A lack of a formal intervention protocol, such as the ones in place in the U.S. mainland for governments in distress, is making Puerto Rico’s restructuring process “uncomfortable” and more challenging to address, an expert with 25 years of experience in reforming troubled public and private sector entities said Wednesday.
Martha Kopacz, one of several speakers invited to a morning conference hosted by the Puerto Rico Builders Association, said as opposed to other cases of government restructurings — like Detroit for example — Puerto Rico lacks the rules and tools in existence for 40 years stateside to deal with such problems.
“On the U.S. mainland, there have been rules and tools in existence to deal with governments getting into financial troubles,” said Kopacz, who has been mentioned among the possible candidates to occupy a chair in the Fiscal Oversight Board created by the Puerto Rico Oversight, Management and Emergency Stabilization Act (PROMESA.)
“We don’t have that in Puerto Rico and that’s why it feels so uncomfortable here. PROMESA feels uncomfortable, and the lack of understanding of what a roadmap is, is very uncomfortable,” she said. “But, there’s a long history of intervention in times of government distress that, for the most part, works out pretty well.”
In both cases, the distressed jurisdictions share historical complexities. While in Detroit every discussion has to do with race relations, in Puerto Rico it’s about status, said Kopacz, who started coming to the island about a year ago to “learn and listen.”
Looking ahead, Kopacz suggested that Puerto Rico residents — political leaders and citizens in general — take a “time out” on status talks, “because it’s not helping stabilize and turn the ship in a way that will allow for economic growth and that causes people to not only want to stay in Puerto Rico, but also to want to come back.”
Furthermore, she suggested that elected political leaders make it their business to become partners with board members, to turn the government around and spur future economic growth. Success will also be predicated on transforming the government, including its structures and information technology systems to be able to achieve efficiency and effectiveness.
“Change has to become part of the culture. Change for our government entities has to be part of the dialogue and that is really going to be predicated on the skill and the will of your elected officials,” she said.
The constitution of an oversight board will bring about an “unprecedented transfer of decision-making powers and dynamics dating back to 1952, but unlike anything seen in recent decades,” said Samuel Céspedes, an attorney with McConnell Valdés, who .
However, the arrival of the board will also present a “great opportunity to put the house in order,” he said.
Part of that realignment could come through the efficient use and greater reliance on technology to improve processes.
Former Commonwealth Chief Information Officer, Giancarlo González said suggested the creation of the Puerto Rico Digital Service, with top-level talent, to streamline government data and procedures.
“We need to use e-government as an opportunity to reinvent government services, with a focus on responsiveness, user collaboration, and U.S. Digital Service best practices,” he said.
“This government has invested more $500 million in technology in the past four years in systems that really need to be broken down and started over from scratch,” he said.