Election propels Dominican president to third term

SANTO DOMINGO (Reuters) - President Leonel Fernandez swept to a third term in the Dominican Republic, propelled back into office by what many see as his success in pulling the Caribbean country out of a deep economic slump.

With partial results giving the New York-raised lawyer and academic enough votes to avoid a runoff after Friday's election, Fernandez's main rival, real estate and construction magnate Miguel Vargas Maldonado of the center-left Dominican Revolutionary Party, conceded defeat.

"I accept and recognize the results of the elections," Vargas said in a speech at his campaign headquarters.

A triumphant Fernandez dedicated his victory to former President Juan Bosch, his leftist mentor who was elected in December 1962 but overthrown in a coup the following September.

The first-round win, he told cheering supporters, meant that "no time will be lost in the continuation of our work and progress."

The central elections board gave Fernandez of the centrist Dominican Liberation Party 53 percent of the vote, while Vargas of the center-left Dominican Revolutionary Party received 40 percent, after results from 99 percent of voting stations were tallied.

The rest of the vote was split among candidates of five tiny opposition parties.

Fernandez inherited a crumbling economy in 2004 when he became president for the second time. The collapse of a major bank in 2003 had sent inflation soaring, plunged the Dominican government deep into the red and provoked a sharp economic downturn.

With the help of loans from the International Monetary Fund, Fernandez managed to turn things around, although poverty remains widespread.

The election on Friday that catapulted Fernandez into his third term was marred by violence and accusations that his government dipped into the public purse to ensure it won enough votes for re-election.

More than a dozen people, including two ruling party officials, suffered gunshot wounds in the country, a leading Caribbean tourism destination once dominated by authoritarian rulers. And at least three, a former congressman among them, were shot and killed.

'DEMOCRATIC FIESTA'

But Fernandez, 54, who was first president from 1996 to 2000 before winning office again in 2004, told reporters after casting his own ballot in Santo Domingo that the voting was largely peaceful. "It's a democratic fiesta," he said.

Just under 6 million of the Dominican Republic's 9 million people were registered to vote.

The Dominican Republic is far wealthier than Haiti, its poor neighbor on the island of Hispaniola. But many Dominicans struggle to satisfy basic needs despite a tourism and real estate boom and economic growth that have made the country the envy of much of the Caribbean.

Fernandez had vowed to come up with a "social pact" to address poverty and expand government programs if he won. But coping with fallout from the stumbling U.S. economy and surging global oil, gas and food prices could soon take precedence.

One big challenge will be financing energy subsidies based on crude oil prices of $80 a barrel, given that oil now goes for more than $120 a barrel.

Eduardo Ganarra, a Latin American expert at Florida International University who works as an adviser to Fernandez, said there was no plan to slash energy subsidies despite their high cost.

"He (Fernandez) can't at this point think about cutting any subsidies without facing a serious social situation," said Gamarra.

"We're about to commit suicide because we're paying $4 at the pump in the U.S. and this is a poor country," said Gamarra, noting that gasoline prices in the Dominican Republic were already more than $5 per gallon.

(Additional reporting by Manuel Jimenez, Editing by Cynthia Osterman)