Sudden Chill Catches Dominicans

Recession, Jet Crash Rein in Hot Economy

By David Abel  |  Globe Staff  |  11/18/2001

BOCA CHICA, Dominican Republic - Over the past decade, an infusion of malls, fast-food joints, and high-rises made parts of the capital look like Miami. A modern, four-lane highway replaced dangerous, potholed roads connecting the north and south. And an ever-increasing number of cranes above tourist resorts and cities led some here to joke that the country had a new national bird.

Long beset by poverty and political corruption, the Dominican Republic economy had become the fastest growing in Latin America. The average annual income here never rose above $2,400, but in the 1990s thousands of people found jobs in newly created free-trade zones, billions of dollars sent from relatives in New York and Boston helped build additions to countless numbers of homes, and inflation and unemployment levels dropped. Last year the country's economy boasted a record 8 percent growth.

The party came to an abrupt end after three blows in swift succession clobbered the economy.

Last winter, the onset of a global recession put brakes on the boom. The terrorist attacks on Sept. 11 instantly cut the twin bulwarks of the economy, tourism and money sent from New York. And on Monday, the 8 million people of this Maine-sized nation saw hopes of an economic rebound vanish with the crash of American Airlines Flight 587.

"When the United States sneezes, the old joke here goes, the Dominican Republic catches the pneumonia," said Gary Clements, the chief economic officer at the US Embassy in Santo Domingo. "These are such unprecedented events that it's hard to know how things will turn out."

After 10 years combing the beaches here with suitcases full of amber rings and silver necklaces, 32-year-old Toni Quintero says he's looking for a new line of work. Selling trinkets to tourists just hasn't paid off in the past two months.

"The drop has been massive. Business is down 70 percent," he said. "There's no one here anymore - and I blame it all on [suspected terrorist Osama] bin Laden. He's killing us, too."

Felix Incarnacin had long made the hourlong trip here from Santo Domingo to hawk his cigars and pipes at a street fair, but now he isn't sure it's worth the gas anymore. In 11 years living off tourists, the 24-year-old has never seen business dry up like this. "It's the worst it's ever been," he said as he tried to lure the few tourists here from the other vendors.

The triple hit to the economy has all but gutted the country's growth.

Economists here say the nation should still muster about 2 percent growth for 2001, but their forecasts range from negative to zero growth in 2002.

On an island where blackouts in cities are as common as zinc-roof huts in the countryside, the abrupt recession has had brutal consequences.

Desperately needed roads that had been planned won't be built. Officials have suspended projects to complete new airports and hydroelectric plants.

Plans to build homes and offices have stopped midway through construction. And many needed services and other plans will be cut back or abandoned throughout the country.

"This is really a tragedy for such a well-performing economy," said Frederic Emam-Zade.

He served as deputy secretary of state under the last president, Leonel Fernandez, whom many credit with ushering in genuine democracy in the Dominican Republic. That move toward democracy continues under current president Hiplito Meja.

Now an economist at a local think tank, Emam-Zade says he's trying to remain optimistic: "This is a shakeout. We will learn from it and be more competitive when it's over."

But others are less sanguine - especially those in the hotel industry, which is feeling the full brunt of the economic downturn. Since Sept. 11, at least 30 hotels have closed, those in the industry here say.

For those remaining open, staffs have been cut back significantly over the past two months, and two economists estimate that 30 percent of tourists who planned to visit for the holidays next month have already cancelled their reservations.

In Boca Chica's largest and oldest hotel, Coral Hamaca, more than 200 of 630 rooms were unoccupied this week, a large number of vacancies for a hotel whose occupancy rate usually tops 90 percent this time of year.

Last year, tourism increased 15 percent from the previous year, the average growth rate in recent years. But now, under even the best-case scenario, tourism will pump $2.8 billion into the Dominican economy for 2001, marking a 2 percent decline from last year and the first time in many years that tourism would have failed to grow.

"We've become part of the global economy," said William Malamud, executive vice president of the American Chamber of Commerce in the Dominican Republic. "It has brought wealth to the DR, but when there's a dive in the global economy, we take the dive, too."

