Op-Ed: Compact for Puerto Rico

Written by  //  December 17, 2012  //  Biz Views  //  No comments

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Author José J. Villamil is Chairman of economic, market strategies and planning consulting firm Estudios Técnicos Inc. (Credit: © Mauricio Pascual)

Author José J. Villamil is Chairman of economic, market strategies and planning consulting firm Estudios Técnicos Inc. (Credit: © Mauricio Pascual)

Recently, and in view of the very serious challenges facing Puerto Rico, some analysts have called for a Compact among the various interest groups in society to agree on basic development issues. I fully agree with the need for what I would call a Compact for Puerto Rico (in Spanish, “Pacto por Puerto Rico”).

Different community groups, the private sector and labor unions have previously made calls for such a mechanism. Puerto Rico needs to act urgently to revert the very negative trends of the past decades, which is why the call for a compact is welcome. Unless we act decisively now, it may be too late.

In México the three main political parties recently agreed on a Pacto por México. In this compact there are agreements on education, natural resources, economic development, governance and many other key issues. Other countries in Latin America, notably Chile, have achieved similar agreements or compacts.

Compared with the debate on the “Fiscal Cliff” in the United States, and the very negative consequence that the bickering between Democrats and Republicans has had, the Pacto por México offers a lesson in democratic governance.

And in Puerto Rico? As mentioned above, since at least the 80s there have been calls for a Social Compact that would provide the basis for development initiatives and for their continuity. In various reports prepared for private sector organizations since then, the need for such a compact has been a priority. In 2003, in a report prepared for the Puerto Rico Chamber of Commerce and the Puerto Rico Manufacturers Association (“Hacia la Economía Posible”), the need for such a compact was highlighted.

When Atilano Cordero Badillo was president of the Marketing, Industry and Food Distribution Chamber’s (known as MIDA), the organization produced a document (“Diez Prioridades”) in which a Social Compact was the main priority. During the last decade a committee was created that brought together labor, government and private sector organizations. Its objective was precisely to secure agreement on basic development issues. Unfortunately it stopped meeting and disbanded.

In recent years and in presentations to various groups, I have argued for the need to move in a direction similar to Ireland’s “Social Partnership” or Finland’s “Social Partners,” a scheme similar to Ireland’s that contributed to making this small country one of the world’s most competitive nations. In Chile, where divisions are much deeper than they are in Puerto Rico, a broad consensus was achieved on key development issues.

There is absolutely no reason why in Puerto Rico we cannot move toward a “Pacto por Puerto Rico” in which the diverse interest groups and the political parties agree on short and long term solutions to our very serious economic and social problems and make the necessary commitments to solve them. We have been able to do so on specific issues, now we need to do so on broad development concerns.

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