Rosselló spells out economic development strategy
Gov.-elect Ricardo Rosselló on Tuesday offered details of the socioeconomic transformation model his administration will follow to spur “growth and development” for Puerto Rico over the next four years.
The model is based on “knowledge, innovation and technology. The time has come to show the world that Puerto Rico is open for business,” he said before a ballroom filled to capacity by Puerto Rico Chamber of Commerce members.
“We have to truly understand where we stand and how we can achieve a better situation guided by those principles,” he said.
He said it is fundamental to develop and economy that can add value and productivity.
“That’s always under discussion, but words sometimes stop making sense. But we have to find ways for the local investor to trust again and contribute to Puerto Rico’s development, as well as all of those who want to bring their capital to Puerto Rico,” he said, adding the strategy also calls for fighting for equality from the U.S. government.
Rosselló, who will take office on Jan. 2, said his administration will work to remove obstacles that the private sector faces on a daily basis so that the sector can create jobs and wealth for Puerto Rico.
“Burdensome tax rates are an obstacle for economic development. We have to be responsible, because although we want to reduce tax rates that has to go hand-in-hand with a reduction in government spending,” he said, adding that the next budget will reflect a 10 percent drop in public expenditures.
Regarding permits and bureaucracy, Rosselló told private-sector executives that his administration “will turn Puerto Rico into a place where they are not limited because they have to wait months or years for a permit.”
He also vowed to work with energy costs, expressing the need for a new model that will require investments, as well as mid- and long-term changes to create new collaborative structures with the private sector.
That strategy calls for establishing what he identified as “participatory public-private partnerships,” or P4s, which earmark a portion of the earnings to address a specific government problem, such as unfunded retirement systems or large projects. The P4s will open opportunities for local investors, individual developers or groups to take part in specific projects, he said.
The government offers 340 services, and “we have to question how many of those should remain in the government’s hands, and which can be delegated to the private sector, nonprofits, academia and municipalities.”
“We have to prove that making those changes are in the best interest of the Puerto Rican people. We have to give direction to a government that is structurally smaller, that better serves citizens,” he said.
The new administration’s blueprint also calls for easing certain labor laws to make Puerto Rico more competitive within the region. To achieve that, the governor-elect said he would establish a permanent work group where employers and members of the labor force can sit and identify initiatives that are mutually beneficial and can put Puerto Rico back on track toward greater competitiveness.
“We want to eliminate the bureaucratic scaffolding and over-regulation,” he said.
Rosselló said that the day after he won the Nov. 8 elections, Puerto Rico bonds generated $1.2 billion for the markets, which he attributed to legwork done over the past two years.
“Two years ago we said we were going to meet with the markets to share our plan. We have to validate the reasons why the market behaved that way, which is why I would like to talk to them about what our first 150 days will be like,” said Rosselló, adding he would be flying to New York later on Tuesday to meet with creditors and investors.
“We want to let them know of the fundamental change of direction for Puerot Rico. This is essential, at a time when world markets are very liquid, where municipal markets are extending credit to everybody who offer transparency. Puerto Rico decided at the worst time in history to close itself off to capital markets. It’s important to regain that credibility,” he said.
Finally, he said his administration will recognize the island’s fiscal situation and comply with all of the sustainability parameters, while working with the Financial Oversight and Management Board for Puerto Rico.
“We’ve developed a fiscal plan that we see as an economic development plan. If we address the fiscal crisis without a focus on fiscal reengineering, we won’t get far,” said Rosselló, who will be back on the island to meet with Board members during their meeting in Fajardo on Friday.
The Rosselló administration also has an agenda for Washington D.C., where it will go to discuss the availability of economic development components that can be granted to Puerto Rico.
“If Washington acknowledges that there is a fiscal emergency in Puerto Rico, that they have to do their part and evaluate what other boards have done, they will realize quickly that if the board we have lacks equal treatment given to other states, and lacks economic development tools, it will fail,” he warned, adding he and Resident Commissioner-elect Jenniffer González will pursue benefits during the first two Congressional sessions in 2017.
Rosselló to hit the ground running
The 38-year-old governor-elect said the day he is sworn-in, he will sign executive orders to get government initiatives going.
Among those are establishing an office to act as a hub for federal opportunities.
“We’re leaving between $1.6 billion and $1.8 billion on the table because we don’t compete. We have to create a separate structure where federal funds will arrive and can be managed separately to maximize that capital,” he said.
Another order will establish the “Puerto Rico Innovation and Technology Service,” a structure through which the government will hire experts to address the public sector’s specific technology-related problems. Similar structures have been set up stateside and in Great Britain, yielding positive results for government processes, he said.
His administration will also generate a number of bills to be submitted to lawmakers when they take office Jan. 9, Rosselló said.