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CHAPTER 36
Italian Investment
in the Modern Dominican Economy
By Arturo Martínez Moya
PUCMM Professor of Dominican Economics and Member of the Monetary Board
•
This chapter analyzes the historical contributions of Italian investment in the Dominican economy, beginning
in the last quarter of the nineteenth century and periodized by cycles, and examines trends in the gross domes-
tic product.
1
Years of Political Instability (1844 – 1869)
he nineteenth century was marked by profound changes on a global scale, particularly with regard
to technologies and the organization of companies and industries. In the Dominican Republic, the
transition from artisanal and agricultural activity to mass production occurred when steam and
electricity were incorporated into the manufacturing process. This took place during the Separation
from Haiti, when the supply of agricultural products was essentially earmarked for consumption by the coun-
try’s own population, and little was exported to the markets in the major Atlantic trading ports of Hamburg
or Bremen.
From the early years of the young republic, and in order to take full advantage of technological advances,
efforts were made to increase the population through policies that favored immigration but which prioritized
the entry of entrepreneurs with capital and who were well-versed in modern agricultural production methods
that could replace those inherited from the Haitian regime.
Between 1844 and 1848, President Pedro Santana ordered the distribution of state land to foreign im-
migrants who settled in the country, and in 1847 a decree was issued to grant each immigrant a parcel of
50 acres of public land, along with the corresponding property rights and exemption from any payment of
taxes and fees.
In addition, and for the exclusive application to commercial agricultural work, these immigrants were
exempted from military service in recognition that economic activities were conditioned by the frequent Hai-
tian army campaigns into Dominican territory, which forced the male population to stand ready at all times to
defend the young sovereign nation. As a result, the growth of the economy was limited to an average annual
rate of only 0.42% from 1844 to 1849.
It was not only the frequent campaigns of the Haitian army into Dominican territory that disrupted eco-
nomic activities—political turmoil also existed due to infighting among conservative leaders who were seek-
ing political power.
2
Nonetheless economic activity increased in the 1850s, with GDP growing at an average
annual rate of 1.08%.
During this time, the economy grew more than 250% compared to the previous five years, partly due to