Oversight Board hears abundance of ideas on how to fix Puerto Rico’s economy

by | Apr 11, 2017 | Economy, Headlines | Comments

On March 31, in San Juan, the Puerto Rico Fiscal Management & Oversight Board held its sixth public meeting. This public meeting was slightly different than those that came before it, in that it sought to address the lack of economic development measures included in the OB’s plans to deliver Puerto Rico from its debt crisis. The meeting was also unique as it was the first public meeting of the OB to be held in Puerto Rico’s capital city. The meeting lasted over 9 hours, during which a variety of speakers pitched their ideas, topics, problems, and projects to the board.

Speakers were invited from many different sectors of the economy including the private sector, the so called “third sector” (non-profits), and the government. There were presentations on the state of the performance of the economy, the islands’ migration patterns, and a recap of government actions taken to foster economic growth. Speakers including Ricardo Álvarez Díaz, President of the Builders Association of Puerto Rico, and Manuel J. Fernós, President of the Interamerican University of Puerto Rico, waited hours to speak in front of the board. Álvarez spoke on the previous limits imposed on the private sector by the government of Puerto Rico, and how these limitations would need to be modified so that the private sector can grow and prosper. Fernós focused on how businesses and the university system needed to work synchronously in order to better prepare students to stimulate economic development when they enter the private sector. He even proposed that businesses and universities work in tandem to promote research and development projects. Other topics that were discussed were how to promote and expand tourism revenue through market expansion, simplifying the corporate taxation system, and healthcare.

The “third sector” representatives talked about the struggles the economic crisis has caused for non-profits. Obviously, when people are having money problems donations to nonprofits drop, however, the organizations also face more nuanced problems. The government relies on many non-profits to carry out services that are usually carried out by the government. The government is supposed to give funds to the non-profits for these functions, but has been late on these payments leaving non-profits struggling to provide the services. The non-profits talked about various potential solutions to its income problems, such as appealing for federal funds, diversifying income sources, and appealing to the Puerto Rican diaspora for donations. The non-profits could relieve the pressure on the government to provide certain services, but only if they can get enough funding.

Governor Ricardo Rosselló was asked to present his ideas for economic development to the board. He has been determined to get US support for economic development projects in order to avoid the historical pitfalls associated with austerity measures. Rosselló’s plans include what are called P4 initiatives (Public-private participatory partnerships), welfare program reforms, as well as many regional and medium scale projects focusing on infrastructure initiatives. Some of these initiatives are the dredging of the Martín Peña Channel, improving the telecommunications transmission networks, and developing the highway between Hatillo and Aguadilla. Rosselló’s plans have been sent to the White House to be examined for possible governmental funding.

The meeting is a step in the right direction, however, much has to be done in order to see that these problems are solved and that the good ideas are acted upon. If the OB works in tandem with the different economic sectors of Puerto Rico, the government of the islands, and helps Puerto Rico to lobby for better support from Washington, Puerto Rico may avoid the downward spiral austerity measures can create. Yet, without the right amount of coordination, support, and follow-through, this meeting could potentially be just that, a meeting.