The tourists may have thinned out, but the merengue, salsa, and bachata music are still blaring. The pina coladas are flowing from the stocked bars by the white-sand beaches. And the ebullient staff at resorts here are ever present, beseeching tourists to play volleyball or watch a live show.

For more years than he can remember, Johnny Velez has been greeting tourists with a wide grin and sending them off on whitewater rafting trips in the country's mountains, on helicopter and horseback rides, and on diving tours in the aquamarine waters surrounding the lush two-thirds of the island the Dominican Republic shares with Haiti.

There are certainly fewer Germans, French, and Americans here now, but Velez says he is confident they'll be back in droves soon enough.

"They'll want to escape the cold," he said with a smile. "That's a desire immune to terrorism, I hope."

Previous Day's Story:


By David Abel  |  Globe Staff  |  11/15/2001


BANI, Dominican Republic - Most were coming down for the nine-day annual fiesta to celebrate their town's patron saint. Instead, the feasts that began Monday were abruptly canceled, the bouncy music usually blaring from every bodega was silenced, and the processions through the narrow, centuries-old streets are now to mourn the dead.

On one corner here a man wearing a tattered T-shirt with faded letters spelling "Jamaica Plain Community Center Day Camp Staff" strolled over to a sign bearing a list of names, shook his head a few times, and said he couldn't find the words to express his feelings.
The sign listed the names of the more than 200 Dominican passengers who died on flight 587 - 41 of whom officials here believe were born in this Dominican town about 40 miles west of Santo Domingo.

"We were hit the hardest of anyone in this country - and it's not easy," said Bani Mayor Daniel Alvarez whose hilly town of 120,000 people is the source of more Dominicans living in Boston than any other part of the Dominican Republic. "This is a tragedy that came so quick and affected so many here that it's still hard to believe."

Nearly everyone here knows a neighbor, cousin, or friend who died Monday when the American Airlines flight dropped out of the sky shortly after takeoff in New York.

Government officials say 30 families in Bani lost relatives. Few could mistake the sorrow in the streets. On Monday, Dominican President Hipolito Mejia ordered the nation to observe three days of official mourning. Here, that meant all the shops set up to sell food, toys, and party gifts to honor La Virgen de La Regla were closed and the town's plaza looked like an empty carnival.

Few here could be deaf to the sobbing that echoed over the past three days from dozens of verandas like the one at Ramona Amparo Pimentel's well-furnished home.

Her son, Viky Andrew Pimentel, was in the middle of a two-hour drive to Las Americas International Airport to meet her when a radio bulletin nearly made him drive off the potholed road. He raced to the airport and immediately called relatives in New York, who told him his mother was aboard the flight.

"It was absolutely terrible, terrible - it was her birthday, she turned 55 on Monday, and we had a big cake for her," he said.

Another surviving child, Jitte Gool Pimental, with tears welling said, "She kept saying she didn't want to fly. It was like an omen or something."

Pimental was returning home after a two week visit to a brother in Brooklyn and a niece in Jamaica Plain. Like many Dominicans who live in the United States to earn a living, she decided to retire in the Dominican Republic. But she didn't want to lose her residency status and made sure to visit the United States several times a year.

The matron of a large, far-flung family who owned a bodega in Brooklyn, Pimental often helped support her children and cousins and many of them comforted each other yesterday in her open-air living room.

A similar misery filled the home a few blocks away of Altagracia and Mercide Sanchez. The couple lost two of their four children. Jose, 36, and Elvis, 34, both worked at an uncle's bodega in Washington Heights and both were married with children.

Nearly a dozen neighbors and friends sat on rented chairs in the Sanchez living room and grieved with the retired couple, who had also worked for many years in New York. The two said American Airlines is flying them to New York today so they can help identify the bodies of their sons and bring them home.

"I was cooking for them when I heard the news - and I haven't had any peace since," Altagracia said. "They always loved to be down here this time of the year and they would always go out and dance and see old friends. It's hard to believe they won't be here anymore, too hard."

Two blocks away, Juan Antonio Brito couldn't stand the constant crying in his house so he went to his outdoor, dirt-floor autoshop and worked at repairing an old engine rather than mourning the loss of his 53-year-old sister, Margarita Reina.

"This town doesn't deserve this," he said.

David Abel can be reached at

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