CNE – Centro Para Una Nueva Economía – Center for a New Economy
Non-profit, economic research and policy development organization
The current economic situation, both locally and globally, is the most complicated the world has seen since the Great Depression. In the midst of all this complexity is it imperative that we see things as they really are in order to properly diagnose the situation and to prescribe the correct course of action.
Puerto Rico’s credit rating has been in the news recently. When the government of Puerto Rico or one of its agencies issues bonds, credit rating agencies, such as Moody’s Investors Service and Standard & Poor’s Rating Services, analyze various quantitative and qualitative factors that may affect the borrower’s ability and willingness to repay, including, but not limited to, the financial condition of the borrower, the prevailing economic conditions in the island, and the political environment at the time of going to the market.
Ever since the days of Adam Smith, economists have struggled to understand the process of economic growth. While this effort has produced a better understanding the determinants of growth, many puzzles remain unsolved.
In August of 2005, the Center for the New Economy published a research paper entitled “Restructuring the Puerto Rico Electricity Sector”. In that report we noted that the Puerto Rico Electric Power Authority suffered from various financial and operating inefficiencies that should be corrected as soon as possible.
In August of 2005, the Center for the New Economy (CNE) published a research paper entitled “Restructuring the Puerto Rico Electricity Sector”. In that report we noted that the Puerto Rico Electric Power Authority (PREPA) suffered from various financial and operating inefficiencies that should be corrected as soon as possible. In this update we find, unfortunately, that most of those deficiencies are still present three years later.
There has been a heated public debate recently regarding the Commonwealth’s General Fund budget for fiscal year 2008. This debate has concentrated, specifically, on the financing mechanism that will be used to plug the $1 billion gap between exprected revenues of $8.488 billion and budgeted expenditures of $9.488 billion.
According to data recently published by Bloomberg and the Bespoke Investment Group, the price of oil has risen 729.58 percent from its low on Nov. 19, 2001 to its closing high of $138.54 on June 6 of this year. As is often the case, there is no single factor that explains this phenomenon in its entirety by itself.
The work of democracy, ostensibly government in the name of the people, cannot be carried out behind the closed doors of proverbial smoke-filled roomes for it to be done properly. Without accountability and transparency, democracy rapidly devolves into either the tyranny of the majority or, perhaps worse, the tyranny of the minority.
