The governmental initiative to create spaces for investment and economic activity for the private sector by way of Public-Private Participatory Partnerships (P4) has the potential to turn into an important vehicle to attract capital and create jobs, only if it is put into effect in an efficient and transparent manner.
The strategy to give the private sector a leading role in the Island’s economic reinvention will be the correct one, as long as it is directed at injecting money into public funds and guaranteeing the operation of several areas that must continue functioning, for the sake of quality of life and economic recovery.
The financial insufficiency ailing the public coffers makes it logical for the Government to rely on integration tools from the private sector, an alternative that has been successful in numerous countries, even in Puerto Rico. If these partnerships with the private sector were well run, they would represent important revenues for the economy.
Currently, the concept is validated in almost all the international forums on development, in the agendas of cooperation agencies, and even in the United Nations itself, through the Global Impact protocol. This embodies the recurrent idea that the entrepreneurial sector is a key player in the people’s social and economic stability.
Therefore, the fact that there are areas that have already been identified as candidates for partial privatization is a positive thing. In terms of the business sector and the investors, this will help establish guidelines on the direction that the Government is taking, and concerning the projects that would be available for investment.
Logically, first and foremost is the development of renewable energy sources. One of the first steps to get Puerto Rico out of the fiscal hole in which it is currently trapped is to transform the electric power generation and distribution system. This task consists of replacing the old and costly models based on fossil fuels with cleaner and more affordable energy sources, among other things.
Lowering the cost of electricity is one of the main conditions that the Oversight Board emphasized when they certified the Government's Fiscal Plan on March 13. No matter how good the initial expectations for the operations available to be executed through partnerships, the uncertainty about the cost of electricity is always a deterrent, an obstacle that must be overcome.
The Lottery, State-owned "paradores" (inns), public parking lots, and the State Insurance Fund Corporation are entities that perfectly fit in a binary management model, balancing both public and private interests.
In terms of the national parks, which could also benefit from a private capital and creativity injection, we have to process any partnerships with the utmost rigor, taking into consideration that, in a small Island, those parks are more than just another extension of forests or passive recreation. They are small lungs, filled with biodiversity, and they are also oftentimes archaeologically rich treasures.
Of course, every public-private partnership must be executed with the utmost transparency, and projects that entail the transfer of public workers to the private sector must be subjected to a healthy amount of oversight. The terms of the agreements must benefit the Island first.
We must give the P4s an opportunity, with the necessary clarity and rigor.
💬See 0 comments