Oversight Board to focus on economic development proposals

A recent development in the push to resolve the Puerto Rican debt crisis comes as the Fiscal Management & Oversight Board heard economic development proposals at its sixth public hearing on March 31. The Oversight Board has been previously criticized for making huge budgetary cuts without making a clear plan for economic development to generate new revenue, in order to prevent a future crisis. It seems the board has heard these critiques as it will now hear proposals on the issue.

The government of Puerto Rico has had little effect on the decisions of the Oversight Board. The board initially rejected Governor Ricardo Rossello’s already strict fiscal plan for the island, in favor or one with greater cuts. The oversight board has requested that the government cut spending by $3 billion. It proposes to enforce strict austerity measures in order to reach this extreme goal. The cuts come from a wide array of essential services such as health care, education, and the pension system. Commentators inside, and outside, of Puerto Rico are concerned that the Oversight Board is ignoring the the root issue of the debt crisis, and simply slashing the budget, which, ultimately, will hurt the citizens of Puerto Rico and create more problems in the future.

The hearing on March 31 seems to be the first twinkles of hope for Puerto Ricans. The meeting in San Juan heard plans for economic development proposals directly from Puerto Ricans. The board invited not only Governor Rossello to deliver a statement, but also Resident Commissioner Jennifer Gonzalez. The invitation also is extended to the economic advisors of the governor. The Chairman of the Oversight Board, Jose Carrion III recognized that, “the Board, in itself, doesn’t have an economic development strategy. This meeting plans to collect the input of multiple sources and sectors, in order to stimulate that much-needed conversation.”

While the public hearing could just be an attempt for the board to assuage fears and generate good will without making any real changes, the hearing gives hope that the board has heard the critiques and taken them to heart. Carrion has stated that the purpose of the meeting is to hear statements and ideas from a diverse selection of different sectors about the process of balancing austerity measures with economic development schemes. If the board decides to run with the ideas presented at the meeting, Puerto Rico may avoid being another example of a jurisdiction ruined by failed austerity measures, and instead become an example of how to balance austerity with economic development in order to fix and heal economic woes.

The Puerto Rican government is also hopeful that the meeting will mark a turning point in their participation in the plans of the Oversight Board.  Resident Commissioner Gonzalez said of the meeting that, “It is a board appointment over which the Government of Puerto Rico has no control. I hope that this helps foster communication.” The results of this public hearing will be worth following closely.