Redefining Reconstruction in Puerto Rico
By H. Calero Consulting Group Puerto Rico Economic Pulse© • • • 0 Comments

02/2020: Redefining Reconstruction in Puerto Rico

What happens when problems are never fully addressed
PR finds itself, once again, at a poignantly grave moment in its modern history. The situation is the result of at least four events that took place in the near past, the consequences of which continue to overlap until today. Each of these events has compounded the challenges produced by the others, feeding into a spiral of problems that has destroyed different layers of the Island’s socioeconomic and institutional fiber. To make matters more pressing, the current debt negotiations are, in effect, negotiations about the viability of PR’s future, not just the repayment of defaulted debt. Flimsy assumptions about the economy’s future may simply lead to further debt negotiations or even defaults down the road. A long-term permanent recovery will require sustainable economic fundamentals, otherwise, there will never be the necessary assurances to posit the type of investment that can trigger positive feedback loops of economic activity on the Island. Time is running out.

questions
By H. Calero Consulting Group Puerto Rico Compass© • • • 0 Comments

Q4/2019 At Year-end, Another Lackluster Quarter

Economic highlights of Q4-2019 economic indices for Puerto Rico
At yearend, the fourth-quarter economic lackluster performance of the PR economy in 2019 depicts weakness in construction, consumption, and more importantly, the leading index for the next quarter into the new year. Although the Banking index grew, its performance was not really due to extension of credit in areas where Puerto Rico desperately needs to rebuild. Instead, healthy net income in banking continued to depict increases in personal loans, including car loans. Overall, this mixed outturn reflects continued sluggish negative growth due to the combined effect of trickle down, limited disaster federal monies after Hurricane Maria; a less than convincing transition from former Governor Ricardo Rosello to the current administration of Governor Wanda Vazquez; and political uncertainty regarding the lack of US Government and President Trump’s trust in Puerto Rico’s competence to manage and disburse disaster funds effectively.

PR Needs to Be Rebuilt Once and For All
By H. Calero Consulting Group Puerto Rico Economic Pulse© • • 0 Comments

01/20 Puerto Rico Needs to Be Rebuilt Once and For All

January’s earthquake, if anything, marked a point of no return
Almost two and half years after the devastation caused by Hurricane Maria, PR faces yet another major reconstruction task, albeit this time, mostly constrained to its southern shores. The geographical limitation, however, does not make it any easier as the combination of unpreparedness, lack of any substantial domestic emergency funds and ongoing austerity measures creates a very real and dangerous scenario. Depending on federal approval for reconstruction funds is almost the same as depending on international aid for reconstruction and, in this sense, PR’s recovery looks a lot closer to El Salvador’s than the one that took place in Chile. Moreover, it is by now abundantly clear that we can ill afford another botched reconstruction effort as a second mass migration is likely to ensue. To avoid it, we will need investments that can trigger virtuous cycles of economic activity, not just short-term construction-related projects. Otherwise, we could remain stuck in our current predicament for a long time to come.