Weekly Report - 17 February 2004

DOMINICAN REPUBLIC | Funds & power flow again. The IMF approved last week the Dominican Republic's economic performance in its first review of the US$657m standby agreement signed last August. Consequently, it has cleared the disbursement of a second tranche of US$66m.

On the power front it is the pesos rather than the generals that are doing the trick. Following part payment of the government's overdue debt with the generating companies [WR-04-06], several of these have resumed normal operation, more than halving the electricity deficit to 200-300MW in peak hours. This has translated into fewer and shorter blackouts.

DOMINICAN REPUBLIC | Tourism on sharp upswing. Central bank figures show that last year the number of tourist arrivals increased by 19.5%, to 3.2m (of which 523,000 were Dominicans resident abroad). Per capita they seem to be spending less: revenues from tourism were up only 14%, to US$3.1bn. Both figures, incidentally, were new records; they overtook the previous peak year of 2000, when 2.9m visitors generated revenues of US$2.86bn.

The Dominican Republic registered the highest growth rate in the Caribbean last year, followed by Cuba (up 13%), Jamaica (+7%) and Puerto Rico (+5%) — according to the World Tourism Organisation (WTO). The Dominican upswing is continuing into this year: arrivals in January were 7.7% higher than a year earlier. For this year the WTO has forecast a 3.9% expansion of tourism in the Caribbean as a whole.

CENTRAL AMERICA | First steps towards customs union. Guatemalan President Oscar Berger is predicting that his country will be able to agree to establish a customs union with neighbouring El Salvador `within 90 days'. Honduras, he said last week, has asked for a bit more time. Berger will be broaching the subject with his Salvadorean peer Francisco Flores at the summit he will be hosting on 27 February.