“The Acceleration of Change”, an article by Dr. Leonel Fernández

With the publication of El Gran Cambio (The Great Change), prominent national historian Frank Moya Pons delivered a withering blow to the traditional pessimism among the Dominican intellectual elite and introduced a new paradigm of national historical interpretation on change, progress, and transformation.

But while Moya Pons’s analysis covered a period of fifty years, from 1963 to 2013, what’s true
is that this process significantly accelerated in the eight years between 2004 and 2012.

Indeed, in 2004, the gross domestic product, that is, the country’s productivity-generation capacity over one year, was nearly $20 billion. By 2012, in turn, that figure had reached $60 billion.

This means that over eight years, the Dominican Republic tripled its capacity to generate goods and services, marking an historic milepost with no precedent in
national life.
Furthermore, to reach the figure of $20 billion it had taken the country all the years since the founding of the Republic in 1844 to 2004—that is, one hundred sixty years. Yet it was able to triple that number in just eight years.

This obviously shows that the process of change occurring in the nation in recent decades has dramatically accelerated over the indicated period.

However, there are those who, despite the irrefutable
evidence of the growth achieved, seek to belittle it, putting forward factors such as inflation, population growth, and the valuation of the production of goods and services in our country in international dollars.

This argument is based on the premise that our gross domestic product is measured in Dominican pesos, and to make comparisons over time, as we do, it’s necessary to measure in real rather than nominal terms.

The reality of
growth
Despite the jargon of economists, with regards to the presumed increase in economic growth due to inflation, the World Bank, in making location adjustments using the concept of gross national income, estimates that during the specified period (2004–12), economic activity in the Dominican Republic was multiplied by a factor of 2.66.

Nor has this growth, as has been argued, been driven by an increase in the Dominican population. According to
other World Bank data, in 2004 the population reached 9.2 million people. In 2012 that number was 10.3 million. This increase of 1.1 million persons reflects a proportional increase in economic growth by a factor of 1.12.

That said, if GDP as calculated per capita, it comes out as $5,757 per person, compared to $2,419 in 2004. This means that in the Dominican Republic per capita GDP grew by a factor of 2.38 over the analyzed period.

On the other hand,
if the production of goods and services in our country is valued in international dollars, that is, in terms of purchasing power parity (as the World Bank does it), the value of that production reached $117.337 billion in 2012, that is, 1.56 higher than 2004.

Finally, if we take the United Nations data used to create the Human Development Index, we see that in 2012 per capita GDP reached $11,190, while in 2004 it stood at $6,460, for a growth factor of 1.73.

In short, all measures of economic activity used at the global level throw into sharp relief that the Dominican Republic grew impressively from the period 2004–12.

As has been seen, internal production, in current dollars, grew threefold. National income, upon adjustment for inflation, grew by 266 percent. After adjustment for demographic growth, it surpassed the 2004 value by 238 percent; and when measured in international dollars, it was 173 percent greater
than eight years before.

In short, in any currency that’s used, one can note the acceleration in growth that took place in the Dominican economy during the period 2004–12. If the rate of exchange for Dominican pesos to Japanese yen is used, the national income was 1.8 times greater. If it’s done in euros, it was 2.4 times greater. If in U.S. dollars, 2.6 times greater; and in pounds sterling, 2.8 times.

In other words, however
it’s measured, in whatever currency, using whatever method, what happened in our country from 2004 to 2012, despite the inherited domestic financial crisis and the global Great Recession, was simply spectacular, contributing to accelerating what Frank Moya Pons correctly dubbed The Great Change.

The reality of change
It’s obvious that if the country’s productivity-generation capacity increased so significantly
over such a short period, as we’ve discussed, this should be reflected in the different economic activities carried out throughout the national territory.

And in fact this is the case. It can be observed, for instance, in the sales made by supermarket chains throughout the country. In 2004 these businesses saw sales equivalent to more than 20.824 billion pesos. In 2012 this figure topped 42 billion, for an increase of over 100 percent.

In 2004
sales of electro domestic goods stood at nearly 7 billion pesos, while in 2012 the figures surpassed 25 billion pesos, for an increase of more than 250 percent.

In the case of small and medium-size enterprises, their 2004 total sales were nearly 108 billion pesos, while in 2012 they were more than 380 billion, for an increase, again, of more than 250 percent.

In the services sector, the situation was explosive. From sales of a bit over 4 billion pesos
in 2004, there was a jump to over 56 billion pesos in 2012, for a change of greater than 1,000%.

Total shares in the Dominican financial system were worth 365 billion pesos in 2004. By 2012 they had topped 900 billion pesos, increasing by more than 500 billion.
In 2004 the financial system’s credit portfolio was just 176 billion pesos. In 2012, it was worth more than 500 billion pesos, three times more than eight years prior.

The
net assets of the financial system, which in 2004 stood at 45 billion pesos, were placed eight years later above 100 billion pesos, for an increase of more than 100 percent.

In 2004, net international reserves were $352 million. Eight years later, they were ten times larger, at close to $4 billion.

In 2004 the Dominican peso lost more than 70 percent of its value compared to the dollar. The exchange rate reached more than 55 pesos to the US currency.
Nonetheless, in the period of reference the national currency recovered by more than 40 percent.

In 2004 international credit lines were closed, owing to accumulated arrears in payment of our financial obligations. Dominican debt was qualified as junk and reduced by risk ratings agencies to the category of CCC.

In the period 2000–2004, the average annual growth of the national economy was scarcely 2.2 percent. During the year 2004–12, it neared 7
percent.

All this is why we say that this eight-year period contributed to accelerating the change the Dominican Republic has been undergoing since the death of Trujillo, with progress that impacted various sectors of the national economy and that continues today under another administration from the Dominican Liberation Party.

Related Links:
http://leonelfernandez.com/articulos/la-aceleracion-del-cambio/