The Fernandez effect.

The Dominican Republic's economy has taken a sharp turn for the better since emerging from one of its worst crises in history in 2003. The current account balance, a measure of money flowing in and out of a country, jumped to a surplus of 6.3% of gross domestic product (GDP) in 2004, compared with a 3.7% deficit in 2002. That's thanks to a 10% hike in exports, a 16% increase in tourism revenues and a 12% boost in remittances. Imports fell 10%.

This speedy recovery has coincided with the re-election last August of President Leonel Fernandez, who launched economic measures such as fiscal reform that have generated extra government revenues equal to 1.0% of GDP.

"The government that took office in August 2004 moved quickly to implement policies, including a substantial fiscal adjustment, that led to significant improvement in macroeconomic indicators," Agustin Carstens, deputy managing director at the International Monetary Fund (IMF), a multilateral lending institution, said in a statement.

Satisfied with the results, the IMF last February approved a 28-month US$665 million standby credit facility for the Dominican Republic. The government tapped a first tranche of $79.8 million to raise global investor confidence in the country. In 2005, the economy is expected to grow 2.5%.