Op-Ed: CNE’s open letter to Puerto Rico’s GDB
The lack of seriousness and responsibility reflected in the comments made by the president of the Government Development Bank of Puerto Rico are truly disturbing.
The GDB has traditionally been one of the few government institutions that had remained relatively insulated from the partisan politicking that infects government agencies on the island. Until now.
In their desperation to present an “optimistic” picture three weeks before the elections, they have come up with a debt indicator that no one else uses to say that Puerto Rico has the lowest per capita debt of the United States. (See analysis.)
In the best case, these expressions constitute gross negligence in the GDB president’s performance in his function as a reliable intermediary with the investment community and, in the worst case, borders on fraudulent.
I bet the GDB wouldn’t dare use that analysis and put it in writing in the Official Statement for the government of Puerto Rico’s upcoming bond issue.
The GDB’s overwhelming propaganda efforts to hide the facts are truly pathetic.
In a report dated January 26, 2011, Moody’s estimated that Puerto Rico had the highest per capita level of (1) public debt that depends on taxes for repayment and (2) public pension obligations.
If we conduct a similar analysis and calculate the combined debt (public debt + pensions) per employed person in Puerto Rico — who are the ones who will end up paying these obligations — the figure is in excess of $107,000 per worker.
This in an economy where the average annual salary, according to the U.S. Bureau of Labor Statistics, is $27,190.
That’s the truth. We gain nothing from hiding it.