Heading into the election season, the White House is promoting data telling the story of Puerto Rico’s economic recovery and renewal. “Since 2021, the Biden-Harris Administration has been working at top speed to support Puerto Rico’s recovery and renewal,” announced a related press release “but, there is more to be done…and we are not stopping any time soon.”
A White House fact sheet on the subject from March 2024 says that “Puerto Rico’s economic turnaround has begun thanks to more than $140 billion in Federal obligations for the island supported by unprecedented whole-of-government partnerships through the Puerto Rico Economic Dialogue.”
The announcement highlights these points:
- Puerto Rico has added more than 100,000 new jobs. After a long slide downward since 2008, labor force participation in Puerto Rico is on the way up, and unemployment is under 6% after years of double-digit levels.
- 2023 marked the first year of positive net migration in this decade. That means that more people came to live in Puerto Rico than moved away from the Island.
- Investment in infrastructure has brought 7,800 more construction jobs to Puerto Rico since January 2021.
- FEMA is currently funding 2,725 projects under the umbrella of post-hurricane reconstruction, with 1,769 more in the procurement stage.
- The Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) provided funding for street and highway projects, flood control projects, and development of San Juan Harbor.
- Other agencies have initiated more innovative projects, from the Tech Hub to the Social Work training project to renovation of Roosevelt Roads.
- The American Rescue Plan included tax credits for Puerto Rican workers and families which were not previously available.
The input and investments from multiple federal agencies has opened myriad opportunities for the Island.
Infrastructure Assistance and the History of Economic Growth
The significant influx of federal funds after disasters like hurricanes and earthquakes has undoubtedly provided a shot in the arm for the economy. This money has funded infrastructure repairs, public services, and some temporary jobs. The service sector, particularly tourism and finance, is growing and competing with manufacturing as the main driver of the economy. This diversification can be a positive sign.
The Great Alaska Earthquake of 1964, just five years after Alaska became a state, marked the beginning of significant federal disaster relief for the new state. The federal funds that poured in provided crucial support for rebuilding damaged infrastructure like roads, bridges, ports, and public buildings. This improved transportation networks and facilitated economic activity.
The reconstruction efforts involved upgrading infrastructure, leading to more modern facilities and improved efficiency. This had long-term benefits for industries reliant on transportation and communication. The construction boom created jobs and boosted related industries like building materials and engineering services. Alaska, which had been severely impoverished as a territory and was just getting on its feet as a new state, got a definite jump-start for its economy from the disaster funds. The same could be true for Puerto Rico. Improved infrastructure and logistics could benefit all industries and open up new ones.
Alaska had to take on significant debt to match federal funds, though, which created a long-term financial burden. One of the factors that delayed Puerto Rico’s receipt of federal disaster assistance funds has been the inability to match federal funds.
Potential realized
Puerto Rico is responding to the economic upturn with entrepreneurial spirit. In areas where Puerto Rico has historically been strong, including biotechnology and medical supplies, local and multinational businesses are taking advantage of the new circumstances to accelerate growth. Agriculture is seeing a renaissance with farm-to-table initiatives.
Times continue to be hard for many people in Puerto Rico. Half the children live in poverty and 40% of the population faces food insecurity. But positive signs are visible. With wise planning and the opportunity to resolve the Island’s political status at last, steady increases in prosperity could be just around the corner.
