José A. Moreno

The purpose of this chapter is to present considerations and reflections that might help in analyzing how the present world economic crisis affects small developing countries, especially the countries of the Caribbean region. The basic hypothesis underlying this chapter is taken from an analogy between the poor underdeveloped countries and the poor or marginal classes of the industrialized countries. Just as in the industrialized countries the present economic crisis has taken a social and economic toll principally among the less privileged classes, so have the poor, small countries in the world economic system been more harshly affected by the consequences of the international crisis. ¹ Furthermore, since the poorer and smaller countries are affected more profoundly by the economic crisis, and also lack adequate means of recovery, the crisis will be more lasting there, and will hinder the development process for a longer period.

The empirical basis of this research is supported by recent studies (on the Caribbean countries) undertaken by the U.N. Economic Commission on Latin America (CEPAL). ² I will use the case of the Dominican Republic as an illustration of the different aspects of the crisis that I wish to analyze. I am not attempting to generalize my analysis to other countries of the Caribbean since, given the great diversity of political and economic systems, such a broader scope would require a more systematic study than the present effort. ³

The islands of the Caribbean (excluding Trinidad and Tobago), although fertile for tropical agriculture, are generally poor in natural resources. The

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