Economic Turmoil Island Wide

By Paola A. Sanchez Caro

 

 

The island of Puerto Rico is currently going through very serious economic circumstances. Due to its current financial state, big companies that once generated earnings to the island have now departed, many families have lost their jobs, thus their incomes, and because of lack of capital to pay the debts, the island’s state university, thus the education of thousands of students, is being put at risk.

Not only students, but employees under the University of Puerto Rico system are suffering the effects of the island’s unstable economy. Many have either lost their jobs or their weekly hours have been cut short.

“I am currently an employee under the UPR system and with all this economical instability that has been going on in this country, I have been really distressed. I am a mother of two and currently, the only one in my household with an income. If I were to lose my job due to our country’s financial problems, I would honestly not know what to do” declared Maritza Ortiz, a maintenance worker in the University of Puerto Rico at Mayaguez.

One particular quote I have heard one too many times these last couple of days, is the following: “The current generation is paying for mistakes done in the past”. Unfortunate but true, the above quote is a fact. Although many are blaming Puerto Rico’s current government for the financial state we are in, little do they know we are actually carrying out a debt from past administrations and past governmental authorities of this country; therefore the debt, (and its consequences), are now upon those who have nothing to do with the mismanaging of finance— the Puerto Rican youth.

How so are the young people in our country being affected by the current economic situation? Their education is being put on hold because of financial issues, thus uncertainty has taken over.

“I am a junior in the UPRM and sincerely I cannot afford the new implementation of the $800 stabilization fee as of January. Right now, I am basically hoping for the best and trying to find out how to get more grants to cover the cost of the new quota. In reference of Puerto Rico’s current financial situation, I am concerned with what the island’s future in general will turn out to be.” Jocelyn Agráz, a junior in the Business Administration department.

One of the peoples major concerns these days is the uncertainty when it comes to the stability of the economy of this island and what will the future bring. Many ask themselves, “Will we ever be debt-free again, ever?”

The Economy of Puerto Rico is one of the most diverse in the Caribbean region. Services and industrial production have surpassed agriculture as the primary focus of economic activity and income. Encouraged by duty-free access to the US and by tax incentives, United States firms have invested heavily in Puerto Rico since the 1950s. US minimum wage laws apply. Sugar
production has lost out to dairy production and other livestock products as the main source of income in the agricultural sector. Tourism has traditionally been an important source of income for the island, with estimated arrivals of nearly 5.9 million tourists in 2007.

According to Eduardo Kicinski, an Economist and Professor of Economics at the University of Puerto Rico at Mayaguez, there is a slight chance of, not necessarily becoming “debt-free” as a country in its entirety, but there is a possibility that our economy will become stable sometime soon again. “(In reference of the precise amount of time it would take for our economy to finally become stabilized) there is not an accurate prognosis; it is very difficult to say with certainty when our country’s economy will become stable again, but I would say give it a few years.”

On the words of Dr. Kicinski, there must be some changes or things that need to be done in a country, in order for the economy of the nation begin to ascend. Such changes may be the reduction of the size of the existing government, as well as a reduction in contributions or taxes.

Also the idea of simply creating native economic activities would generate inborn capital and would benefit ones country. “Not to mention, Puerto Rico’s agricultural resources. If we were to go back again to the cropping and to the plantings, Puerto Rico’s economy would definitely boost! ”

“If we were to take for instance, and copy the example of Argentina, that given to the country’s economic situation, returned to cultivation and now a great part of the country’s economy depend on agriculture, we would have more stability as to the financial matters of this island.” Dr. Kacinski added.

Apart from the aforesaid by Dr. Kacinski, we must not ignore the actual economic report of Puerto Rico in the year 2009 done by the actual Planning Board of the nation.

According to the Planning Board, the Gross National Product for Fiscal Year 2009 was of  5.5%. This casts doubt on the possibility of a quick recovery in Puerto Rico. For the Fiscal Year of 2010, the Planning Board is visualizing a V-shaped recovery where we will see a change from negative  5.5% to positive 0.7%.

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