Emerging Markets: Tropical Paradox

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The D.R. is going to need dependable power to fulfill Fernández's vision of deploying information technology to leapfrog the country into future-friendly industries. It could not come soon enough. China's hot dragon breath vaporized 20,000 low-skilled jobs in recent years--about 10% of the total in the free-trade zone, necessitating a move up-market. Good telecommunications could make the country suitable for outsourcing, including call centers, but the D.R. is just beginning to train the legions of computer-savvy English speakers it needs to make a dent in swelling youth unemployment. Only 10% of students finish high school.

One key barometer of where the D.R. is headed: the upcoming trial of the six alleged masterminds of the so-called BANINTER (Banco Intercontinental) scandal, in which $2.5 billion was looted. For the first time, scions of some of the most élite families will be in the dock. It's a case expected to go to the D.R. Supreme Court, which has been the focus of recent U.S. efforts at judicial reform. The trial may be just as symbolic of the Dominican Republic's future as the new subway is. If the court's justice isn't perceived as fair, the D.R. will have a hard time slipping its banana-republic reputation, even though it will still have lovely beaches--and a subway.