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It’s quite the touchy subject, which we, frankly, try to avoid, but economically speaking, does Puerto Rico have a chance at being independent or are they destined to become an official part of the union?

What do you mean “we”?

Posted on March 01, 2011 12:10 PM

I’m at a hearing of the immigration subcommittee, and the pseudo-congressman from Puerto Rico is going on about how “we” are a nation of immigrants. “We”? Puerto Rico is a foreign country that became a colony of the United States in 1898, no different from the French colony of Togo or the British colony of Uganda (or the U.S. colony of the Philippines). Congress granted residents of the island U.S. citizenship during World War I, but Puerto Ricans remain a distinct people, a distinct nation, with their own (foreign) language, their own history, their own culture. Like other remnants of late-colonialism (like Belize, Djibouti, Comoros, etc.), most Puerto Ricans don’t want independence at this point, because it would end the gravy train. But that’s not our problem — we need to end this unnatural situation and give the nation of Puerto Rico an independent state as soon as practicable.

Just What Does the National Review & Krikorian Mean – Puerto Ricans Are U.S. Citizens

By Rafael Rodriguez

New York City, NY [CapitalWirePR] March 8, 2011As an American and a conservative, I take great offense at the venomous darts fired by Mark Krikorian in his recent National Review Online post titled “What Do You Mean We?” in which he questions the right of Puerto Ricans – beginning with that of our sole representative in the United States Congress – to consider ourselves a part of the United States.

Whether Mark Krikorian likes it or not, Puerto Rico is a United States territory and Puerto Ricans are natural born U.S. citizens, just like citizens born anywhere else under the glorious banner of the Stars and Stripes. I know you would like to, Mr. Krikorian, but sorry – you cannot – turn back the clock.  Sending African Americans back to Africa was not a practicable solution to the evil of slavery in the 19th century, and forcing independence on the disenfranchised American citizens of Puerto Rico is not a practicable solution in the 21st.

I will agree with one important, salient point made by Mr. Krikorian.  In practice, the island’s current territorial status is essentially colonial in nature, and the perpetuation of that status is indeed unnatural and unworthy of the most basic principles of the American Republic.

What Mr. Krikorian fails to take into account, however, is that for almost 60 years now our fellow citizens in Puerto Rico have lived under a territorial constitution, which expressly declares American citizenship and their loyalty to the Constitution of the United States to be “determining factors” in their lives, both collectively and individually.  Sooner or later, the only natural destiny for citizens such as those, Mr. Krikorian, is the citizenship equality that only statehood can provide.

Once statehood wins the support of a decisive majority of the island’s electorate – and the time will come when it will – what our Nation should do is face its past and its principles, and facilitate an orderly, long overdue transition to statehood for Puerto Rico.

Furthermore, in view of Mark Krikorian’s well-known anti-immigration postures, it is worth underscoring that because of the way Puerto Rico was acquired in the expansion of the United States, Puerto Ricans have never been immigrants.  But we are indeed part of a nation of immigrants.

The vast majority of Americans are, in fact, descended from immigrants who came to this country for a better life, made ours a better country, and now, along with Puerto Ricans, define what it is to be an American. Krikorian himself is descended from some of those very immigrants.  Interestingly, as a matter of fact, as the grandson of Armenian immigrants, Mark Krikorian is descended from people who have been Americans for a shorter period of time than Puerto Ricans.

Mr. Rafael Rodriguez is President and Founder of the Center for Puerto Rico Equality and Advancement in New York.


By Brendan A. McGrail and Matt Robinson

March 8 (Bloomberg) — Puerto Rico, the U.S. territory that reduced its budget deficit by more than a third since 2009, is selling $250 million of debt after its first credit-rating upgrade since Standard & Poor’s began coverage in 1986.

S&P yesterday boosted the commonwealth’s general-obligation rating one level to BBB, the second-lowest of 10 investment grades, because of improved tax collections. Puerto Rico is graded BBB+ by Fitch Ratings, one level above S&P, and A3 by Moody’s Investors Service, two levels higher.

Puerto Rico is more reliable because Governor Luis Fortuno, who took office in January 2009, has cut spending and controlled debt, said Richard Larkin, director of credit analysis at Herbert J. Sims & Co. in Iselin, New Jersey, which manages about $1 billion.

