The release of $ 1,5 billion reconstruction funds package through the Community Development Block Grant for Disaster Recovery Program (CDBG-DR) opens a great window of opportunity to boost the Puerto Rican economy, after a prolonged uncertainty due to the lack of resources to mitigate the damage caused by Hurricane María.
The occasion allows the local government to demonstrate its capacity to enforce strict controls on the use of funds. Accountability in funds management will guarantee the release of other much-needed disaster relief funds for energy, road and pluvial infrastructure.
The $ 1,5 billion allocation has a direct impact on the lives of thousands of vulnerable citizens and communities. Among others, the funds are for the reconstruction of single-family homes, as well as to the relocation of communities in high risk areas, in case of natural disaster.
Federal disbursements are included among the sources of income that would boost economic growth. To that end, the government has to demonstrate that it can comply, without delay, with technical information and studies requirements to direct different projects, according to federal regulations. It will be crucial for the island government to strengthen alliances with experts in engineering, mitigation and resources protection, among others, to improve the works.
In this critical period, state bureaucratic deficiencies that limit, for example, submitting an environmental impact statements or other permits have very negative results. Therefore, the moment calls to identify, at the state level, which experts or other resources are needed to streamline processes.
The release of the $ 1,5 billion in CDBG-DR funds for Puerto Rico will allow to invest in housing, to provide rental assistance and facilitate access to property titles. A global allocation of $ 20 billion for Puerto Rico was identified in this fund. However, there is no certainty about when the next release, estimated in $ 4 billion, will be done. These funds are intended for labor training investments, the creation of small business incubators and renewable loans for, among others.
The initial federal response to the disaster included funds for debris removal, installing blue tarps, food and water distribution, $ 1,2 billion increase in the Nutrition Assistance Program (NAP) and $ 300 million in subsidies for payroll.
Although not recurrent, these aids have been linked to slight economic upturns. The interruption of the flow of recovery funds may lead to an economic contraction.
Since federal funds immediately released after the hurricane, including PAN additional assistance, may run out in March, it becomes necessary to guarantee the prompt execution of the initiatives concerning the $ 1,5 billion release, announced by the United States Department of Housing and Urban Development (HUD).
In addition, it is up to the government to demonstrate the need for funds for other permanent infrastructure improvement programs, including school buildings. The reduction to $ 400 million in the $ 1,4 billion originally estimated for school repairs should encourage the government to document the needs in detail, seeking FEMA´s reconsideration.
Puerto Rico has to strengthen the foundations of a sustained recovery. The flow of newly released funds makes it possible to firmly direct reconstruction. The government´s efficient performance, in collaboration with the private sector and a strong labor force will allow to move forward the recovery that the island deserves.