11/2018: A Plan with More Questions Than Answers

Opportunity Zones may just provide a much-needed response
The latest Federal Oversight Board’s (FOB) certified fiscal plan (October 2018) reveals a coherent, but dangerously limited understanding of PR’s present economic situation. In effect, it provides a one track-logic, based on reform and austerity measures, expected to yield the necessary cash flows to both repay the renegotiated public debt and achieve economic self-sustainability. Unfortunately, the problem is not so simple. Sustainable debt repayment requires a viable expansion of the Island’s tax base, which, in turn, requires long-term sustainability of economic activity. On a more fundamental level, the attainment of these goals requires economic development and growth. In this sense, the Opportunity Zones (OZ) initiative is a definite step in the right direction that could provide what the plan lacks. It remains to be seen however, particularly given PR’s dismal record of execution and operationalizing such initiatives, whether OZ can channel the investment capital that PR badly needs now.