The state of financial services in the Dominican Republic has come a long way since the Caribbean country began the millennium with one of the region’s largest banking scandals, which saw the collapse of Banco Intercontinental. With a diversified economy that includes agriculture, construction, mining and tourism, the Dominican Republic saw foreign investment top $2.2bn in 2014, according to the country's central bank.
But the Dominican Republic still accounts for less than 1% of the global market for offshore financial services, according to a recent index by the Tax Justice Network. When it comes to the ranking's secrecy points – which reflect about 50 measures of financial secrecy and reflect the importance of each jurisdiction in providing financial services to non-residents around the world – it scored 73 out of 100, which places it towards the top end of the secrecy scale, and thus suggests the potential for improvement.
Perhaps the most vivid example of the growth and diversification of financial services in the Dominican Republic in recent years has been the mobile money industry. In 2013, global financial services company Citi launched in the Dominican Republic its Citi Mobile Collect, a provider payment system enabling even small corner shops to replace cash payments with mobile transactions to providers who are Citi corporate clients such as Philip Morris Dominicana and Frito Lay Dominicana.
Then, in 2014, the prepaid telecom operator Orange and Banco Popular Dominicano, the largest bank in the Dominican Republic, launched the mobile money initiative M-Peso, which combines a bank-emitted prepaid mobile wallet with an active mobile number than enables a customer to combine the telephone plan with the wallet.
And despite glum predictions of a regional economic slowdown in Latin America and the Caribbean, at a conference in Santiago, Chile, in July, the UN’s Economic Commission for Latin America and the Caribbean projected a 4.8% growth rate in the Dominican Republic for 2015.
But challenges remain. Ruled for the past decade by the Dominican Liberation Party, and since 2012 by the administration of president Danilo Medina, it remains to be seen what impact calls for a tourism and economic boycott on the Dominican Republic – based on controversy over the citizenship status of tens of thousands of Dominicans of Haitian descent – will have.
The Dominican Republic shares the island of Hispaniola with often unstable and poor country of Haiti, and immigrants from Haiti – both the Dominican-born descendants of Haitians and newly arrived migrants – play a pivotal role in filling low-paid jobs in the Dominican Republic.
A 2013 Dominican Supreme Court decision retroactively stripped citizenship from thousands of people of Haitian descent born in the Dominican Republic, and a 2012 'naturalisation' law designed to regulate the status of those affected has, some say, been selectively enforced leading to what Human Rights Watch calls “ongoing violations of the human right to a nationality”.