International Herald Tribune Editorial - Puerto Rico in distress
International Herald Tribune Editorial - Puerto Rico in distress
Copyright by The International Herald Tribune
Published: October 23, 2006
After decades of economic progress, Puerto Rico is struggling, and the mainland has both missed this horrific economic slide and contributed to it through benign neglect.
Poverty on the island is rampant. The per capita income is just about half that of the poorest state in the United States. Nearly one-third of the population was unemployed in 2000. And a good quarter of all employment is in government jobs. If the goal is more than survival, the bloated public payroll will need to be significantly pared back.
The bleak picture is set out in a long-overdue, exhaustive study - "The Economy of Puerto Rico: Restoring Growth" - from the Center for the New Economy, a nonpartisan Puerto Rican research group, and the Brookings Institution.
Much of the blame can be put on Washington, which has been tone deaf to the island's needs and has miscalculated where help was needed. Even a good idea, like the Section 936 program of tax incentives, was mismanaged. Before it was phased out last year, it had succeeded in bringing many pharmaceutical concerns to the island, but produced relatively few jobs and at so high a cost that a $40,000 position cost the government $70,000.
The study is spurring a debate over welfare and other social programs. Some of the economists' prescriptions are harsh, including curtailment of food stamps. But part of the mission seems to be shock therapy. That may work and might even help to get policy makers on the search for solutions.
The key to the island's future will be charting a direction that includes capitalizing on the island's open economy to create jobs for home- grown talent.
Copyright by The International Herald Tribune
Published: October 23, 2006
After decades of economic progress, Puerto Rico is struggling, and the mainland has both missed this horrific economic slide and contributed to it through benign neglect.
Poverty on the island is rampant. The per capita income is just about half that of the poorest state in the United States. Nearly one-third of the population was unemployed in 2000. And a good quarter of all employment is in government jobs. If the goal is more than survival, the bloated public payroll will need to be significantly pared back.
The bleak picture is set out in a long-overdue, exhaustive study - "The Economy of Puerto Rico: Restoring Growth" - from the Center for the New Economy, a nonpartisan Puerto Rican research group, and the Brookings Institution.
Much of the blame can be put on Washington, which has been tone deaf to the island's needs and has miscalculated where help was needed. Even a good idea, like the Section 936 program of tax incentives, was mismanaged. Before it was phased out last year, it had succeeded in bringing many pharmaceutical concerns to the island, but produced relatively few jobs and at so high a cost that a $40,000 position cost the government $70,000.
The study is spurring a debate over welfare and other social programs. Some of the economists' prescriptions are harsh, including curtailment of food stamps. But part of the mission seems to be shock therapy. That may work and might even help to get policy makers on the search for solutions.
The key to the island's future will be charting a direction that includes capitalizing on the island's open economy to create jobs for home- grown talent.
posted by Carlos T Mock @ 3:48 PM
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