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Editorial & Column
By FRANCISCO JAVIER CIMADEVILLA
February 6, 2003
Hows Puerto Ricos economy doing? What was its performance last year? Where is it going this year? If you are a regular CARIBBEAN BUSINESS reader, you know the answers to these questions. If you depended on official government statistics, you would have absolutely no clue.
Believe it or not, at press time Monday, the government was still making up its mind about how Puerto Ricos economy did in fiscal year 2002 (ended June 30, 2002). Yes, thats right. Were four and a half months away from wrapping up the current FY 2003 and the government still doesnt know exactly how we did last year, or at least it hasnt said for sure.
Last week, Planning Board President Angel Rodriguez announced that in all likelihood (the figure is still not final), the islands economy shrank by 0.1% in FY 2002. Never mind whether any businessperson worth his or her salt would have any use at this point for that information. In business, eight-month-old economic figures are ancient history. Businesspeople know exactly how the economy did last fiscal year. Their cash registers told them. They also have a pretty good idea of how poorly its still doing right now.
But what do government officials think? Apparently, it depends on whom you ask and when.
Last November, in a well-publicized public relations event, led by the governor and designed to put the best possible face on the administrations management of the economy, the president of the Planning Board announced an economic growth projection for FY 2003 (ends June 30, 2003) of 2.7%. He said he based his projection on a series of positive economic indicators for the first four months of the fiscal year, including a hike in the number and value of approved construction permits and the final go-ahead on a massive government infrastructure construction program.
Now, scarcely two months later, the Planning Board president tells us the economic growth projection for the current fiscal year has been revised downward to 1.7%. The secretary of Economic Development & Commerce, meanwhile, tells us the figure could be less than 1% and even approach 0%. Both officials cite strictly external factors as the reasons for the dimmer economic outlook for the island: the war with Iraq, the crisis in Venezuela, the still stagnant U.S. mainland economy, the bear stock market, corporate scandals at Enron and World Com, and even the 9/11 terrorist attacks.
But wait. Last November we already knew about an impending war with Iraq, and about the crisis in Venezuela and about the stagnant U.S. economy, and all the rest. What gives? How could the official government economic growth projections go from 2.7% to 0% in only two months? And its all someone elses fault?
It seems the government has no better idea of where the economy is going this year than the average lotto player has about what will be the winning number. Meanwhile, the administration is not doing what it should to get this economy going in the short term, namely putting actions behind words by really getting the government infrastructure construction projects going and unclogging the permits bottleneck to allow private-sector construction to move forward also.
After it does that, then the government can afford to worry about how Puerto Ricos economy will look in 2025.
The government has a serious credibility problem when it comes to official economic statistics to the point they are virtually meaningless. Admittedly, these problems are old. They werent created by this administration. By the same token, we have to say we havent seen any serious attempt by this administration to fix them either.
The proposal of an Office of Economic Statistics--akin to what the U.S. Commerce Department represents at the federal level, which produces credible, reliable, monthly economic reports that can be useful for businesspeople--seemed like a good idea. Unfortunately, the project seems to be moving at a snails pace, if at all.
Thats a shame. Because when it comes to the economy, the government needs to be more accountable to businesspeople, taxpayers, and the people at large.
This Caribbean Business article appears courtesy of Casiano Communications.