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(Gerald López Cepero)

The problem could be described as that faced by a basketball team that cannot see when the game is over or where the lines that mark the court limits are.

Without accurate, reliable and updated data, the administration of a company or a government agency is limited to an administrator’s intuition, explained Arnaldo Cruz, spokesperson for the organization “Abre Puerto Rico”, which promotes government transparency.

 "And that is where many of the mistakes are made," explained Cruz.

Puerto Rico faces a deep and extensive fiscal crisis, with a serious institutional problem in the production and management of statistics data.

For example, macroeconomic data used in Puerto Rico follows a methodology that has just turned 50 and is basically obsolete, said Mario Marazzi, executive director of the Statistics Institute.  

"It is outdated. When the United Nations shows Puerto Rico statistics data, they explain that we define the economy as it was done in 1968. It is like measuring the economy using a Twentieth- Century dictionary," said Marazzi.

"This is not the fault of one government or another; it goes beyond administrations. For example, many countries no longer use gross national product as an indicator (of economic activity), they use but gross national income," he added.

At first glance, it might seem like an entirely technical or abstract matter. However, t consequences may be concrete.

For example, the credibility problem that the government faces in the markets and before the federal government is due, partly, to the fact that Puerto Rico has not yet elaborated the financial statements for fiscal years 2016 and 2017.

Meanwhile, the 2015 financial statement, which was submitted just two months ago, has a special disclaimer from the firm KPMG, stating that they could not guarantee the veracity of the figures. 

To make things worse, these documents are too complicated, even for experts in tax issues. Anne O. Kruegger, former deputy managing director of the International Monetary Fund, for example, highlighted in a 2015 report on Puerto Rico that she had to do "jiu-jitsu" with the government's financial statements in order to calculate the fiscal deficit of the island.

On the other hand, in June, when the Secretary of Economic Development, Manuel Laboy, appeared before the Senate to promote the approval of the Incentives Code, it was learned that part of the analysis behind the bill was made with data from 2002 because the Planning Board had not updated the economic multipliers by industry.

Meanwhile, the lack of an inventory of government’s properties and the government entity with primary responsibility on each asset, delayed the flow of federal aid in the reconstruction of Puerto Rico after Hurricane Maria on September 20. 

There are many reasons for this delay, that limit the ability of the government to make accurate decisions on public policy.

Víctor Rivera Hernández, former Secretary of Labor and professor of Public Administration, estimated that many government administrations simply did not prioritize the updating of information systems, especially in the last two decades, when technology has revolutionized the processes. 

Economist Antonio Fernós Sagebien considers that there is, partly, a political resistance behind this backlog. "As long as you have a tool to measure incompetence, incompetents will eliminate the metrics to avoid being discovered. It is a way to get rid of the evidence," he said.

There is also the hypothesis of ultra correction. Cruz explained that many officials insist that data should not be disclosed until they are "final" for allegedly avoiding criticisms or interpretations other than those given by any agency or government entity.

"Maybe that was that way 30 years ago, but not anymore. The government must be willing for other people to make different conclusions than the ones they make and that is legitimate in a democracy," said Cruz.  

Devaluation of information also joins the hypothesis. Economist José Caraballo Cueto illustrates the idea by recalling the argument that "you do not need more studies, you need execution".

"That is a myth that led to the devaluation of statistical information. That changes with the crisis, when data is vital for diagnoses on what happened, and that is when we begin to talk more about the problems with data that the government has," said Caraballo Cueto.

The problem goes beyond the coasts of Puerto Rico. For example, many of the data on agricultural, economic, and even government issues are prepared by federal agencies that exclude the island from its programs.

Marazzi, for example, stressed that, since 1982, Puerto Rico does not participate in the Government Census conducted every five years by the Census Bureau.

According to the recovery plan submitted by Governor Ricardo Rosselló Nevares before Congress, Puerto Rico is out of some programs of the Bureau of Labor Statistics, the Bureau of Justice, the Energy Information Administration, the National Center for Education Statistics, the National Center for Health Statistics and the federal Department of Agriculture.   

"The role of the federal government is important. The Government Census was recently being conducted and that produces a lot of statistics on governments, on their finances, structures, and so on. These data enables comparison. It helps a lot in the investment process, but Puerto Rico has not participated since 1982 and before that it participated regularly," said Marazzi.

"In my opinion, the macroeconomic area is the most critical one. Countries such as Dominican Republic, with a lower budget than Puerto Rico, measure the GDP (gross domestic product) quarterly and they measure informal economy regularly. Here, the GNP (gross national product) comes a year late and with a 'P' next to the number that says that the figure is preliminary, so it may change the following year," said Caraballo Cueto. 

"Here, when you talk about the informal economy, you speculate because you do not know how much it represents. No one knows if it is 10 percent, 20 percent, 15 percent of the economy. Labor statistics are another issue. I personally do not believe in them because surveys are conducted during the day, when people are working. Those are indicators that, in my opinion, have serious problems, and in a fiscal crisis like the one we have, these data are what we need the most in order to be able to diagnose the problems and solve them," added the economist.

Since 2011, they have been seeking to update measuring the Puerto Rican economy. However, due to technical and research issues, the process is not expected to be completed, at least, until 2020.

Government promotes improvements

At the administrative level, Raúl Maldonado Gautier, Chief of Staff, is working on a project that would update and interconnect the government accounting systems. For that purpose, the government had budgeted some $ 50 million, which were within the items administered by the Treasury Department. These funds, however, were reduced by half in the allocation scheme imposed by the Congress-appointed Board, that oversees the finances of Puerto Rico. 

The government also seeks to finance updating updates the management of public information with an investment of over $ 55 million, which is proposed in the reconstruction plan after Hurricane Maria.

 This document, submitted on Thursday before Congress, would address deficiencies in the "collection, analysis and display of data," including tax information, property registration, financial statements, government revenues and data on municipal licenses.

Similarly, part of the investment, which would exceed $ 55 million, would seek to develop efficiency indicators for the central government and municipal administrations.

Along with these statistical improvements and other data that the government currently receives regularly, some metrics would be applied to measure progress in the recovery of Puerto Rico.

Specifically, they seek that changes in working-age  population, the size of the workforce, the number of new businesses, hotel occupancy, access to health, and the percentage of people with university education, among other indicators, serve to measure the effectiveness of the recovery initiatives that would be implemented using with federal funds.

The recovery plan requires an investment of $ 139 billion. So far, the federal government has separated about 30 billion (22 percent of what was requested) for reconstruction.


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