Economy
Milla de Oro
is a major financial center in Puerto Rico.
In the early 20th century the
greatest contributor to Puerto Rico's economy was agriculture
and its main crop was sugar. In the late 1940s a series of projects codenamed Operation Bootstrap encouraged a significant shift to manufacture via tax
exemptions. Manufacturing quickly replaced agriculture as the main industry of
the island. Puerto Rico is classified as a "high income country" by
the World Bank.[139][140]
Economic conditions have improved
dramatically since the Great Depression because of external investment in capital-intensive
industries such as petrochemicals, pharmaceuticals and technology. Once the beneficiary of special tax treatment from the
U.S. government, today local industries must compete with those in more economically
depressed parts of the world where wages are not subject to U.S. minimum wage
legislation. In recent years, some U.S. and foreign owned factories have moved
to lower wage countries in Latin America and Asia. Puerto Rico is subject to
U.S. trade laws and restrictions.
Also, starting around 1950, there
was heavy migration from Puerto Rico to the Continental
United States, particularly New York City, in
search of better economic conditions. Puerto Rican migration to New York
displayed an average yearly migration of 1,800 for the years 1930–1940, 31,000
for 1946–1950, 45,000 for 1951–1960, and a peak of 75,000 in 1953.[141]
As of 2003, the U.S.
Census Bureau estimates that more people of
Puerto Rican birth or ancestry live in the U.S. than in Puerto Rico.[142]
On May 1, 2006, the Puerto Rican
government faced significant shortages in cash flows,
which forced the closure of the local Department of Education and 42 other
government agencies. All 1,536 public schools closed, and 95,762 people were
furloughed in the first-ever partial shutdown of the government in the island's
history. On May 10, 2006, the budget crisis was
resolved with a new tax reform agreement so that all government employees could
return to work. On November 15, 2006, a 5.5% sales tax was implemented.
Municipalities are required by law to apply a municipal sales tax of 1.5%
bringing the total sales tax to 7%.[144]
Tourism is an important component of Puerto Rican economy supplying
an approximate $1.8 billion. In 1999, an estimated 5 million tourists visited
the island, most from the U.S. Nearly a third of these are cruise ship
passengers. A steady increase in hotel registrations since 1998 and the
construction of new hotels and new tourism projects, such as the Puerto
Rico Convention Center, indicate
the current strength of the tourism industry. In 2009, tourism accounted for
nearly 7% of the islands' gross national product.[145]
Puerto Ricans had median household income of $18,314 for 2009, which makes Puerto Rico's economy
comparable to the independent nations of Latvia or Poland.[146]
By comparison, the poorest state of the Union, Mississippi,
had median household income of $36,646 in 2009.[146]
Nevertheless, Puerto Rico's GDP per capita compares favorably to other
independent Caribbean nations, and is one of the highest in North America. See List of North American countries by GDP per
capita.
The public
debt of Puerto Rico has grown at a faster pace than the
growth of its economy, reaching $46.7 billion in 2008.[147]
In January 2009, Luis Fortuño enacted several measures aimed at eliminating the
government's $3.3 billion deficit,[148] including laying off 12,505[149]
government employees. Puerto Rico's unemployment rate was 15.9 percent in
January 2010.[150]
Some analysts said they expect the government's layoffs to propel that rate to
17 percent.[151]
In November 2010, Gov. Fortuño proposed
a tax reform plan that would be implemented in a six-year period, retroactive
to January 1, 2010. The first phase, applicable to year 2010, reduces taxes to
all individual taxpayers by 7–15%. By year 2016, average relief for individual
taxpayers will represent a 50% tax cut and a 30% cut for corporate taxpayers,
whose tax rate will be lowered from 41 to 30%.[152]
At the same time, the latest report
by the President Task Force on Puerto Rico Status recognizes that the status
question and the economy are intimately linked. Many participants in the forums
conducted by the Task Force argued that uncertainty about status is holding
Puerto Rico back in economic areas. And although there are a number of economic
actions that should be taken immediately or in the short term, regardless of
the ultimate outcome of the status question, identifying the most effective
means of assisting the Puerto Rican economy depends on resolving the ultimate
question of status. In short, the long-term economic well-being of Puerto Rico
would be dramatically improved by an early decision on the status question.[118]
No comments:
Post a Comment