The Private Sector Coalition unveiled a strategic plan Wednesday that includes “concrete proposals” to draw attention to unattended sectors and make way for new development standards and job creation to stimulate the economy in the short and long term.
The proposals are the sequel to the economic development plan the PSC presented in 2009, which now emphasize the private sector’s need to insert itself squarely into the public policy thought process, said Francisco Rodríguez-Castro who founded the movement that groups 22 of the island’s largest trade organizations.
“Against the backdrop of a global recession that has dramatically affected the island and given the loss of jobs, which continues, Puerto Rico faces challenges that require us to take urgent measures to make development viable,” he said, noting the 2009 proposal resulted in the approval of several laws.
The new proposals include creating a permanent economic and social committee to “depoliticize, give greater participation and more influence to all sectors of society in formulating development strategies to address economic problems.”
“This committee would consist of people from the public and private sectors, and would be accountable for their work,” Rodríguez-Castro said.
Focus on job creation
To address the issue of job creation, the trade group will pitch the idea of implementing a tax credit for tax creation in line with the American Jobs Act.
“We can create a credit system of up to 25 percent for the creation of full-time jobs,” said Puerto Rico Products Association President Manuel Cidre. “The credit could be claimed on the tax return until 2013, which would allow the Government time to absorb the impact.”
Attention on job creation responds to the island’s 15 percent unemployment rate and the dwindling workforce, which barely reaches 40.3 percent.
“We have lost more than 200,000 jobs, 85 percent of which are from the private sector. It’s vital to create tools and incentives to prevent that Puerto Rican businesses are forced to lay off workers,” said Cidre.
On the subject of jobs, Chamber of Commerce President Salvador Calaf mentioned the third of more than a 12 proposals, which seeks to restore the work culture.
“Dependence has made it more profitable for many to live off of government aid than to work under conditions that do not provide them enough to live on,” Calaf said. “The low labor force participation results in one private-sector worker maintaining five other people. We have to change the focus of education from elementary school through college, to give students a vision of a work culture, so they grow up planning to create their own business.”
To spur job creation, the PSC proposes encouraging entrepreneurship through education programs that give way to ideas that generate micro businesses, as well as small, medium and large enterprises. They also propose allowing people to continue receiving government help as they transition into the workforce.PRMA Executive Vice President William Riefkohl (Credit: Carlos Anguita)
Revisiting knowledge economy proposal
Another point the PSC touched upon in its plan is revisiting the idea of migrating toward a knowledge economy, which Puerto Rico Manufacturers Association Executive Vice President William Riefkohl said is not a “government program, but rather an initiative that should integrate every component of society.
Other prongs of the comprehensive strategy are: implementing a tax and investment reform; modifying property taxes; creating multi-sector partnerships; following up on the energy reform; and restructuring public education by depoliticizing the system.
The PSC’s lofty goals also include: working toward a sustained economic growth rate of 4 percent; creating 360,000 new jobs and increasing the workforce participation rate to more than 55 percent; seeing to it that 25 percent of jobs are related to the knowledge economy; expanding the private sector to 85 percent of the workforce; closing the development gap to reach our competitor’s levels according to internationally accepted studies; and completely eliminating illiteracy.
The trade group will present its proposals to public and private sector leaders as well as the island’s political parties in coming weeks.