P.R. economists recommend 5 measures at the federal level to spur growth
The Puerto Rico Economists Association urged the implementation of at least five measures at the federal level that they consider essential to successfully overcome the island’s current economic crisis and spur economic growth in the long term.
These recommendations are based on the opinion of the majority of the economists who participated in the association’s surveys and the opinion of its Board of Directors.
The first recommendations are to eliminate maritime cabotage laws, as was done for the U.S. Virgin Islands, and air cabotage laws as was done in Alaska. These laws require that all commercial and passenger exchanges between the U.S. mainland and Puerto Rico be made exclusively on U.S. aircraft and ships, providing protection to these companies that may facilitate excessive profits.
Nearly 86 percent of local economists are against cabotage laws, the trade group confirmed.
“We have already made recommendations for the local government, but the federal government must address its responsibility to solve the structural problems that hinder recovery in the long term,” Association President José Caraballo-Cueto said.
“For example, maritime cabotage laws inflate the cost of living and the cost of doing business. Aerial cabotage limits tourism and the development of the aerospace niche,” he said. In the U.S. mainland there are many entities against these cabotage laws such as the Cato Institute.”
The third proposal is to grant parity in Medicare funds since workers in Puerto Rico pay it at a similar rate to the states but do not receive it in the same proportion.
The fourth recommendation is to include Puerto Rico in the tourist visa exemption program of the Mariana Islands and Guam, where tourists from certain countries in Asia and Europe can arrive without having to go through the process of applying for a tourist visa at U.S. consulates. Tourism grew significantly in those two territories after this exemption, the trade group stated.
The fifth proposal is that Puerto Rico be removed from the federal tax reform, which imposed a 13.1 percent tax on research and development by foreign controlled corporations in Puerto Rico. This affects the manufacturing base, which is considered important for countries at income levels like Puerto Rico’s, the group said.
The Economists Association will hold its annual convention on Aug. 31.