Luis Alberto Ferré Rangel, Chief Social Innovation Officer of Grupo Ferré Rangel, moderates one of yesterday's panels. (David Villafañe)

With an impassioned call for Puerto Ricans to resolve their own issues in the face of an increasingly insolvent federal government, the former U.S. undersecretary of the Army, Ambassador Joseph Westphal, delivered what was arguably the central theme in the panel titled “Effective Disaster Relief and Economic Restoration.”

The panel, held Saturday at the Condado Vanderbilt Hotel in San Juan as part of a two-day conference organized by the Wharton School of the University of Pennsylvania, and moderated by Luis Alberto Ferré Rangel, Chief Social Innovation Officer of GFR Media, centered on hurricane Maria—which struck Puerto Rico in October 2017 and still continues to define the island—and on reconstruction efforts that have relied on an influx in federal funding.

Although the U.S. government has assigned $41 billion to aid in reconstruction efforts on the island, only $5.3 billion has been disbursed, according to Puerto Rico Governor Ricardo Rossello. Most of these funds have been used on emergency work and to repair the island’s fragile electric grid, while only about $200 million has been allocated for permanent infrastructure repairs, he added during a talk held later that day. 

During the earlier panel, Westphal partly attributed the trickle in federal funding to the U.S. government’s own limitations. “We got a nearly $800-billion deficit and a national debt of $22 trillion,” he said. “There’s no more money from the federal government.”

Westphal also mentioned that, when he was Army undersecretary, he had a $250-billion budget under his purview. Most of the budget had been assigned to procurements, but he could not spend more than 30% of the budget in a given year. On the same token, “ FEMA is obligated a ton of money that Congress allocated just from Maria, but it has spent that little out of a really big obligation.” 

“Local communities and state governments have to address these vulnerabilities,” he added. “That means significant sacrifices, but it won’t be the federal government that’s going to come to the rescue. It’s up to Puerto Rico to resolve this issue.” 

Puerto Rico’s economic development secretary, Manuel Laboy, disagreed with Westphal’s remarks, stating that the federal government shared a measure of responsibility in the island’s crisis. “We need them on the table,” he said.

Laboy also said that Puerto Rico’s systemic problems have been around for decades, and that they had not been addressed until now due to lack of leadership and execution. “About 80% of the government platforms for the past three administrations is the same, so we’ve known what we need to do for a long time,” he added.

Rodrick Miller, CEO of Invest Puerto Rico, was also featured at the panel, and talked about the quasi-governmental organization’s strategy in luring offshore investors to the island. “To be able to sell Puerto Rico as a destination for companies, we have to shift our value proposition,” he said. “We need to change the narrative beyond sunny shores.”

Miller, who has overseen recovery efforts in places like Detroit and New Orleans right after hurricane Katrina, drew points of comparison between them and Puerto Rico, including a steady population decline and a lack of investment in key infrastructure. “The public sector cannot do this alone. It can play a lead role, but it needs the private sector to push it and ensure long-term continuity in development strategies,” he said.

Another panelist was Bibiana Ferraiuoli, executive director of the Ricky Martin Foundation, who detailed the recovery efforts that the nonprofit carried out in the critical weeks and months after hurricane Maria hit Puerto Rico. 

She stressed the importance of involving the local community in such efforts, like the time the nonprofit helped build several houses in deeply affected sectors of Loiza. “We talk often about budget-driven and design-driven projects, but we must talk more about community-driven,” she said. 

During the panel, the conversation also touched on what the future could bring, especially in terms of global warming and the effects it’s having on weather and rising sea levels. 

On that note, Howard Kuenreuther, director of Risk management at the University of Pennsylvania, raised the concept of “black swans”, which are low-probability events that turn into the high-probability kind almost instantaneously. “We have a set of biases that challenge us when we make decisions,” he explained. “We’re myopic, and we think a disaster is not going to happen, so we have inertia and unwillingness to change the status quo.”

The academic also called upon the Puerto Rican people to learn from past disasters, as Florida did when hurricane Andrew struck the state in 1992. “Florida had the worst building codes before Andrew, and now it has the best in the nation. It took the crisis of Andrew to get Florida to pay attention, and now the opportunity is raised for Puerto Rico,” he said. “It would be a shame to let this particular crisis go to waste.”

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