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The Way to Foster Economic Development
Puerto Rico has a unique opportunity to take control of its future through the implementation of broad-based structural economic reforms. Economists have stressed for decades that Puerto Rico’s economic problems are of a structural nature. In the aftermath of hurricanes, earthquakes, and the COVID-19 pandemic, the priority must be to change the trajectory of Puerto Rico’s economy and provide its people with a more prosperous future. It is essential to eliminate barriers to economic development.
But what is economic development, and how can we achieve it? In the recent public debate, many have been using the term economic development rather loosely. Prioritizing economic development means very different things to different people, as does the Oversight Board's role in economic development. PROMESA has not given the Oversight Board the tools to implement an economic development plan. But the Certified Fiscal Plan, mandated under PROMESA, defines reforms that are necessary to foster sustainable economic development.
This essay discusses what is meant by economic development, and what are the main barriers to obtaining it, given the knowledge and resources we have at our disposal. It also stresses that Puerto Rico has had many economic development plans. Still, none have actually been implemented continuously throughout political administrations and goes over to emphasize how the Fiscal Plan's structural reforms may serve as the foundation for a long-term economic development strategy.
The Oversight Board has commissioned two reports to Estudios Técnicos, Inc., on two critical issues for economic development. The first report consists of an assessment of the current state of the economic statistics available on the island, along with specific recommendations on how to improve them. Without reliable economic data, developing long-term strategies is even more difficult. The second report consists of a bibliography of the numerous studies and economic development plans that have been presented for Puerto Rico.
Click below to read the full essay by Ricardo Fuentes, the Oversight Board's Economist and to access both reports.