The tourism industry and its link to poverty alleviation in the Dominican Republic

Abstract

The Dominican Republic has an interesting juxtaposition of the largest tourism industry in the Caribbean with some of the worst social conditions in the region such as high rates of unemployment, poverty, and infant mortality. While the Dominican tourism industry experienced growth rates in the double digits in the 1990s, incomes for the lowest wage earners remained flat. This thesis analyzes if and how plans in the Dominican Republic extract greater value from the tourism industry for local economic development. It compares tourism in the Dominican Republic to models of "pro poor tourism" in the development literature. The plans steering the tourism industry in the Dominican Republic mention important factors such as social equity, labor force development and support of local businesses, but they are insufficiently detailed and do not include mechanisms for training and job creation. The private sector has demonstrated leadership in pro-poor tourism efforts in the Dominican Republic. Clustering as a national strategy to organize the tourism industry can be a promising mechanism for helping the poor through tourism in the Dominican Republic by coordinating private sector efforts. For greater distributional benefits to the poor from the tourism industry, however, these plans must be more aggressive and focused on quality job creation.