“I’m not surprised about the upgrade,” Larkin said in a telephone interview. “What he’s done could be a model for other governors.” Read the rest of this entry »


The following article was published after Gov. Fortuno’s State of the Commonwealth address on Tuesday night.  His address highlights many areas in which the current administration has taken drastic measures including:  Energy through a new natural gas pipeline, restored and retained credit rating to the island, huge budget cuts reducing the deficit, and a measurable reform to the tax system.  But have the changes been felt by the island’s people?

By : JOHN MARINO, Caribbean Business

Gov. Luis Fortuño used his State of the Commonwealth address Tuesday night to highlight his administration’s achievements, telling Puerto Ricans that “in only two years, we have completed our pledge of bringing you a true change of good government.”

The governor said that his administration inherited a government on the verge of insolvency and in two years managed to:

— Stabilize government finances

— Pay off more than $1.5 billion in past bills

— Reduce the $3.3 billion budget deficit by 75%

— Save Puerto Rico’s credit rating and with it thousands of jobs, and the values of homes and individual retirement accounts

— Get positive ratings from credit rating agencies

The governor also discussed several of the reforms his administration instituted over the past two years, including creating a new permit system that makes it easier for everyone, but especially small and midsized businesses, to expand, grow and create jobs, and instituting an energy reform that will reduce Puerto Rico’s excessive dependence on foreign oil in favor of cleaner and safer sources such as natural gas, solar and wind. Read the rest of this entry »

Once again, Puerto Rico is being looked at as an example for creative avenues of controlling the budget deficit.  After reducing the overall tax rate for both personal incomes and most businesses, the governor of Puerto Rico has installed a very creative means for ensuring all revenues are reported and taxes paid by businesses.


A 10-digit lottery number on a crumpled Church’s Chicken receipt is Governor Luis Fortuno’s solution for pulling Puerto Rico from its “lost decade” and may salvage his popularity.

The number, printed at a Ponce restaurant by a machine that reports sales directly to the Commonwealth’s Treasury, seeks to turn every Puerto Rican into an enforcement agent. The program will give anyone with a receipt a chance to win $1,000 or a car, while forcing businesses to report and pay taxes.

Consumers have a “personal interest in making sure that the tax is collected and sent over to our local Treasury Department,” Fortuno, a 50-year-old Republican, said in an interview in his San Juan office. Read the rest of this entry »

by Marshall Kirby, Public Policy Analyst

For the first time since 2008, Puerto Rico will begin a general obligation bond sale.  The exact figures are not yet disclosed, but the President of the Government Development Bank, Carlos Garcia, has announced that the sale of bonds will be to finance infrastructure and significant public projects.  He estimates that there will up to $2.1 billion in other bond sales this year (Plans General-Obligation Sale).  Portions of the bond sale will include financing projects for capital improvements in the electrical and natural gas sectors (the other portion of the project’s financing will be discussed later).

This is a significant step for the Commonwealth, as it could mark a clear financial and credit turn around from impending disaster.  The island currently has a bond rating which is lower than any state in the US (Plans General-Obligation Sale).  For years, the island has been mired in financial and credit issues which have led to trouble financing needed projects/programs and meeting its continuing expenditures. Read the rest of this entry »

By: Marshall Kirby, Public Policy Analyst

Israel Ortega wrote a short piece in the Washington Caller, in which he praises Puerto Rico’s economic model which was laid out by Governor Luis Fortuno.  (The article can be found here).  Mr. Ortega has long been a conservative voice in the Hispanic policy community.  In his analysis, he lays out strong arguments supporting the governor’s economic policy including the overhaul of the tax code.

Mr. Ortega’s analysis is spot-on in some aspects.  Puerto Rico was in the midst of a serious economic crisis stemming from a lack of investment, slow economic growth, and ballooning government deficits only several years ago.  In the years that have followed, strong economic growth has been made, partially led by large amounts of investments made by foreign firms in technology and life sciences.  The investments made by these firms were not a product of an economic miracle, but rather a product of opening up the island to business by producing an investment friendly environment, simplifying the tax code, and lowering the tax rate.  We have seen this have a positive effect for domestic firms and small entrepreneurs.

Additionally, Mr. Ortega is right in saying that Governor Fortuno has succeeded in establishing an administration which has managed the economy rather well – including cutting the size of government and spending.  Reducing spending has helped the island reduce its expenditures and become much less conscious of raising revenues with additional taxes.  Lower taxes allow businesses and individuals to have more money and to spend it within the economy, which has created a multiplier effect and increasing growth rates.

