CNE – Centro Para Una Nueva Economía – Center for a New Economy
Non-profit, economic research and policy development organization
Four years since the enactment of PROMESA, the island of Puerto Rico is still grappling with nearly 15 years of economic contraction and a bankruptcy process that appears to have no end in sight. Making matters worse, just a year after PROMESA was signed into law, Puerto Rico was struck by not one but two devastating hurricanes in a span of 14 days.
On June 22, 2020, PREPA and the P3A entered into an agreement for the Operation and Maintenance of PREPA’s Transmission and Distribution System with LUMA Energy, LLC and LUMA Energy Servco, LLC. This policy brief analyzes important aspects of this agreement; highlights some risks associated with the performance of that agreement; identifies some serious concerns regarding the transaction; and offers some recommendations for its improvement.
The new executive orders enacted by the Government of Puerto Rico, which have allowed more businesses to begin operating after a long lockdown period, have once again raised concerns about the risks of exposure to the coronavirus. As a follow up to previous analyses we conducted on risk by occupations, we produced a new dashboard focused on Puerto Rico’s industrial sectors.
As discussions of “reopening” the Puerto Rican economy advance, we feel it’s important to consider which workers face greater risks of becoming infected with the coronavirus, given some particular attributes of their occupations. For example, because some occupations require constant person-to-person interactions, like dentists and flight attendants, and others only on occasion—think of sculptors and archivists—the risk of infection varies significantly depending on the kind of job you have and how you work.
CNE has developed the FPMCM Dashboard for users to query on trends regarding federal post-María contracting for reconstruction works in Puerto Rico.
Puerto Rico and its residents have experienced numerous crises and shocks in the last decades, including an economic depression dating back to 2006; a public debt crisis resulting in the largest municipal bankruptcy in U.S. history and a federally appointed fiscal oversight board pursuing deep budget cuts; a demographic crisis with population dropping by more than 600,000 residents since peaking at 3.8 million in 2004; and most recently, the devastation and cascading effects left by the hurricanes of 2017.
Puerto Rico’s protracted economic depression — and the draconian measures implemented to combat the resulting fiscal imbalances — have eroded the island’s government capacity to perform at all levels and created fertile ground for unscrupulous actors to engage in fraudulent behavior. Severe austerity programs implemented since 2006 have led to: drastic budget cuts in numerous key agencies, high employee turnover, low morale amongst public servants and limited resources across the board.
