DomRep’s next president to push healthcare, create loan guarantee funds

The Dominican Republic’s president-elect Luis Abinader will helm of one of the Caribbean’s strongest economies with a progressive agenda that looks to decentralize healthcare and bolster support for small businesses.

Abinader clinched victory in the first round of elections held Sunday, taking more than half of the votes, and attention is now turning to the career politician’s policy priorities for his four-year term, which begins August 16.

The incoming leader hails from a dynasty of political and business leaders, making his first attempt at the presidency in 2016 after co-founding the center-left PRM party in 2014.   

An analysis provided by US think tank CSIS said, “His first experience in 2016 helped him improve his ability to connect with people on the campaign trail,” adding that Abinader has also run the family business, which includes ABICOR Group (tourism operators) and Cementos Santo Domingo. 

PRM made headway in congress with the municipal elections held in March and Sunday’s results show it might now hold a majority in the senate, suggesting stronger support for the incoming leader’s proposals.

But the COVID-19 pandemic has limited the scope of what might be accomplished, at least for now, with 2020 GDP growth forecasts plummeting from close to 5% before the crisis to the latest IMF forecast of a 1% contraction.

The forecast is, however, one of the best for Latin America and the Caribbean, with many countries expected to see much larger contractions this year.

Universal Healthcare 

Abinader has become the first Latin American leader to be elected in the era of COVID-19, an issue close to voter minds who headed to polls with facemasks and social distancing in place just one day after the nation saw its highest single-day count of new cases. Officials reported 1,036 cases on Saturday.

In a policy briefing drafted before the pandemic, Abinader states that universal health care is guaranteed by the constitution and mandated in legislation, but governments have failed to make this a reality.

As such, the incoming leader has promised to create a single-level healthcare system instead of current healthcare plans that entail both a contributory and non-contributory (solidarity) element. 

The briefing also outlines plans to decentralize health infrastructure, creating micro health systems rolled out across the nation with budgets set per capita; establish state-managed town pharmacies; and build a “public-private hospital network that responds to the different levels of attention distributed in the territory.”

These plans involve an additional budget spend amounting to 0.5% of GDP in his first year in office, increasing to 3% of GDP by 2024. Since the policy briefing was written before the pandemic, there will likely be changes to the figures.

MSME financing and bank support

Another of Abinader’s policy pillars involves the refocus of lending institutions, including development banks, in providing support to micro enterprises and SMEs.

There will be a strong focus on developing a more robust MSME-based tourism industry and local community projects. 

This includes the creation of loan guarantee funds and mechanisms to help small businesses get these new guarantees to help grow their operations, as well as the creation of a development advisory office at every branch of state-owned bank Banreservas – the largest lender in the country by assets.

Other initiatives include developing MSME clusters, some of which will have an agri-business element; fostering cooperatives in strategic economic areas; rolling out financial education at a local level with a heavy emphasis on digital financial tools and technology development.

Broader macro policy under Abinader largely flows from the MSME mindset, stating in the document, “Regarding monetary, credit and exchange rate policy, it must guarantee that credit flows to the productive sectors: micro, small, medium and large, without abandoning the control of inflation and paying attention to job creation.

The policy guidelines also indicate a desire to strengthen ties with regional economic community CARICOM, including the development of a cooperation agenda for tourism, natural disasters, money laundering and illegal trafficking.