P.R. exploring its export potential through incentives, commercial missions
Local companies have the chance to expand their presense abroad, while taking advantage of government incentives to cover transportation costs. (Credit: © Mauricio Pascual)
Local companies with a desire to export their goods and services have the opportunity to participate in at least 15 commercial missions that the government has on its agenda for next year that could potentially generate more than $22 million in sales, Economic Development and Commerce Secretary José Pérez-Riera said Tuesday.
The push to find business abroad is part of the administration’s plans to turn Puerto Rico into an exports hub, whose success will depend greatly on the island’s bicultural and bilingual population, the education level and its strategic position as a bridge between Latin America and the U.S. mainland.
However, for that strategy to success, the island must first overcome a series of obstacles, including transportation costs and the difficulty small and mid-sized businesses have in obtaining financing. Companies also must learn to have a broader global vision, so they dare to export their goods and services off island.
“During the past two years we have been given the task of working with these obstacles that prevent us from increasing our exports,” Pérez-Riera said during the third edition of the government’s Economic Development and Commerce Summit held at the Sheraton Convention Center hotel Tuesday.
“To alleviate the obstacle of the high costs of transportation, we recently announced a new Special Incentive on Foreign Shipping through the Puerto Rico Industrial Development Co.,” he said, of the incentive announced earlier this month to help companies cover transportation expenses on goods shipped to Florida, Panamá and the Dominican Republic.
The four-year incentive program has set aside $3 million to reimburse companies 20 percent of their transportation costs the first year, 15 percent during the second and third year, and 10 percent during the final year.
In terms of financing for small and mid-sized businesses, the government has set forth a pair of strategies to address the problem. It has signed a collaborative agreement with the U.S. Import/Export Bank to offer financial guarantees and insurance to exporters. The administration has also launched the “Pymexporta” program through the Economic Development Bank to grant credit lines of between $50,000 and $750,000 to cover operational expenses.
“With all these measures I have mentioned, Puerto Rico is aligned with federal government’s National Export Initiative which aims to double U.S. exports by the end of 2014,” Pérez-Riera said.
In fiscal 2010, Puerto Rico’s exports reportedly grew by 7.2 percent, year-over-year, to more than $59.7 billion.
Thrusting P.R. into global arena
“We need to further integrate into the global economy for Puerto Rico to grow and for that growth to be sustainable. We recognize that much remains to be done,” he said. However, from the government’s standpoint, we are determined to provide our entrepreneurs with all the tools and support needed for exporting, and the initiatives just mentioned attest to that.
Part of that initiative involves the private sector, which will be represented in the recently constituted small and mid-sized business support and financing advisory council, made up mostly of banking executives who can help put up the money needed to export.
Mari Evelyn Rodríguez from Oriental Bank, Ginoris López-Lay from FirstBank, Aníbal González from Santander, Elí Sepúlveda from Banco Popular, José Díaz from Scotiabank, Pedro Javier Pérez from PYMES Financial and Migdalia Rosado from the Puerto Rico Manufacturing Extension, Inc. (PRiMEX), make up the advisory council.
“All of us who compose this advisory council firmly believe that Puerto Rico will get out of this recession and the success of our businesses depends on it,” said Rodríguez, who spoke on behalf of the council Tuesday. “The banking sector wants to lend, but we have to lend to profitable companies with successful business models so they can repay their obligations.”
