The Dominican Republic (DR) forms part of the islands that make up Hispaniola, which is the second-largest island in the Caribbean after Cuba. Before the arrival of Europeans, the Hispaniola Island was inhabited by the Taino people and was divided into chiefdoms and territories. However, its discovery by Christopher Columbus in 1492 opened up the Caribbean region for European immigration, and this created the leeway for conquest by the Spanish and other European powers (Central Intelligence Agency, 2017). The conquest would subsequently lead not only to the birth of the DR but also resulted in far-reaching effects on culture and governance in the region. This paper will explore the political, legal, cultural and economic environments of the Dominican Republic with respect to international business.
Governance and politics in DR are anchored in the Constitution which was ratified in 1994.The Constitution provides for a unitary republic with the government formed through democratic and representative elections. The government is divided into the legislature, judiciary and the executive. The latter is headed by the president who is elected at general elections held after every four years and timed before two years after legislative elections. The president is head of state and commander-in-chief of the armed forces and head of police. He is eligible for reelection to such position only once after servicing one full term (Organization of American States, 2016).
The legislature arm is known as the Congress and is composed of the Senate and the Chamber of Deputies.30 members of the Senate are elected after every four years, and each represents the 29 provinces into which DR is divided plus the National District which is also considered a province in terms of representation. Each province is headed by a civil governor who is an appointee of the president (Organization of American States, 2017).
The Chamber of Deputies (CD) is also constituted through democratic elections held after every four years. Each member of the CD is supposed to represent a population of 50,000 people who are members of 146 semi-autonomous units. The subdivision is further extended into other units described as municipal districts, sections and hamlets (Meacham, 2013). The CD plays an integral role in crafting legislations alongside the senate.
Political Parties and Elections
The Dominican Republic is a multiparty democracy. List of political parties include the Dominican Liberation Party (headed by Leonel Fernandez Reyna); Dominican Revolutionary Party (led by Miguel Vargas Maldonado); Institutional Social Democratic Bloc; and the Modern Revolutionary Party (led by Andres Garcia).Other parties include the National Progressive Front (headed by Pelegrin Castillo) and the Social Christian Reformist Party led by Federico Antun (Central Intelligence Agency, 2017).It is important to note that recent politics in DR have been dominated by Dominican Revolutionary Party (DRP) and the Dominican Liberation Party(DLP). As such, most issues about elections revolve around these political entities.
As pointed out in the previous discussions, elections are held after four years, and it involves all persons at least 18 years. Members of the security forces do not participate in elections. The last presidential election was conducted in 2016 in which Danilo Medina Sanchez was reelected as president. The next elections will be held in four years' time which translates to the year 2020(Central Intelligence Agency, 2017).
Despite the substantial development in democratic space and values in DR, the current political climate suggests that possibilities of one-party rule in the future. Currently, the ruling party (PLD) controls the majority in Congress and National Council of Judiciary. Besides, the president heads the council. According to Meacham (2013), this form of organization has created room executive influence on most processes of governance which has, in turn, has made citizens resort to alternative avenues to resolve conflicts. This result is likely to affect not only the rule of law but also the stability of the island.
Overly, the stability of DRs democracy for the last 21 years shows that democracy is gaining strength in the country and each election offers the country to strengthen democratic institutions. For example, elections have been smooth and credible. However, the dominance PLD in representation may provide room for the executive to adopt an authoritarian type of leadership. Under such circumstances, dissent may not be tolerated, and this is likely to erode democratic institutions in near the future.
The Legal Environment
The Judiciary consists of the Supreme Court as the highest legal organ in the judicial system. Judges of the Supreme Court are appointed by National Council of the Judiciary which comprises the president of DR, president of the Supreme Court, leaders of the two chambers of the Congress and a representative from a non-governing party in the congress. It is composed of at least 16 judges who serve for seven years (Central Intelligence Agency, 2017). The Supreme Court extends its jurisdiction to hearing and deciding on motions of repeal and nullification of issues presented before the court. Besides, the court is mandated to resolve jurisdictional conflicts between lower courts and they also carry out proceedings related to extradition requests (Organization of American States, 2016).
The Constitutional Court is also an important institution in the judicial system and falls into the category of the Supreme Court. The court was established in 2010 and has 13 judges. The judges serve for a nine-year term which is not renewable. The court hears issues relating to the interpretation of the constitution. Other courts include the courts of the first instance; courts of appeal; justices of the peace, and special courts such labor, juvenile and land cases; and the Contentious Administrative Court which deals with cases that are filed against the government (Central Intelligence Agency, 2017).
