The Government of Puerto Rico has agreed to pay the Boston Consulting Group $3,177,000 to help it with its economic development plans during the 2014 fiscal year, which ends next June 30th.
The Department of Economic Development and Commerce is making the payments with funds from Puerto Rico’s Government Development Bank.
Last month, Commonwealth Economic Development and Commerce Secretary Alberto Baco Bague asserted that the territory’s economy would grow .2% during the year and 2.6% by Fiscal Year 2016. He said that the Boston Consulting Group had validated the projections.
Just a couple of weeks later, November 1st, Puerto Rico’s Planning Board corrected the estimate for this fiscal year, determining that the economy would actually shrink .8% this year.
Its estimate was close to that of leading private sector economists, who project continued economic decline of 1-2% in FY 2014.
The territory’s economy has been in recession since early 2006 with the exception of December 2011 through October 2012 — when the economy expanded a bare .1%.
The economic slide began a few years before 2006 as the rate of economic growth steadily dropped.
Further, the gap between incomes in the Commonwealth and in the States has gotten larger almost consistently for a third of a century.
The Boston Consulting Group is not the only company giving the Government of Puerto Rico economic advice. KPMG, which has an $890,000 contract for this year to audit the Government’s books, has also been given a $1.95 million retainer to provide economic advice.
The administration of Governor Alejandro Garcia Padilla (“Commonwealth” party) also says that its Boston Consulting Group-blessed economic plans include creating 50,000 jobs by July 1, 2014, 90,000 by January 1, 2016, and 130,000 by January 12, 2018 (presuming Garcia is re-elected in 2016).
During his campaign for a first term beginning at the start of this year, Garcia pledged to bring the 50,000 jobs to the territory by July 1, 2014. It was a major feature of his campaign because of Puerto Rico’s job loss since 2006.
Last week, the Governor claimed that he was more than halfway towards meeting the goal, with 25,256 jobs created, a contention consistent with job creation assertions made by Baco and other officials of his administration.
The boasts do not factor in jobs lost during the Garcia Administration, however, and this number exceeds the number of jobs created. Overall, as of September, Puerto Rico had lost about 15,000 jobs since Garcia became Governor with nearly 40,000 eliminated along with the 25,000 plus claimed to have been created. So, the Administration’s job creation claims are really meaningless.