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The Dominican Republic is scheduled to hold a general election
on 5 July. The main contenders for the presidency are Gonzalo
Castillo, the former minister of public works (2012-19), from the
ruling Dominican Liberation Party (Partido de la Liberación
Dominicana: PLD) and Luis Abinader of the main opposition Modern
Revolutionary Party (Partido Revolucionario Moderno: PRM). The
general election, which was originally scheduled for 17 May, was
postponed because of the spread of the coronavirus disease 2019
(COVID-19) virus.
A state of emergency that includes a 12-hour nightly curfew has
been in place since 16 March. Apart from essential businesses and
industries (healthcare, pharmaceuticals, communications, energy,
and food), most commercial activity is closed, as are the country's
borders, including for passenger flights and non-cargo vessels.
Tourism, which accounts for 7.4% of GDP and generated USD7.5
billion in revenue for the sector in 2019, is almost completely
suspended.
According to the Ministry of Public Health and Social Welfare,
there were 27,936 COVID-19 confirmed cases and 675 related deaths
(566 new cases in the last 24 hours and around 835 people currently
hospitalised) as of 23 June.
Significance
Regardless of Castillo or Abinader winning and/or securing a
parliament majority, pro-business policy continuity is likely and
the PLD and the PRM are likely to co-operate and agree on
COVID-19-virus-related restrictions and economic reopening
policies. Both are likely to prioritise and co-operate in the
allocation of budget to transport and energy infrastructure
upgrades. This is likely to take the form of allocation for private
public partnership (PPP) investments to expand road infrastructure
connecting the main cities with the regions and tourist hotspots,
as well as expanding electricity power generation, including
coal.
Following the resumption of international flights, which
according to IHS Markit sources could be as early as 1 July, the
main challenge for the next administration is on how to ensure that
hotels and restaurants remain operational and safe at a time when
authorities have so far not effectively reduced the spread of the
COVID-19 virus. This is crucial since if the virus continues
spreading after the lifting of restrictions, supply chains are
likely to continue being disrupted and the country's 80,000 hotel
rooms are unlikely to be able to reopen fully.
An indicator of supply chains being able to resume would be the
lifting of travel alerts from the US and EU authorities. A rise in
COVID-19-virus-related deaths and new contagions would indicate
further disruption to tourism and construction works despite the
lifting of restrictions.
Posted 25 June 2020 by Diego Moya-Ocampos, LLB, Principal Analyst, Country Risk Americas, IHS Markit
