Puerto Rico Economic Pulse ©

June 2003: The Hunt for a New Tax System

Excise taxes vs. a proposed sales tax for Puerto Rico

The story repeats itself: the government’s projections of tax revenues for this fiscal year have not materialized. Recent increases in excise taxes were not enough. The woes of the PR budget seem endless and a question still remains: how can we revamp our battered fiscal system. Although our tax system encompasses several taxes, we will concentrate on maybe its most questionable component, the excise tax system. In this issue we address the flaws of the excise tax and explore a sales tax and a value added tax as options. Find out what are the pros and cons of their implementation in Puerto Rico, fully aware that the last word has not been said yet and further analysis will be needed.

Puerto Rico Economic Pulse ©

May 2003: Is the Time Right for REITs in PR?

An investment tool that could cover shortfalls of fiscal revenues

Six months ago, the revenue shortfall in PR’s government budget was $41.2 million. Today, the potential fiscal deficit is $198.5 million for fiscal 2003. Is this because revenues were underestimated or because expenditures grew more than anticipated? The truth, as in most cases, lies somewhere in the middle. Find out the reasons and proposed measures to solve this challenging situation before fiscal 2003 ends. Increasing taxes may not be the right way, particularly taxes that affect the consumer who ends up paying them. Are there more creative ways than just raising taxes? REITs constitute a potential investment tool and a potential source of fiscal revenues.

Puerto Rico Economic Pulse ©

April 2003: Bringing Down Some Myths

The transformation of the Puerto Rico economy unveils new links

Puerto Rico’s economy is experiencing a transformation. Our bonds with the mainland are now stronger, but the nature of this long relationship is radically changing. The former ties with the US are being replaced by new and more sophisticated links, especially in the finance field.  Common but wrong beliefs about some sectors blur the comprehension of the economy. Understanding these changes is a necessary condition to design a long run economic plan. In this issue, we unveil some of these new features of the PR economy. This sheds new light on some apparently irreconcilable conflicts facing our economy.

Puerto Rico Economic Pulse ©

March 2003: Fast Forward: Can the economy hold?

A review of the PR economy in fiscal 2002 and forecast for 2003 to 2005

Fiscal year 2002 is gone but its awful saga is lasting more than expected and now, the war against Iraq is pounding further the world economy. September 11, a staggering stock market, and worldwide political unrest are the culprits of the slump. Puerto Rico posted negative GNP growth in 2002, the first since 1983. Find out which economic sectors were the winners and losers last year. What are the forecasts for fiscal 2003 to 2005? Will growth be positive or heading for negative territory? Will unemployment and inflation rise as the war drags on? Find out what crossroads the economy and you may be facing.

Puerto Rico Economic Pulse ©

February 2003: The Pharmaceutical Industry – Part II

Its contribution to innovation, education, and the environment in PR

In our previous issue, we explored how the pharmaceutical industry in Puerto Ricocontributed to the overall economy in terms of production, exports, investment, jobs, and compensation. This issue links the industry to innovation and technology as well as its contribution to the community and the environment. As before, these facts come from government published data as well as from a survey sponsored by the Pharmaceutical Industry Association (PIA) in PR. Find out how Puerto Rico is on the cutting edge of pharmaceutical production with the latest technologies, processes, and latest generation in drugs and why is the pharma industry heavily involved with higher education in Puerto Rico.

Puerto Rico Economic Pulse ©

January 2003: The Pharmaceutical Industry – Part I

Facts you didn’t know about the contribution of this industry to PR

The pharmaceutical industry has been in Puerto Rico for over three decades, in good and not so good times. Yet, in every instance, the industry has contributed to production, jobs, compensation, and technology. It is well known as one of the largest exporters on the Island. Check the facts of how the pharmaceutical industry has contributed to the economy, to human resources, to innovation and technology, and finally, its support to the community and the environment. This and the forthcoming issue of Economic Pulse highlight the contribution of a successful industry to the Island’s economy.

Puerto Rico Economic Pulse ©

December 2002: Coping with 2002

An analysis of Puerto Rico’s top economic news during the year

A tough year is ending. The saga of 2001, a year marked by terrorism and battered stock markets, has lasted more than expected. PR’s economy has not been indifferent to a jolted US economy and a phantom of recession and deflation hanging all over the world.It has been a hard year for the island, featuring higher excise taxes, less tourists, higher unemployment, and a great effort by the government to crank the economy by investing in public infrastructure. Find out what were the foremost developments of this year, what happened to important sectors, such as manufacturing and construction, and a search for a vision for the next decades.

Puerto Rico Economic Pulse ©

November 2002: Our Older Puerto Ricans – Part II

On the economic and social implications of an older population

As in other parts of the world, Puerto Rico’s population is growing older. Dramatic structural changes in population pose a big challenge to the public sector and overall society.  Social security programs, health services, public finances: the effects of these changes will touch every component of our society. In this issue, we focus on the evolution of the older segment of population, people aged over 65. We briefly portray our elderly people and analyze the implications of having an older population. Find out whether gender has an impact on this group; how wealthy or poor they are; who bears the burden of an aging population. Will PR be able to meet some of the challenges lying ahead.

Puerto Rico Economic Pulse ©

October 2002: PR Looks in the Mirror – Part I

On the most relevant findings of the 2000 Census of Population in PR

Conducting a Census is the best way to portray a country. It lets us know where we come from and where we are going, what we are and what we need. The 2000 Census of Population sheds light on the most important socioeconomic features of Puerto Rico, in some cases confirming already well known trends, but also disclosing unknown facts. Find out how age poses economic as well as social challenges; how demographics impact housing and car sales. This edition examines some of the most recent and relevant demographic issues Puerto Rico faces and their implications for the Island economy in the short as well as the long run.

Puerto Rico Economic Pulse ©

September 2002: How Can the US Economy Recover?

An analysis of US business fixed investment during the 1990’s

For the US economy, the booming 1990`s have gone and the ensuing short recession is now almost over. On the whole, analysts are persuaded that there is a strong causal link between business investment on information technology and labor productivity. The thinking is that cheaper computer capital replaced more relatively expensive non-computer capital to the extent that the production process allowed. Is that so? Have computers been the whole story of the 90`s investment expansion? And to what extent has business investment activity been quantitatively and qualitatively different from past cycles? Will investment drive the US recovery? Let`s examine these questions.