By Frank Fuentes, Emilio Fernandez and Alejandro Santos

August 3, 2023

The country leads Latin America in rapidly narrowing the income gap with the United States

Despite being one of Latin America’s poorest countries in the mid-1960s, the Dominican Republic has made remarkable progress in terms of income convergence.

Income convergence is typically measured by comparing the per capita income of a country to that of a more prosperous nation, often the United States. For the Dominican Republic, this ratio reached 32 percent in 2022, indicating that the country’s standard of living is approximately one-third that of the United States. This stands in contrast to Latin America as a whole, where the average standard of living is around one-quarter that of the United States.

With the right policies, the country has the potential to become an advanced economy in the next 40 years.    

Converging at “blue” speed

What is remarkable about the Dominican Republic’s progress is not just the level of convergence but also its speed compared to other countries in the region. By examining the average convergence velocity, or the rate of change in income convergence per decade, it is evident that the Dominican Republic has exhibited the highest average convergence velocity, or “blue shift,” in Latin America over the past 50 y