Natalie Jaresko has announced her resignation as executive director of the Fiscal Oversight Board, after achieving significant progress in the mission to restructure Puerto Rico’s public finances. Particularly, the court´s confirmation of the central government’s Plan of Adjustment and the first balanced budget put the island on the right track to overcome its longstanding crisis.
The surprise announcement of Jaresko’s resignation, effective in April, by no means, represents the end of the island’s fiscal recovery efforts under the structure provided by the federal PROMESA Act. The Board and the Puerto Rico government still have much work to do to achieve government financial balance.
Por un lado, es menester poner en vigor las distintas disposiciones del Plan de Ajuste de la Deuda del gobierno central. Corresponde al ente supervisor y al gobierno local hacer posible la ejecución de la ruta fiscal certificada por la jueza federal Laura Taylor Swain, en justicia a todas las partes vinculadas al acuerdo.
On one hand, it is necessary to implement the different provisions of the central government’s Plan of Adjustment. The oversight entity and the local government must ensure the execution of the fiscal path certified by federal judge Laura Taylor Swain, justice to all parties involved in the agreement.
This implies, above all, keeping financial oversight and undertaking the reengineering of public management, both pillars of the fiscal roadmap. The current situation demands structural efficiency reforms that will provide the funds for salary justice with valuable government employees who perform vital jobs, such as teachers, police officers and firefighters.
The person who replaces Jaresko will have to work on the implementation of the Plan of Adjustment that goes into effect on March 15, just 16 days before the outgoing executive director leaves the Board. The new director will have to join the work to reach the remaining debt agreements, such as that of the Puerto Rico Electric Power Authority and the Highways and Transportation Authority, which Jaresko has promised to move forward before she leaves.
Power generation problems must be solved for Puerto Rico to reach a solid economic takeoff. Any solution to the disorder that has characterized this corporation in recent years must include a complete reorganization of its finances since its debt totals $9 billion. Here the Oversight Board´s negotiating skills will also be put to the test.
The presence of Jaresko, who for the last five years has been examining the nature of the claims and the arrangements that could provide a fairer way out of the chaos caused by corruption and waste in PREPA, has ensured that the process would flow.
Although the executive director plans to work on those negotiations until her last day in office, the person who replaces her will have to focus on swiftly and diligently analyzing the details of the proposed agreement.
Jaresko has worked hard in the new reality that Puerto Rico had to face since the passage of PROMES, the act that created a structure to move the island’s economic recovery forward - without creditors´ pressure - and to oversee government spending. She succeeded in a world of creditors and officials, mostly male, and many conflicting interests.
We are confident that the appointment of a new executive director who will continue to oversee the proper course of local finances, help restore Puerto Rico’s good name in the capital markets, and ensure Puerto Rico’s economic growth, putting the dignity and welfare of the people first, will not take long. The future of Puerto Rico depends on it.