Puerto Rico Compass ©

Q4 2012: Banking Sector Plays Key Role in Growth

An analysis of 4th Quarter 2012 economic indices

Government, both federal and local, recognized the importance of the financial system. Trillions of federal funds have been directed to financial bailout programs. Since the onset of the Great Recession in the US, we have increasingly heard that the financial system was one of the main causes of the crisis. Indeed, the financial sector plays a determinant role in economic growth. This also applies in Puerto Rico, which currently has 11 commercial banks. How do these banks impact the island economy? What has been their response to the ongoing 6-year recession? What are the main drivers of bank behavior? In response, what does the economy need from banks? After all, their lending activity impacts both consumer as well as business sectors. This Compass discusses some of these questions.

Puerto Rico Economic Pulse ©

December 2012: What if Puerto Rico Did Like Bilbao?

Lessons of an entrepreneurial planning process

In the past decades, the industrial decline of many western economies has forced them to turn towards the tertiary sector (services) in order to diversify their infrastructure and find new sources of income. The city of Bilbao, Spain has a history of both boom times with steel production and hard times with industrial decline starting in the 1970s. The city proceeded to reinvent itself through project-led regeneration programs, of which the Guggenheim Museum became iconic. Cultural policy was accompanied by a series of other urban regeneration strategies, dealing with economic and social aspects. Bilbao is a success story with this strategy. Despite the differences, Puerto Rico also had its manufacturing boom in the 80’s, followed by a decline in the 2000’s. Several strategies have been implemented to reboot the PR economy, but there is no success yet. PR can use entrepreneurial practices implemented in Bilbao. The question is: could a cultural-led approach be the recipe to restore growth in Puerto Rico?