Puerto Rico was in a tough economic position before Hurricane Maria. Former Governor Alejandro Garcia Padilla had declared the territory’s enormous debt “unpayable” — the result of decades of borrowing more than the Island could hope to pay back. Nearly half the residents of Puerto Rico lived in poverty and the population was both dwindling and aging as working people left Puerto Rico for the mainland.
The hurricane was economically devastating. More than 80% of the island’s crops were destroyed, some 8,000 small businesses closed permanently, and unreliable electricity and water interfered with economic recovery for nearly a year.
But Puerto Rico is recovering, and a number of industries show promise.
Puerto Rico is a beautiful island, a tropical paradise, home of the only rainforest in the United States National Parks system, and well known for its music, food, arts, and friendly atmosphere.
Yet before the 2017 hurricane season Puerto Rico had just half the tourism income Hawaii has. Tourism fuels 25% of Hawaii’s economy but accounted for just 6% of Puerto Rico’s before the hurricane season. That is not only far less than Florida or Hawaii, but an extremely low number for the Caribbean, where tourism can often drive more than half of the total economy of some nations.
With the current focused efforts to encourage tourism on the Island, this industry could grow stronger than before.
Puerto Rico has an educated, largely bilingual workforce. Remote hiring of U.S. citizens is easier for tech companies than relying on overseas workers. Information work is often outsourced by companies in many industries, and Puerto Rico lets employers avoid issues with currency and time zones.
All these factors make IT a promising field for Puerto Rico. Governor Rossello is actively courting IT companies.He sees Puerto Rico as a good place for a “human cloud,” which can work remotely for anyone in the world. At the same time, the Island is a good physical location for in-person collaboration among companies in the Americas.
The infrastructure is a key issue for IT. Unstable wi-fi and uncertain electricity would be serious obstacles to the governor’s plans. He wrote in a piece in Wired, “We’re giving businesses a chance to test new technologies on a once-unimaginable scale. The rebuilt energy and telecommunications system will be one of the most modern in the world.” If this happens, Puerto Rico could be in a perfect position to blossom into an IT hub.
In the 20th century, Puerto Rico was positioned as the manufacturing hub of the Caribbean. Things weren’t really as good as they looked. In the early years, “manufacturing” referred primarily to poorly paid needlework done as piecework in homes. Later, special tax incentives allowed U.S. corporations to wash profits through Puerto Rico without providing many jobs or a significant boost to the economy.
Without the Section 936 deals, manufacturers will need a strong infrastructure and robust logistics to consider building factories inn Puerto Rico. However, companies which build facilities in Puerto Rico will benefit from the “Made in the USA” label and the shorter supply chain compared with Asian factories.
Local businesses can also move into manufacturing, benefiting from the educated workforce and the Opportunity Zone advantages.
Agriculture was beginning to show promise before the hurricanes struck, but the industry had become very weak before that brief renaissance The territory was importing 85% of its food. After Hurricane Maria, it was clear that Puerto Rico would be better off with more local food sources.
Puerto Rico could grow much more in food crops than it currently does. Local farms were increasingly being used in restaurants on the Island before the 2017 earthquake season interrupted the trend.
There may be many more opportunities, but these are some of the obvious good bets for Puerto Rico.