Puerto Rico’s economic landscape post-Hurricane María presents a new set of challenges and opportunities to reshape business operations and education going forward, to ensure the island does not collapse and fewer residents opt to leave in search for a better life elsewhere.
Those were just a few of the conclusions a number of prominent members of the private-sector and academia exposed during a conference at the Universidad del Turabo focused on opportunities to recover and rebuild Puerto Rico in the short-, medium- and long-term.
Puerto Rico, which had been battling the effects of a drawn-out economic downturn for more than a decade before María hit on Sept. 20, now has the chance to build upon “a change in paradigm that perhaps will lead to a rethinking of concepts where we had not had an opportunity to do so,” said Francisco Montalvo, coordinator of the Private Sector Coalition.
However, a lot of what will happen in coming months and years hinges on how the island will be considered within the tax reform being drawn up in Congress. As it stands, the tax code overhaul does not benefit Puerto Rico in competitive terms.
“After María, Puerto Rico has the opportunity to receive an economic boost from federal government agencies, as well as insurance companies that can fluctuate between $10 billion and $15 billion,” said Puerto Rico Manufacturers Association President Rodrigo Masses. “However, which will depend remains to be seen if that money will remain in Puerto Rico or will be reinvested, depending on what happens in Congress.”
The Tax Reform bill seeks to put a new levy on production by manufacturing companies operating outside the United States. As it stands, Puerto Rico has not been included within the United States, which could potentially mean losing as many as 250,000 jobs if the corporations determine that doing business on the island is no longer viable.
If the Tax Reform bill is signed into law and includes Puerto Rico as part of the U.S., then long-term reinvestments are a possibility, Masses said.
But “to the extent that we’re unable to keep these companies growing in Puerto Rico, while we make other provisions for other companies to establish themselves here, then Puerto Rico collapses,” said Masses, who as head of the PRMA has been heading lobbying efforts in Congress to get Puerto Rico included as part of the United States.
Other challenges Puerto Rico is facing is making sure that money being pumped into recovery efforts transitions into permanent fixes, as well as “closing the escape valve” on the wave of migration the hurricane unleashed over the past three months, Masses said.
Juan Carlos Sosa, dean of the Universidad del Turabo’s School of Business and Entrepreneurship — which hosted the conference — said the academic sector must also do its part to retain the island’s productive population.
Innovation and creating new enterprises are the strongest boosters for economic development, and Puerto Rico’s universities must develop models and strategies to position themselves as partners in the creation of a knowledge ecosystem, he said.
“We have to partner with industries or industrial clusters to create platforms to incubate new ideas,” he said.