New York Fed President John Williams urged Puerto Rico to leverage its natural, cultural and human resources to create a sustainable, strong, vibrant and prosperous economy for future generations.
During his two-day visit to Puerto Rico and the U.S. Virgin Islands — which fall under his agency’s jurisdiction — Williams participated in a conversation with Kenneth Rivera-Robles, president of the Puerto Rico Chamber of Commerce, about the New York Fed’s work in Puerto Rico and the outlook for the local economy.
The question-and-answer session took place before a roomful of Puerto Rico’s high-ranking politicians, economists, business leaders and executives.
“Even though this is my first time being on the island, we at the Fed have a lot of focus on the island,” he said. “What’s interesting is that the conversations have been a mix in terms of what’s happening regarding recovery and longer-term issues around debt sustainability, demographics and infrastructure.”
“The multi-cultural aspect, and the amazing cultural assets here are a good foundation but need to be developed. If you get the fundamentals right, the opportunities are enormous over the long-run,” said Williams, pinning Puerto Rico’s future growth opportunities on travel, leisure and hospitality.
On the human assets angle, Williams said one of the things the Fed has been focusing on is seeing how communities come together.
“How do we make sure that bankers, business leaders, political and government leaders and nonprofits come together to build strong, resilient communities? It’s not just about jobs, infrastructure or health, but about how all of these things come together,” he said.
Puerto Rico must work on building human capital with education and training and pairing the next generations with job skills for what will be in demand, he said.
“Workforce development is something we’re very focused on across the country because it’s one of the most important issues, but one of the hardest to address,” he said.
“We’ve seen changes in globalization and technology and a shift in skills and experience that people need to be successful and earn higher wages,” he said.
As the steward agency of the Community Reinvestment Act, Williams said one of the challenges is to develop successful programs between employers, educational institutions, government and businesses to see how they come together.
“We need employers at the table and need the people who are able to help provide those services and preparation there as well,” he said.
In the wake of the disaster cause by Hurricane María in 2017, Puerto Rico is now under the CRA zone for investing and lending into this area.
“So, we’re providing our function to bring people together to share best practices and get people geared up to take advantages of the opportunities here,” he said. “We’re bringing together the investors, borrowers and communities in a way that will make a major difference.”
But he said that Puerto Rico will first have to get to the point where it can provide “transparency and clarity” to business leaders and embark on a sustainable path that will work for the future to get those investments flowing.
“We’re not there yet. People who are looking at investing or working here have to be able to say there is a path forward that’s sustainable in terms of issues such as the government debt,” he said. “One thing that’s always true is that if you’re not sure about things like this, making long-term investments doesn’t happen.”