Dominican president looks set to win third term

SANTO DOMINGO (Reuters) - Dominican President Leonel Fernandez looks set to coast to his third term as voters pay tribute to what many see as his deft handling of the Caribbean nation's economy in Friday's general election.

Opinion polls heavily favor Fernandez and show voters shunning less erudite contenders, since he was proclaimed the candidate of his centrist Dominican Revolutionary Party in January and began a campaign for re-election.

The 54-year-old lawyer and academic, who was first president from 1996 to 2000 and won office again in 2004, needs to win at least 50 percent of the votes to avoid a runoff in the country of about 9 million people.

"I think you can confidently say that he is going to win in the first round," said Eduardo Gamarra, a Latin American expert at Florida International University who has worked as a consultant for Fernandez.

Fernandez, who grew up in New York City, has pledged to come up with a "social pact" to address poverty and expand the government's social programs if he wins re-election.

The Dominican Republic is far wealthier than its impoverished neighbor on the island of Hispaniola, Haiti, but many of its people still struggle to satisfy basic needs.

"He is going to be trying to complete the unfinished business from the term that he is concluding now," said Dan Erikson, a Caribbean expert at Inter-American Dialogue, a Washington-based think tank.

"The Dominican Republic still has to deal with facing ongoing social problems, inadequate education and health care for many people and also just the basic element of job creation," Erikson said.

Poverty reduction could take a back seat to crisis management and macroeconomic stability, however, just as it did in Fernandez's current term when he pulled the country out of an economic crisis triggered by the collapse of a leading bank in 2003.

"TIMES OF CRISIS"

A stumbling U.S. economy and surging global oil, natural gas and food prices are having a severe impact on a country heavily dependent on imports and trade with the United States.

"To me the main challenge will be economic and just managing the economy in times of crisis," Gamarra said.

"The real issue is going to be the barrel of oil as high as it is and the amount of money that the government will need to subsidize energy. That's going to be a major, major challenge."

To Fernandez's credit, government officials say the tourism-dependent economy has diversified and will attract a record $10 billion in foreign direct investment between next year and 2012, as key infrastructure projects kick off despite the current turmoil in global credit markets.

The country received a record $1.7 billion worth of foreign direct investment in 2007, even without any of the privatizations that had helped sustain levels above $1 billion a year since 2005.

But the Dominican Republic also has seen its oil import bill nearly triple in the past four years and tensions over rising prices could build quickly due to what Fernandez described as "a worldwide food and energy emergency."

Seven candidates are running for president in Friday's election. Miguel Vargas Maldonado of the center-left Dominican Revolutionary Party is seen as Fernandez's only real rival, however, and has consistently won less than 40 percent support in opinion polls.

Just under 6 million Dominicans are registered to vote.

(Writing by Tom Brown; Editing by Michael Christie and Bill Trott)