Structural Change and Growth in Central America and the Dominican Republic

An Overview of Two Decades, 1990-2011

image of Structural Change and Growth in Central America and the Dominican Republic

This publication looks at changes that have occurred with the production structure, trade and society in Central America and the Dominican Republic, and how they have influenced the countries’ growth trajectories. One of the conclusions it reaches is that the subregion overall has enjoyed faster economic growth than the rest of Latin America over the two decades examined, 1990-2011, which has helped to raise incomes and living standards. Yet this progress falls far short of what is needed, given the high levels of poverty and indigence and the glaring inequalities suffered by much of the population in Central America and the Dominican Republic.

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Central America and the Dominican Republic: role in the world economy and structural change

Central American countries have a number of features in common that influence their production structure and their position in the world economy. To begin with, their territories, populations and GDP are all much smaller than those of the great majority of Latin American countries. They are all highly vulnerable to external shocks and extreme natural events. They all have structural current account deficits, have been engaged in a subregional integration process for many years and are very open to international trade (ECLAC, 2011a). In fact, their trade flows —measured as the sum of their exports and imports— represent 82% of the subregion’s GDP and, with an average tariff of 6%, they are the most open economies of all of Latin America and the Caribbean. These structural traits have a very strong influence on the design and scope of public policy and development plans. They also give rise to a number of imperatives for the reinforcement of the subregion’s integration process.

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