne fruit. Over the past six years the country has seen an average growth in real GDP of 7.7 percent, the best in Latin America.
One key to this success has been a very concerted effort by the government - through tax incentives, legal reforms, and privatization efforts - to attract foreign investment. One big draw has been the "free zones," business parks where foreign companies manufacture goods for export without paying income tax, says Judith Marcano, deputy chief of mission at the Dominican embassy in Washington, D.C. Currently, the free zones host more than 500 companies, including multinationals such as Johnson & Johnson and Corning. And the free zones have created about 250,000 jobs.
While most of these new jobs are relatively low-skill - such as assembling textiles, footwear, and electronics for export - Schroder says there's a new understanding in the country of the connection between good education and higher-paying, high-tech jobs. "While they are not quite there yet, I think that in 10 to 15 years, the Dominican Republic will give countries like Taiwan, Singapore, and India a run for the money in terms of high-tech," he says.
As important as foreign investment, which reached $1.2 billion in 2001, has been to the Dominican economy, homegrown efforts have been equally vital. Perhaps the best example of this is Tricom, a telecommunications company that was licensed to operate in 1992 and has expanded ever since. "I think we were benefactors of the terrific growth the Dominican Republic has had in terms of the GDP," says Carl Carlson, chief operating officer. "Tourism and free zones were multiplying the need for telecom. And the fact that people had more disposable income meant there was a natural demand for our services."