July 13, 2016

Post-PROMESA Passage: Focus On Growing Puerto Rico’s Economy Emerges

Extending Tax Credits, Repealing Harmful Laws & Energy Diversification Lead The Way

Areas Of Promise Shown In Puerto Rico’s Economy:

According To A May Report, Some Sectors Of Puerto Rico’s Economy Are Still Growing. “Not all job sectors declined during May.  Trade, transportation, and utilities jobs increased by 900 combined.  Recreation and accommodation jobs increased by 500 … Puerto Rico’s technology and gaming industry, once a minor part of its economy, is beginning to grow.   Modernized agriculture will likely produce a more stable agricultural job market.  Puerto Rico’s job market has undoubtedly improved over the past months.  Yet the fact remains, the island’s population exodus and subsequent brain drain greatly temper any perceivably positive job market growth signs.” (Samuel Rosin, “Puerto Rico Unemployment Statistics Misrepresent Islands’ True Conditions,” Pasquines, 7/6/16)

Extending Earned Income Tax Credit “Would Bring Workers” And “Fight Poverty”:

“Extending The Earned Income Tax Credit To Puerto Rico Would Both Bring Workers Into The Fold And Fight Poverty.” “One of Puerto Rico’s biggest challenges is tapping and shrinking its informal economy, which may amount for as much as one-quarter of its gross national product.  Extending the Earned Income Tax Credit to Puerto Rico would both bring workers into the fold and fight poverty.  So would granting Puerto Rico the flexibility to provide earning supplements and job training to welfare recipients willing to take jobs in the formal sector.” (Editorial, “Congress’s Work With Puerto Rico Isn’t Done Yet,” Bloomberg, 7/1/16)

Jones Act Repeal Would Provide “Stimulus” To Puerto Rico’s Economy: 

Repeal Of The Jones Act Could “Provide An Immediate Stimulus To The Puerto Rican Economy.” “The Jones Act, passed in 1920, specifies that a ship carrying cargo between two American ports must be built in the U.S. and be 75% owned by American citizens.  The potential removal of Jones Act restrictions imposed on Puerto Rico by the U.S. could very well provide an immediate stimulus to the Puerto Rican economy.  The Jones Act constitutes a clear trade barrier, as Puerto Rico owns less than 100 ships able to comply with its regulations.  The act could potentially strengthen the Puerto Rico maritime industry and reduce costs on Puerto Rican made goods.  Jobs in manufacturing and trade related industries could soar, vastly diversifying the island’s economy.” (Samuel Rosin, “Puerto Rico Unemployment Statistics Misrepresent Islands’ True Conditions,” Pasquines, 7/6/16)

  • “If Congress wants to put the island’s economy on a more sustainable path, however, it will have to do more to help Puerto Rico help itself.  It might start by exempting Puerto Rico from the Jones Act, an onerous 1920 law requiring cargo shipped between points in the U.S. to be carried by ships that are built, owned and crewed by U.S. companies.  Not only does that make gas, food and other ‘imports’ from the mainland more expensive, but it also reduces Puerto Rico’s potential as a maritime hub.” (Editorial, “Congress’s Work With Puerto Rico Isn’t Done Yet,” Bloomberg, 7/1/16)

Energy Diversification On The Island “Could Provide Economic Benefits”:

According To Tom Sanzillo, Director Of Finance At The Institute For Energy Economics And Financial Analysis, Puerto Rico Diversifying Its Energy Source To Solar Could Provide Economic Benefits. “The irony in the Puerto Rico debt story is that the island is blessed with abundant sunshine, a resource that is all but ignored in the plan to switch the power authority from its current imported-oil-dependent grid to one tied almost completely to imported natural gas.  Indeed there is inexplicable and staunch institutional resistance in Puerto Rico to harnessing solar energy, which is now cost-competitive with traditional electricity-generation and spreading globally.” (Tom Sanzillo, “The Hidden Boogeyman In Puerto Rico’s Debt Crisis: Its Power Utility,” The Hill, 7/6/16)

  • Further Investment In Renewable Energy Could Help Economic Growth.“Meanwhile, a provision in the just-passed bill to fast-track newer power plants may lower energy costs, but it has also riled environmentalists.  Congress could make amends by supporting the island’s transition to natural gas and renewables, and pushing for the development of a cleaner Caribbean power grid – something that would also help undermine Venezuela’s noxious petro-diplomacy.” (Editorial, “Congress’s Work With Puerto Rico Isn’t Done Yet,” Bloomberg, 7/1/16)

Local Media Writes On “Boost[ing] The Island’s Economic Development”:

El Nuevo Día Editorial: “The Nation Needs To Identify The Leader Of The Team That Will Assemble Strategies To Boost The Island’s Economic Development.” “With the recent approval of the federal PROMESA Act, the agenda for Puerto Rico’s recovery has barely begun, which is why the nation needs to identify the leader of the team that will assemble strategies to boost the Island’s economic development.” (Editorial, “Editorial: Coordinating Economic Development Is Essential,” El Nuevo Día, 7/11/16)

  • “The mandate the people gave this government is not over, and neither is the hope for Puerto Rico’s restoration.  Therefore, it is essential to quickly appoint the leadership that will act as a link to the Board, a task that requires the highest level of transparency towards the new federal authority, creditors and the Puerto Rican people.  The efficient performance of this link will be instrumental in the success of the plan for Puerto Rico’s recovery.” (Editorial, “Editorial: Coordinating Economic Development Is Essential,” El Nuevo Día, 7/11/16)
  • “It is indispensable that, in the remaining months of the year, the footing of a solid agenda for Puerto Rico’s economic development is built and, within it, the proactive discussion of negotiations regarding obligations.” (Editorial, “Editorial: Coordinating Economic Development Is Essential,” El Nuevo Día, 7/11/16)
  • “It is time to act promptly in order to reorganize the fiscal team and fortify fiscal and economic recovery efforts, so that the new government may count on a structured path towards the country’s development and rehabilitation, in light of the new scenario the Board brings forth.” (Editorial, “Editorial: Coordinating Economic Development Is Essential,” El Nuevo Día, 7/11/16)