Doing the work of promoting Puerto Rico beyond its shores is an important task, but the island must continue working on its structural issues so that it becomes a place where doing business works, said Ignacio Álvarez, CEO of Popular Inc. during a recent sit-down with the media.
“You can sell something, but if after I buy it, I’m disappointed, then that doesn’t work,” he said. “We have to continue working to make it an island with clear rules, where the government is attentive to the entrepreneur, where the entrepreneur sees that rules are stable and don’t change overnight. Where permits are obtained in a consistent manner. There is a lot of work that we have to do there still.”
He said there are opportunities to work and improve upon specific sectors, such as the visitor’s economy, manufacturing and even the cannabis industry.
“But for that we have to have a climate where energy is good and reliable, where roads are safe, where streetlights work and when people bring entrepreneurs to open their plants, their CEO’s say, ‘I want to live in Puerto Rico’,” he said.
“We have to develop an ecosystem where Puerto Rico represents an attractive investment site because you aren’t going to promote something If you aren’t ready to receive people and we’re still significantly lacking in that respect,” said Álvarez, during a conversation in which he took questions on a range of topics, including the role of the Financial Oversight and Management Board for Puerto Rico, and the importance of Acts 20 and 22.
While the Puerto Rico Tax Act 20, known as the “Export Services Act,” allows for a 4% fixed income tax rate on income related to export of services or goods, Act 22, also known as the “Act to Promote the Relocation of Investors to Puerto Rico,” fully exempts local taxes on all passive income generated by individuals that reside on the island.
“We’ve seen more people interested in Act 22, and the truth is many individuals have come to Puerto Rico, some contributing more than others,” he said. “However, exports are also important, and people should know that the law is not just for foreigners. We have to continue exporting, because that’s our future.”
As for the Oversight Board’s relationship with the government of Puerto Rico, Álvarez said they need to put an end to the public fights and begin cooperating more.
“The Board is a reality and I’m not going to speculate on whether it’s good, bad or different. It’s our reality and will continue to be our reality. So, we have to work to see what we can do so that it works better. The Board will continue to exist and there are no moves to eliminate it,” he said. “My opinion is that we must work to make it go away as soon as possible, but that requires doing what we have to do.”
As for the private-sector’s role, Álvarez said there is much skepticism toward the government, particularly when it comes to public policy, which is enacted when it’s convenient to the public sector.
“Obviously, we’ve reached a moment in history where the ideological role doesn’t really matter. The practical situation is that the government does not have the economic capacity, putting its administrative capacity aside, to solve all of the island’s problems. Those days are over, that no longer exists,” he said.