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Dominican Republic: Poverty Assessment: Achieving More Pro-Poor Growth

Dominican Republic FY06 PA

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The Dominican Republic experienced strong economic growth with improvements in the quality of life in the 1990s. Poverty declined from the early 1990s to 1998, albeit modestly, and there was important progress in social indicators that put the country on track to some of the Millennium Development Goals. Since then the country continued to experience impressive economic growth that started to decelerate in 2000 and ended up in a major financial and economic crisis. This report finds that poverty and the incomes of the poor saw virtually no improvements during the growth bonanza of 1997-2002 and that the 2002-2004 economic crisis brought a dramatic deterioration of real incomes and poverty levels. About 14-16 percent of the Dominican population (1.3 to 1.5 million) became poor and about 6-7 percent (500 to 700 thousand) fell in extreme poverty (incomes too low to afford the food basket of minimum caloric intake) in the last two years. In 2004, depending on the poverty line used, between 34 to 43 percent of the population were poor, of which from 12 to 16 percent were indigent. Income inequality remained unchanged over the last 7 years at a Gini coefficient of 0.52, the average for Latin America and the Caribbean (LAC), the most unequal region in the world.

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