However, Mr. Ortega’s analysis misses a key point – the new tax system adopted in Puerto Rico under Governor Fortuno’s plan has a very economically damaging aspect to it. Read the rest of this entry »

by Henry Rivera, Chairman, MMTC

See related articles here.

Implementation of the National Broadband Plan (NBP) in Puerto Rico has thus far proven to be a significant hurdle for the Federal Communications Commission (FCC). The NBP was well received by the telecommunications and technology industries, policymakers, and several leading national Hispanic, Asian, and African American groups, all of which are quickly realizing that, without access to broadband services, they will not be able to compete and participate in the 21st century’s digital economy.

In a recent study conducted by the U.S. Government Accountability Office, the U.S. fared very well in its broadband deployment, with more subscribers of broadband residing in the U.S. than anywhere else in the world. While shortcomings still exist, the state of broadband in the U.S. fares better than or equal to all 33 countries within the Organisation for Economic Co-operation and Development (OECD), which are lauded as the most economically prosperous countries worldwide. However, the FCC’s recent study on broadband adoption found that no one in Puerto Rico has access to broadband.

Consider the following:

by Marshall Kirby, Public Policy Analyst

January 17th, 2011 could be a big day for the island of Puerto Rico.  That day is the anticipated start date of the Puerto Rico Bridge Initiative (PRBI), which will set up a fiber optic “bridge” network from Florida to the Commonwealth of Puerto Rico.  The project was funded by the Recovery Act (Stimulus Bill) at a cost of $25.7 million through the US Department of Commerce’s National Telecommunications and Information Administration (NTIA).  Critical Hub, the company awarded the contract, contributed another $6.8 million to the project.

The goal is to fund fast and affordable broadband to the island.  A secondary goal of the project is to provide Puerto Rico with a “stimulus” to their economy in the information technology sector.  The island ranks last in the United States for broadband penetration and use, and the statistics found on the issue show less than 40% subscription rates.  Additionally, the current broadband infrastructure on the island is much slower (78%) and more expensive (60%) than elsewhere in the US.  This project should boost the economic potential for Puerto Rico, given that it will allow for greater job creation, allow for more educational and e-learning opportunities, and raise the islands competitiveness for attracting more firms. Read the rest of this entry »

Traducido por: Julia Cortazar de un Press Release del 30 de agosto

30 de agosto de 2010, Washington, D.C. – En medio de un sinfín de noticias económicas negativas, Puerto Rico desarrolló recientemente un proyecto llamado “Via Verde”, el cual tiene como objetivo impulsar la economía puertorriqueña. The National Puerto Rican Chamber of Commerce respalda este proyecto, cuya meta es construir un gasoducto para distribuir una forma alternativa producción de energía en toda la isla, como un medio para estimular el desarrollo económico.

Aunque el costo de vida en Puerto Rico, especialmente costos como viviendas y terrenos, son más bajos que en la parte continental de Estados Unidos, el costo de la energía ha crecido a casi el doble del costo medio que pagan los hogares en Estados Unidos. Read the rest of this entry »

By: Marshall Kirby, Public Policy Analyst

With contributions by: Justin Velez-Hagan, National Executive Director

November 23 2010, Washington, D.C. – Puerto Rico has been hit very hard in the global economic crisis.  Currently, there is an official 17% unemployment rate, which does not include the underemployed and those who have given up looking for work.  Yet, at the same time, there is a shortage of labor in the agricultural sector.  As of last week, Puerto Rico is discussing Bill 1038, which will in essence allow the Commonwealth to import foreign labor on a temporary basis to assist with the coffee bean and other harvests.  [For more information on the policy, click here]

There are two important issues at play – one is from the business and economics perspective – the crops and the fields need to be harvested.  Each year, there is wasted production and wasted output because the fields lack the physical labor needed to bring them to harvest.  This leads to inefficiency of production, and could eventually cause the island to lose any competitive edge it has in the production of coffee and other agricultural endeavors.  The second issue is that there is inefficiency in the labor market if there is an excess of labor (which 17% unemployment clearly shows) and unwillingness for Puerto Rican’s to work as laborers in the agricultural sector.  This is not a new phenomenon; we have seen this for a long time in the lower 48 of the United States.  Macroeconomics teaches us that an economy will never have a 0% unemployment rate, due to seasonal, frictional, and structural factors. Read the rest of this entry »

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