Tag: Puerto Rico Economic Pulse©

Migration is maybe one of the most dynamic components in any society. Inflows and outflows of people shape culture, ethnography, religion and the economy overall, and change in a short time what otherwise would take many years. Migration impinges on the foremost economic factor: human capital. Notwithstanding the importance of migratory movements, policymakers in Puerto Rico resist to give them the priority they deserve. In this issue we address this unknown side of our society. We will explore this world, the world of people coming to our island but also those Puerto Ricans who are looking for better luck in other lands. Find out how migration is shaping Puerto Rico’s present and future.

The 90’s were golden years for construction in PR. Investment in public infrastructure projects, a housing explosion, and a strong increase in commercial and industrial buildings by the private sector injected $16.6 billion in this economy. However, as big projects were near completion, the construction boom was over. For the first time in a decade, construction investment shrank, employment in the sector fell and housing, not government projects, took center stage as the driving force behind the industry. Today, as the Governor and the Legislature struggle to approve a new budget, this sector is finding ways to remain on the positive side. Find out how the new Network City can instill new vigor and reshape this industry in the near term.

Are high prices a mirage in Puerto Rico? Last year, inflation reached its highest level in PR since 1980. An adverse combination of external and internal factors is draining our pockets, and no truce appears in sight. Besides the problems posed by high prices, the PR Consumer Price Index (CPI) is quite flawed and barely can predict a trend in prices. Since 1993, inflation in PR and US are moving apart, a weird behavior that seems to defy economic laws and has left the PR economy without one of its foremost indicators. It is time to enter this fascinating and entangling world of inflation. Join us in this travel to learn how to deal with this puzzle and find a cure for this misbehaved index.

The same story as in 2002: the PR Government is short of money and is scratching all pockets across the island. Once again, the Government has decided to balance the fiscal equation by raising taxes. The authorities refuse to trim an already huge budget. The question still remaining is: will we eventually find a cure to the wounds of the public budget? In this issue, we address the other side of the equation and analyze the way the PR Government spends the taxes we pay and other resources. We will travel backwards in time to confront the real source of our fiscal woes.

Fiscal 2004 closed with the highest rate of growth since 2000. Although far from spectacular, the economy performed well with significant gains in many aspects. However, the happiness will not last too long since the economy is expected to decelerate slightly this year. The PR economy will operate in a global context featuring growth, but also a big uncertainty stemming from the island’s huge public debt, trade deficit in the mainland, and a battered dollar. The Puerto Rico economy will have to fight its way, through a structural deficit and new increases in taxes. Find out how the economy will perform through 2007, what setbacks it could face, and what will it take to overcome them.

The PR government faces an enormous challenge to keep expenses aligned with revenues. For decades, the government has provided more goods and services to citizens than it can afford, thus confronting a structural deficit. The need to co-govern finds a fertile ground with two party platforms calling for tax reductions and more efficient public services. In sum, PR needs to increase revenues and reduce expenses to avoid further damage. In the end, the real challenge is fiscal reform. This issue discusses how revenues can increase via two types of taxes: the Value Added Tax and the Sales Tax. We present the facts; you decide which system is better for you and PR.

After good behavior in the 90’s, the oil market has gotten wrathful again. Since the very beginning of this century, oil prices have bounced back to put more strain on an already fragile world economy. Wars and conflicts might end, but oil prices keep pointing towards the sky and rattling the nerves of consumers and producers. An importer of more than 80 million barrels a year, PR cannot disregard the ravages of oil. This issue reviews the turmoil in the oil market and its causes. We navigate through the vast grid of oil in the economy and analyze how fit is our economy to deal with soaring oil prices. Don’t miss this interesting journey across the black gold world.

Drug costs are the fastest growing part of Health Care spending in the US. This fact made drug prices one of the hot buttons in the 2004 election. Public opinion is charged against the pharmaceutical companies and voters are expecting changes over the next four years. The consensus? Patients, and particularly seniors, are paying too much for drugs, and prices need to go down. Reforms proposed? Some of these include re-importation from Canada, Medicare, and more flexibility for generic drugs. Find out about the issues discussed in the election debate, the proposed reforms, and what the PR pharmaceutical industry should expect in the near future.

Electoral times have never been short of new proposals. All parties bid for the best ideas on issues such as: education, health, and crime. However, one important issue remains untouched: how to reduce the size of government, the same government that doles jobs while squeezing the pockets of taxpayers; the same government that invests while swelling the public debt and is so powerful that no candidate dares to defy. This issue targets the almighty giant and provides insights on how to unravel this pernicious trap that entangles the whole society. Find out how we can tackle successfully a long postponed challenge.

The world is aging. By 2050, the population of seniors will triple, forcing nations to reform pension plans and invest large amounts to provide adequate living standards for the elderly. PR is not an exception. Over the next 20 years, we will need to make tough decisions that will impact our economy and competitiveness, if we want to provide seniors what they need and deserve. Are we getting ready for the upcoming seniors’ explosion? Will we fulfill our social responsibility of taking care of those that built the modern PR? It is time for action. This issue reviews the demographic transition that PR and the World are experiencing. Find out how this population trend will reshape our society for the 21st century.