The civil law system is a replica of the French civil code. These laws were amended in subsequent years borrowing some of the revisions from the Spanish law and this is characteristic of the current legal system (Central Intelligence Agency, 2017).It has been instrumental in arbitrating various civil issues since the promulgation of the new constitution in 1994.
Legal Issues in International Business
Laws prescribe certain behaviors that individuals and business organizations need to follow to fulfill their mandate. Like other democracies around, DR has norms, values, expectations, and beliefs in regard to business activities.
The Dominican legal system is structured in a way that exposes its independence to political manipulation. The fact that the president sits on the council that appoints judges and magistrates has resulted in a lot of interference of judicial processes from the executive arm of the government. This means that judicial officers tend to make decisions that sit well with the whims of the executive (US State Government, 2015; Central Intelligence Agency, 2017). The problem has been aggravated by the rise of single-party power. As Meacham (2013) indicates, the dominance of PLD and presidential power in DRs public affairs poses a threat to the democratic institutions of the country.
Corruption also plagues DR. Bribery, corruption and money laundering characterize the public sector (Meacham, 2013).The DR remains one of the most corrupt nations in the world with corruption index ranking it position 120/176 in 2016(Transparency International, 2016). This negatively affects international businesses in the sense that foreign companies are forced to bribe public officials to secure lucrative government contracts. For example, Brazilian firm Odebrecht has been found to have paid well over 3 billion Dominican pesos to civil servants in DR to secure a multi-billion dollar contract (Transparency International, 2016).Such events put the countrys investment prospects in disrepute.
The high levels of corruption in the public sector have affected the ease of doing business. Although the business environment encourages start-ups, the country is ranked position 103 out of 187 countries in the index of the ease of doing business. Worse still, DR is ranked position 82, 101 and 148 in registering property, access to credit and resolution of insolvency issues respectively (Doingbusiness, 2017). This can be attributed to corruption and political influences (Meacham, 2013; Doingbusiness, 2017) and other factors related to improper functioning of public institutions.
Spanish is the main language spoken in the DR. The language has evolved over the year to accommodate local dialects especially that of the Taino people who were the dominant ethnic group that resided on the Island before the arrival of the Spanish. French and English are taught in schools as secondary languages, but continued contacts between English-speaking societies such as the US has made the English language common among a section of Dominicans (Zuchora-Walsike, 2008; Culturecrossings, 2017).
A majority of Dominicans are of mixed race (a mixture of African, European and Taino races) and comprise of 75% of the population, around 10 % white (Europeans of Spanish and French descent) and 15% black Africans. There are small representations of Asians and other minorities such as Jewish (Zuchora-Walsike, 2008).
Christianity is the dominant religion in the island. Christians comprise of Roman Catholics (95%) and Protestant groups such as Evangelicals. Others include Spirits and Buddhists, among small groupings that result from immigration (Zuchora-Walsike, 2008). Each group is allowed to worship without restrictions from authorities.
The family is the basic social unit among Dominicans. Family members keep ties and often form relationships based business engagements. Business organizations succeed in Dominican society when family ties are involved(Zuchora-Walsike, 2008; Culturecrossings,2017).In the context of Hofstedes cultural dimension, they score highly compared to that of the United States when examined from the individualism- collective- dimension. In other words, Dominicans are more communal and relates with their kindred as opposed to the individualistic culture in American society.
Power distance of culture as a dimension of Hofstede can be used to illustrate the culture of Dominicans. The power index is high in the sense that Dominicans respect authority as hierarchy is well-defined. In business in negotiations, it is important to mind about relationships than outcome. Awareness of authority of the persons involved in negotiations is important as the society values and, therefore, can be said to higher on power distance index compared to that of Americans. Although questions may be raised in discussions, Dominicans hold that the decisions are made solely by those in authority, and such decisions should be respected. On the hand, American society power index is small, implying that authority can be openly questioned and criticized as part of a process to arrive at the best decision (Culturecrossings, 2017).
In communication, people maintain eye contact and honesty and humor are valued. People tend to be late for business meetings, but this is not considered a problem. In such environment, attendees are supposed to dress in long-sleeved shirts and tie for men and long skirt and fancy /toed shoes. Strict protocol is followed in meeting contributions. Gift giving is not expected in any situation (Culturecrossings, 2017).
In a nutshell, challenges of timekeeping, questioning of authority, and higher attention to relationships than business issues at negations may bring...
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