Mind the Rich-Poor Gap
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- Published on Monday, 22 March 2010 20:54
- Written by Todd Schweitzer
There are actually two Dominican Republics, and they bear little resemblance to one another.
One of them looks a lot like the U.S. These Dominicans live in high-rise condominiums in the city and houses in the suburbs. Their neighborhoods have great roads and reliable electricity and water. They drive to work. They order Papa John’s Pizza and watch HBO. They shop organic.
The other one looks like a poor, developing country. These Dominicans live in houses made of cinderblock, sheet metal, wood, or a combination of the three. If they live in the city, they travel to work by cramming seven people in shared taxis, normally an 80s-model Corolla. Their neighborhoods are without electricity for about twenty hours per day, and the water may be on for three days per week.
The Dominican Republic is a middle-income developing country: in terms of GDP per capita, it sits right in the center of the list. Yet this results from large poor and upper classes, not from a booming middle class. In fact, the DR has one of the greatest income inequalities in Latin America. The unequal distribution of income across the social classes contributes to a vicious cycle that is exacerbating the social tension in the country.
As I wrote in the last two posts, the DR is a pretty corrupt place. As a result, public goods—which benefit everyone but would benefit the poorer populations more—are distributed less effectively or not at all. Some illustrative examples within Santo Domingo:
Transport
For a city of over five million people, the government operates only about five bus lines and one metro line. For the vast majority of residents, they must use other options: unregulated, dilapidated buses and shared taxis that cost up to four times more than the public routes. Now if a poor city dweller only makes about five dollars a day, and spends two dollars a day on public transport, it creates a severe financial burden.
Water
The scarcity of water creates economic barriers and health hazards. Rather than taking a job, a resident may need to walk half an hour to the nearest well to fetch water, or wait around the house for the water to come back on. Trying to save water, people may not bathe or wash their hands properly. Food may not be washed thoroughly enough before eating. People might use water from a contaminated river or stream that runs through the neighborhood. If people get sick from the water or lack thereof, they can’t work, and if they can’t work, they can’t get out of poverty.
Electricity
The shortage of electricity has far-reaching consequences but is especially harmful for small businesses. Hair salons and barbershops cannot operate without electricity. Without refrigeration, food spoils. And so on. Businesses overcome electricity shortage by installing an inverter that runs off batteries, or using a generator. Yet these involve investments of thousands of dollars, out of reach for most micro-enterprises.
Basic Education
Despite being a middle-income country, the DR has one of the worst ratings for public education in the western hemisphere. The average instructional time at a public school is about three hours per day. Thus, public school students graduate barely literate and unequipped for any sort of professional career. Even if they come up with enough money to attend public university (equally awful, with some exceptions), they will not last long because they simply are not educated well enough to succeed in college.
Meanwhile, back in the other Dominican Republic, these issues are moot. Electricity and water are almost always available, and residents have water tanks, inverters, and generators hooked up just in case. Because the public transport options are atrocious (imagine yourself in a business suit cramming into a Corolla with 6 other people when it’s 90 degrees outside), the richer Dominicans have their own vehicles and otherwise take taxis. As for primary education, virtually all Dominicans with some disposable income will put their kids in private school.
There are at least two main consequences of the growing inequality. The first is increased corruption. I’ll discuss this more in a later post, but the basic idea is this: poor residents see that the government doesn’t provide public goods, so they try to make money from corruption as well. Many residents in the slums will help campaigns because they have been promised money, others literally sell their vote during the election. Also, poor government workers are more prone to engage in corruption in order to supplement their meager income.
The second consequence is violence. For many people living in the slums of Santo Domingo, they see no way out of poverty and thus resort to violence as a means of income. Street muggings, car-jackings, and burglaries in the rich neighborhoods are becoming increasingly common. I wouldn’t say yet that Santo Domingo is an unsafe city, but one should not ever walk alone after dark, and not be on the street at all late at night. Drivers are advised not to get out of the car after a fender bender because muggings have become so prevalent.
The issue of violence should be most alarming to the Dominican government. The DR’s main source of income by far is tourism: over 4 million people take vacation in the country each year, and violent crimes are not conducive to a tourism market. Sooner or later, the government will need to acknowledge that its visitors and richer citizens cannot continue to ignore the concerns of the poor.
