Tag: Economy

Last February, Governor Calderón unveiled her Consolidated Budget for Fiscal Year 2003. It calls for significant increases on excise taxes on vehicles, alcoholic beverages, and cigarettes. All these measures will impact economic activity, you and I as taxpayers and consumers. Puerto Rico is not the only jurisdiction fighting budget deficits. According to a March report by the Association of State Budget Officers, 40 of the 50 states are facing shortfalls in their revenues. Thus, healthy fiscal budgets, here or in the states, will lag a year or more behind economic recovery. Find out how the budget is spent, where the money comes from, what are the priorities, and how the problem of debt financing has affected it.

Fiscal year 2001 marked the beginning of an economic slowdown in Puerto Rico. After a decade of high growth rates, the economy cast clear signs of decelerating. The performance of the Puerto Rico economy was not divorced from the US economic cycle. The Island posted the lowest real growth since 1992. But the worst was still to come. The tragic events of September 11 put both economies on the verge of recession, thereby backing the belief that the Island economy is tied to the US. Find out what happened in 2001 and whether the economy is in a recession in 2002? And, after all, is recovery ahead for 2003?

High quality health care is an important element of international competitiveness and economic well being. Dissatisfaction with existing health care systems has led to a worldwide movement for reform, and Puerto Rico has been no exception. However, managed care is no panacea. It is an experiment in progress, whose results must be judged carefully. Like other economies, Puerto Rico has been facing the urgent need to control costs of its health care system at a time when demand for health care services is rising. The answer to such a challenge has been the Health Care Reform Plan, established by the Government of Puerto Rico in 1993. Today, the Reform Plan faces a critical financial situation. Find out what the situation is, what are its perspectives, and what changes are needed to make it more feasible long-term.

On October 31, 2001 the U.S. Treasury gave traders in the fixed-income markets a Halloween surprise. It announced, without much warning that it would no longer auction 30-year bonds. Traders reacted with an historic buying binge of existing 30-year treasuries. In some ways the long bond`s demise was inevitable. It had been losing market influence throughout the latter part of the 1990s. While it is too early to gauge the ultimate impact of this seemingly dramatic change in the Treasury`s financing tool kit, many issues and questions arise for both the financial markets and the economy. Find out what led to the downfall of the king of the fixed-income markets and what the issues and implications might be for the economy.

For Puerto Rico, the year 2001 started with its first female governor, Sila M. Calderón. Her election focused on two key issues: government corruption and a new economic plan. The year ended as it started, with a legacy of economic problems ranging from economic slowdown, fiscal deficits, increasing unemployment, increasing costs of the Health Care Reform Plan, fewer jobs, and many plans and measures attempting to crank the economy. During the year, the terrorist attacks of September 11 struck a sour note throughout the world. The U.S. economy accelerated the cyclical slowdown that started back in March with a recession, moving to an outright contraction. Find out how top economic events shaped the PR economy in 2001. Can the PR economy resume growth? Will the Government be able to at least alleviate some of the key economic challenges the economy faces? These are some of the issues we face in the coming year.

During the past eight years Puerto Rico has invested $16.6 billion in infrastructure projects ranging from the SuperAqueduct, the Urban Train, major highways such as PR53 and start of Route 66. In September of 2000, then-Governor Pedro Roselló announced yet another megaproject: the transshipment Port of The Americas (PTA). It will be developed in the southern part of the Island, at an estimated cost of $700 million. Expectations call for a great economic boom to the South and PR as a whole. Is this likely? Puerto Rican taxpayers foot part of this bill. What do they get in return? Economic advantages? A mobile showcase promoting Puerto Rico`s ability to adopt technology and display productivity gains in all parts of the world? This issue examines what that economic impact could be and its potential to stimulate the Island economy.

The September 11th attacks were the last straw that broke the tenuous growth of the US economy at the time. Although a US recession could have happened even without the attacks, now it is unavoidable. The good news is that it is expected to be a short one, not more than two quarters. How will the Puerto Rico economy react? Is it unreal for the Island economy to escape the aftershocks of US and global recessions? As we saw in our August issue and prior to the attacks, the Island economy was already experiencing an economic slowdown. Discover what we view as the correct perspective to avoid a rush into panic resulting from a deepening of the downturn. Find out whether the economic and fiscal stimulus both in the US and PR can pull through.

American life came to a near standstill on September 11, 2001 when terrorists crashed three passenger planes into the World Trade Center and the Pentagon. The disaster cast a war time mentality over the US economy and on through other economies in the rest of the globe. Find out how the difficult campaign in Afghanistan, persistent warnings of new terrorist attacks, and the growing scare over Anthrax have plunged the US and the world into an uncertain new era. While the immediate consequences for directly impacted industries such as travel, tourism, and insurance are clear, the broader economic fallout over the next several quarters and over the next few years remains cloudy. Let`s examine how extensive is the impact of the above events on 2002 and intermediate growth for the US economy.

For the seventh consecutive time this year, the Federal Reserve has cut interest rates hoping that an easing in monetary policy could prevent the US economy from a recession. But the sharp slowdown in the US economy has already triggered a slowdown in the output of countries ranging from Latin America to Japan. Find out whether the Island economy is in a slowdown. How are companies and the consumer managing? If the US is in a `technical slump`, then what can we expect given the close relationship between the US and Puerto Rico`s economy? This issue analyzes what PR`s key monthly economic indicators are signaling in relation to the current pulse of the economy.

In the last issue, we presented a comparative analysis of what has been done in the field of R&D in Puerto Rico over the past several years, and the challenges that we still face today. The main challenge is how we can make Science and Technology influence the growth curve of our economy and improve its competitiveness. We have advanced somewhat in some areas, in others, such as education and our capacity for innovation there is still a lot to be done. As indicated before, Puerto Rico has the elements for success. The key here is how to build a critical mass and capabilities to achieve a new level of economic growth, to create a breakthrough from a dependent manufacturing economy to a self-sufficient industrial economy. The objective in this issue is what should be The Puerto Rico Solution.