The emergency plan announced by Governor Wanda Vázquez and the Oversight Board is the first step in trying to address the negative economic impact of the necessary controls implemented to fight the spread of COVID-19 in Puerto Rico.
The relief package, estimated at $787 million and which includes economic assistance and payment moratoriums, can bring some peace of mind to a significant sector that includes small and medium-sized businesses employees and thousands of citizens. Financial incentives for primary health care emergency response workers are also stand out in the package.
The initiative covers wage protection for 134,000 public employees, as well as a $500 bonus for some 170,000 self-employed citizens. The plan also includes extensions to pay for essential water and electricity services, as well as no fines for late payment of Sales and Use Tax by businesses, among others.
We believe that private sectors, such as banks, should be authorized to make the necessary adjustments regarding moratorium to loan payments and other business services with their customers, according to each institution´s particular situation.
The local government's plan has to direct a reasonable fiscal policy to mitigate the impact of the shutdown and other vital measures seeking to protect the population and that cannot be postponed given the advance of confirmed cases on the island.
Puerto Rico has been in a recession for more than a decade and is suffering from severe government insolvency aggravated by the 2017 hurricane season, as well as extreme natural phenomena such as last January's earthquakes. Therefore, we urgently need measures to mitigate the impact of the shutdown due to the COVID-19 emergency.
We hope that the federal Economic Stimulus plan contemplated by the White House for all U.S. states and territories could cover the particular needs of Puerto Rico and could represent a solid contribution to the plan announced by La Fortaleza.
Although this local plan is not an economic development package, but rather a package of contingency measures in the face of an extraordinary situation, it is important to see what it represents for small businesses, as well as municipal workers, among others in the short term. It is also necessary to look at its implementation so that relief reaches the proposed beneficiaries as soon as possible. Government bureaucracy should not become an obstacle at critical times.
In addition to the special assistance contemplated by the government, it is important that citizens watch their personal and family finances in the face of this emergency.
Meanwhile, it will be crucial for the Board and the economic team headed by the Department of Finance, the Fiscal Agency & Financial Advisory Authority, and the Department of Economic Development and Commerce, among other key components to keep good communication seeking sound fiscal and economic processes. Given the changing situation regarding the spread of the virus on the island, these measures will need to be constantly reviewed to determine any expansion or adjustments.
Prompt responses to this major health challenge, in light of our particular scenario, will contribute to overcoming it to quickly resume the restructuring and reconstruction plans leading to a more resilient Puerto Rico, with strengthened pillars that will ensure progress and sustainable economic growth.