CNE – Centro Para Una Nueva Economía – Center for a New Economy
Non-profit, economic research and policy development organization
The scientific discovery of DNA by Francis Crick and James Watson in the mid 20th century has had profound implications that have not only transformed the world of science but also the way in which economic development is sought at the turn of the millennium.
El CNE, cumpliendo su función de centro de estudios no-partidista, ha preparado este documento para ayudar a los nuevos miembros del gobierno a identificar los asuntos mas importantes para el desarrollo económico de Puerto Rico en el corto y mediano plazo. Por lo tanto, a continuación presentamos un breve resumen de los riesgos que afectan el panorama económico a corto plazo, seguido por una agenda de varios asuntos económicos que, en nuestra opinión, ameritan la atención inmediata del gobierno.
El cuadro fiscal que enfrenta Puerto Rico ha forzado a la presente administración a tomar unas medidas difíciles, pero sumamente necesarias, para atender las exigencias presupuestarias que han puesto de relieve algunos de los problemas estructurales que demuestra la estructural fiscal de Puerto Rico. Aunque las explicaciones sobre cómo llegamos a esta situación varían, el repensar la vida social y económica es una tarea que se tornará constante para la gran mayoría de los ciudadanos.
The availability of high quality, reliable and cost efficient electric power is of strategic importance for the future economic development of Puerto Rico. This means that without access to relatively affordable and reliable electric power it will be extremely difficult, if not outright impossible, to promote sustained growth in basically any area of economic endeavor in Puerto Rico, be it in industrial biotechnology, retail commerce, small and medium enterprises, tourism or services because the cost of electric power is usually one of the top cost drivers in each of these industrial or commercial sectors.
Uncertainty is the order of the day in the economic sphere as we approach the midpoint of the year. First, the geopolitical situation remains extremely fluid.
In the 21st century, having access to a basic bank account has been compared to securing access to reliable “electricity, running water and telephone service.” Other commentators have gone further to declare that having access to financial services is “critical to success in the American economy.” Yet in 2002 in Puerto Rico, where we have one of the most advanced financial systems in the world, fully 36% of households did not have a checking or savings account.
A significant segment of the Puerto Rican population, 36%, is unbanked. These households tend to be extremely poor, with an average income of $8,472, and headed by older single unemployed females with a less than average education. Close to 50% of all unbanked households are located in the greater San Juan area. This lack of financial access precludes unbanked households from enjoying benefits associated with asset accumulation which exist in addition to the benefits conferred by the ability to defer consumption and creates a major obstacle for the implementation of asset-based policies to reduce poverty in Puerto Rico.
Puerto Rico has to overhaul its anti-poverty strategy, moving away from programs that create dependency towards programs that promote self- sufficiency. Current government welfare programs are particularly ill-designed for working poor families. Moreover, regressive excise and Social Security taxes are detrimental to low-income families trying to make ends meet. An Earned Income Tax Credit Program is a promising route towards improving the standard of living of Puerto Rico’s low-income working families.
