Finding the right solutions to the complex economic, fiscal and infrastructure crises that Puerto Rico faces requires all those who have the authority to resolve it to locate themselves in their respective areas of responsibility with a view to recovery and sustainable economic development.
As the catastrophe left by Hurricane Maria, which dismantled the fiscal strategy for the Island, is addressed, Puerto Rico has to start over.
For the local government this entails equipping itself with a fiscal stability plan that gives way to the payment of public obligations that surpass the $ 70,000 million and also provides for the return to the stock market. It requires plans for reconstruction and long-term economic development as well.
The government of Puerto Rico, as well as the Board and the governmental authorities in Washington D.C. are the key to successfully crossing these recovery routes. The clear definition of the responsibilities and field of competence of each one will assist in the achievement of a joint strategy towards common goals.
The cycle of public hearings held by the Board and last Tuesday’s meeting of its members put on the table specific problems that merit corrective and sensible actions for the preparation of a new fiscal plan. In early February, the body intends to certify a new road map adjusted to the complexities that the hurricane added to the insolvency already faced by the central government and public corporations.
An essential element of the formula to move the Island towards growth is the federal assistance through funds for emergency recovery, and incentives that protect existing jobs while encouraging the creation of new positions.
Specific issues are the $ 94,000 million requested by the government to direct the works, as well as the resources to rebuild the infrastructure in order to revive economic activity. A formidable challenge is the dislocation of the industrial base and the income to the treasury that federal tax reform would bring, if a fair deal is not achieved in Congress for the jobs of US citizens on the Island.
That is why it is necessary for the Puerto Rican government to articulate its responses. Its current structure, huge and expensive, is unsustainable in today's Puerto Rico, with less population and less productive activity. The model must be transformed towards efficiency, an appropriate size and a strict fiscal discipline that closes the way to budget overdrafts and excessive indebtedness.
The body of reforms should also aim to eliminate persistent vagueness in government data. Those that arose during the Board meeting - the lack of certainty in the number of public employees receiving licenses or assets and the amount of accounts payable - delay the adequate planning of resources.
Likewise, the government must give way to capital partnerships with the private sector to start up projects that encourage the economy on a large scale.
The Board, for its part, must assume the task of strict supervision of reconstruction, emphasizing sustainable economic development. This is a role that the post hurricane situation has added to its responsibilities and that will enable the scrutiny of the federal government on the use of the $ 4.7 billion approved to provide liquidity to the government and those requested for reconstruction.
The mission that the government and the Board must jointly undertake is to seek a solid recovery in order to stops the massive exodus that is expected to worsen in the short term, the vertiginous unemployment that keeps rising, the strangulation of the already beaten private sector and, therefore, the numbers in red of the public coffers.
In brief, to achieve a fiscal plan that is a living document, the cornerstone of the recovery of public finances and the revitalization of the economy of the Island.
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