However, the decline in manufacturing production, to 40 points in the Purchasing Manager Index, is the largest decrease in the sector since the Puerto Rico Institute of Statistics started measuring in 2010.
This is revealing a warning cry that cannot fall on deaf ears. Contrary to a score of 50 or more points, which indicates that manufacturing is expanding, the sector has been more than six months with 40 points or less. It is the unequivocal sign of the severe contraction for an activity that in 2008 generated 101,000 jobs and 168,000 in 1995, its peak year. Twelve percent of unemployment on the Island is to be added to this scenario.
Faced with this reality, Puerto Rico has an enormous number of well-educated and skilled people to work in areas of manufacturing growth, such as research and technology.
For example, the pharmaceutical industry directly employs 18,000 people and represents 30 percent of the domestic product. Its members invested $ 58 billion in research and new products as recently as in 2015. The sector remained sound thanks to high-qualified human resources, since 75 percent of its staff has a university degree, and also making adjustments such as the search of niches to attend to small populations and chronic conditions.
Today, Puerto Rico supplies products to more than a hundred markets in other countries.
In the strength of these lines there is also a stop to one of biggest issues Puerto Rico is facing: the mass exodus of our people, many young adults of productive age. Only in the first three months of 2017 left the Island 65,000 people more than those who arrived. To retain them, we must follow the steps taken here and in Congress in order to reformulate incentives to this industry.
With the endorsement of the private sector, a bill has been submitted to Congress. It seeks to extend Section 199 of the federal Internal Revenue Code to companies based in the United States that operate on the Island. If the deduction of income from domestic production activities in Puerto Rico, that the measure contemplates, becomes permanent, it is estimated that the impact would be of $ 365 million for the Island in two years.
In this context, it is also imperative to seek the best place for Puerto Rico within the fiscal reform contemplated by the administration of President Donald Trump.
In the ten-year Fiscal Plan, we count on a scaffold to guide the steps of the Government towards the stability and recovery of its credit. But the implementation of a plan of economic development that allows the Island to take its place in the new economic trends, capitalizing the talent, the education and the bilingualism of our human capital, and the relation with the United States market has been left open.
That is where the economic incentives should focus. If the existing ones are refined and the next ones are granted based on their potential of return of investment - in employment and generation of economic activity -, they can again be the motor of the economic activity for which they were conceived.
The private sector natural interest for growth should converge with that of the Government to develop the economy and emerge from the crisis. Manufacturing is in a common ground for both. That is why efforts should be made to regain its historical role in the economy.
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