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Puerto Rico’s Economy Outshines Neighboring Countries

Compared with the fifty states of the United States, Puerto Rico has a high incidence of poverty. Compared with its Caribbean and Latin American neighbors, however, Puerto Rico is prosperous and stable.

The World Bank reports that Caribbean nations’ average Gross National Income (GNI) per capita is about $15,000 per year, while Puerto Rico’s GNI per capita is $24,760. The United States overall GNI per capita is $70,480. Compared with its neighbors, however, Puerto Rico is near the top of the list. Puerto Rico is outranked in per capita GNI by only a handful of Caribbean nations and territories:

  • Aruba at $41,430
  • the Bahamas at $31,010
  • the Cayman Islands at $52,500
  • the U.S. Virgin Islands, at $39,552

No Latin American countries have higher GNIs than Puerto Rico.

World Data sets Puerto Rico’s political stability at 67 of a possible 100 points. The United States received a rating of 65. The Dominican Republic shows 54, Jamaica 58, and Haiti 23. Some Caribbean nations, including Cuba and Anguilla, are considered more politically stable than Puerto Rico, but most score lower.

Caribbean economies

Most Caribbean nations rely heavily on tourism, and the drop in travel during the pandemic led to staggering economic contractions. Apart from Guyana, Caribbean nations averaged a 12% drop in their economies since 2020. Guyana has seen significant economic growth as they have begun exporting oil. Still, their GNI per capita of $22,920 is lower than Puerto Rico’s.

Haiti, the poorest country in the Caribbean, has a GNI per capita of $1,420. Most (87.6%) of the residents are poor, living on $6.85 or less per day, and more than 30% live on $2.15 a day, the level defined as extreme poverty. Haitians must deal with earthquakes, floods, and hurricanes on a regular basis, and the nation is currently coping with an outbreak of cholera. Access to water and sanitation is low and decreasing, and both gang violence and political violence are daily challenges.

Jamaica is also vulnerable to natural disasters, increasing crime rates, and social unrest. The government has been relying on austerity programs to reduce debt, but the costs of debt service are still high enough to prevent investments in infrastructure. The poverty rate has fallen from 23% in 2022 to 12.6% in 2022, as tourism began to recover. GNI per capita is $5,190.

Latin America

Latin America was hit hard by the COVID-19 pandemic and is also extremely vulnerable to climate change. Latin American nations like Venezuela are facing severe levels of outmigration and well as political upheaval. Hurricanes, floods, and droughts are becoming more common and access to safe water supplies is becoming a major challenge.

The average per capita GNI for Latin America is $16,533.

Argentina is one of the largest economies in Latin America. It has extensive agricultural and manufacturing industries and is rich in natural resources. The Council on Foreign Relations considers Argentina one of the most politically stable of Latin American nations, but also acknowledges high levels of corruption and political polarization. At $23,170, the GNI per capita is slightly lower than Puerto Rico’s.

Honduras is a largely agricultural country, with 52.4% of the population living on $6.85 per day and 13.3% subsisting at the extreme poverty level of $2.15 a day or less. The per capita GNI of Honduras is $5,620. Honduras faces high levels of violence, unstable government, great economic inequality, and widespread food insecurity, among other problems.

Puerto Rico

While Puerto Rico receives less federal support than the 50 states and has significantly less voice in American democracy, the position of the Island is stronger and more stable than the positions of its neighbors in the Caribbean and Latin American regions. “The current level of development in Puerto Rico is high by the standards of much of the world,” said the New York Federal Reserve Bank, “but not relative to the United States as a whole.” Their report goes on to outline the advantages of U.S. affiliation for Puerto Rico: “Finally, the island possesses certain fundamental advantages that create the potential for sustained growth: an increasingly skilled and educated workforce, a favorable business climate, deep familial connections to the mainland United States, and the benefits of U.S. legal, contractual, and financial structures.”

Puerto Rico’s relationship with the United States is one of the reasons for Puerto Rico’s strength, but the territorial nature of that relationship is also a primary reason for its weakness in comparison with the states. Given a level playing field, Puerto Rico could be as prosperous as the states.

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