Author: Sergio M. Marxuach

Puerto Rico’s Underdeveloped Private Sector

Professors Steven Davis and Luis Rivera Batiz, in an analysis conducted for their contribution to the book The Economy of Puerto Rico: Restoring Growth, published in 2006 by the Center for the New Economy and the Brookings Institution, found that a “truly striking feature of Puerto Rico’s economy is the underdeveloped state of its private sector”.  According to their analysis, private sector employment rates in Puerto Rico are less than half the U.S. rates in recent decades.

200,000 new jobs are good but…

200,000 new jobs are good but they are not sufficient to keep up with population growth. According to data from the Puerto Rico Planning Board, Puerto Rico’s civilian population 16 years and older increased from 2,788,000 in July 1999 to 3,068,000 in July 2009, a net increase of 280,000 persons, equivalent to an average of 28,000 persons per year.

El dilema fiscal

Al momento de escribir este post el jueves 24 de septiembre por la tarde nos encontramos en medio de la cuenta regresiva para el anuncio de despidos masivos en el sector gubernamental—una política que aun el Economist de Inglaterra considera como “unwise” en el medio de una recesión.

The Bankrupt Economy

In 1985 the Johns Hopkins University Press published a book by Richard Weisskoff entitled Factories and Food Stamps: The Puerto Rico Model of Development.  The book, as you can deduce from the title, is a withering critique of the Puerto Rican economic development model.

La Matemática Difícil de la Ley 7

Como es de conocimiento general, la ley 7 del 9 de marzo de 2009 requiere que el gobierno de Puerto Rico recorte los gastos operacionales, incluyendo nómina, con cargo al fondo general por la cantidad $2,000 millones durante el año fiscal en curso (2010).  Para lograr estos ahorros la ley 7 establece un proceso de tres fases.

CPR for a Flatlining Economy

Recently released economic data for Puerto Rico present a significantly deteriorating economic picture.  The Puerto Rico Labor Department reported that the unemployment rate for the month of July was 16.5%, the highest level in 16 years.  If we take into account the unemployed who are not looking for jobs, the so-called discouraged workers, and those who are underemployed, who desire to work full time but can only find part-time work, the island’s unemployment rate would probably approximate 25%.

Tocando Fondo

La Junta de Planificación anunció el viernes pasado que la reducción en el Produto Nacional Bruto para el Año Fiscal 2009 fue de 5.5%.  Esa contracción evidentemente fue más profunda de lo que se esperaba.  En nuestra opinión esto pone en duda la posibilidad de una recuperación rápida en Puerto Rico. 

The Risk of Permanent Stagnation

Recently there has been a lot of talk among U.S. economists about “green shoots” and “seeing the light at the end of the tunnel,” popular ways of saying that the worst of the current recession is over and growth will probably resume late this year or early 2010. In Puerto Rico, however, economic indicators continue to hover in negative territory.