Danilo Medina was inaugurated yesterday as the new president of the Dominican Republic — with 10 million people, it’s the most populous country in the Caribbean after Cuba. 

A member of the ruling center-left Partido de la Liberación Dominicana (the Dominican Liberation Party), Medina won the presidential election with 51% in May over former president Hipólito Mejía.

Medina succeeds the popular Leonel Fernández, who served as president from 1996 to 2000 and who has served as president since 2004.

So what to look for as Medina takes power?

Primarily, there’s an issue of what role Fernández will play in the next four years.  Fernández is rumored to be eyeing yet another return as president in 2016 and his wife, Margarita Cedeño, was inaugurated as vice-president alongside Medina.  Medina served as a key adviser to Fernández until 2006, when Medina ran for president in his own right (and was defeated in an inter-party primary by Fernández, who thereafter won a second consecutive term in 2008).  To what extent will Medina serve as a placeholder for Fernández, and to what extent will Fernández, as the titular head of the PLD, be calling the shots in the Medina administration?

Medina’s key pledge has been to reduce poverty in a country where still one-third of Dominicans live at the poverty level.  Fernández and the PLD have presided over a strong economy for the past decade, and although the country’s GDP growth slowed in 2011 to 4.5% from the near double-digit growth of the mid-2000s, it remains a strong regional performer and the Caribbean’s largest economy.  Nonetheless, unemployment remains stubbornly high (around 15%) and Medina, a former economist, is facing a growing budget deficit (around 5% of GDP).

In his inaugural address yesterday, Medina announced that his administration would take up tax reform, education reform and a plan to end power deficiencies that have resulted in spotty access to electricity in the past.  He also announced the creating of a new ministry of energy and mines, as well as a “Solidarity Bank” to provide low-interest loans to poor families and housewives.

Although Fernández wooed much foreign investment to the Dominican Republic, the country is plagued with severe corruption in a region not exactly known for scrupulous transparency.  If Medina can reduce waste and other misspending of public funds, it would go a long way toward freeing up the cash to close the country’s deficit while also deploying more funds to anti-poverty programs.

Crime, too, is on the rise, as the displacement of Mexico’s drug war has affected Santo Domingo, nearly doubling the country’s murder rate in the past two years.

Dominican relations with Haiti, the nation with which it shares the island of Hispaniola, have never quite been good, but Medina was scheduled to meet with Haitian president Michel Martelly to discuss bilateral relations. Haitians and Haitian-Dominicans are treated somewhat like second-class citizens — for example, Fernández’s government tried to change nearly a century-long policy of granting citizenship to everyone born in the Dominican Republic, regardless of the status of their parents’ citizenship, which would have stripped many Dominican-born Haitians of their citizenship.