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A Banner Year For Puerto Rico Exports
By FRANCISCO JAVIER CIMADEVILLA
December 4, 2003
Despite the economic slowdown that has afflicted just about every business sector in Puerto Rico over the past three years, island exports had their best performance ever in fiscal year 2003.
During that period (from July 1, 2002 to June 30, 2003), exports from the island totaled $55 billion, a whopping 17% increase over the year before.
While general inflation and higher costs of intangibles in pharmaceutical production helped inflate the value of Puerto Ricos handsome export growth, experts agree the islands manufacturing engines started to turn at a faster pace last year, in part to start resupplying severely depleted stateside inventories.
What has been the actual effect of this trade expansion on job creation is another matter. While the value of our exports continues to grow, manufacturing jobs remain stagnant. Still, no matter how you slice it, 17% is remarkable growth in any league. But its more so when the real growth of the islands overall economy was a mere 1.6% during the same period.
Besides, there are a couple of reasons that make the growth in exports last year even more noteworthy.
First, contrary to the predictions of doomsayers, Puerto Ricos manufacturing industry is alive and well, especially the pharmaceutical industry. The overwhelming majority of the islands exports consists of goods manufactured on the island and exported to stateside and foreign markets. Without exports, there would not be a manufacturing industryor the jobs it creates.
Second, although it is great for our island to play host to national and multinational companies that manufacture here for export abroadas that creates jobs herelocal companies have to do a better job of growing through exports. Whether because of lack of export finance, an oversupply of government red tape, or the inability to produce on a large scale with the reliability required by export markets, the fact is that local companies dont do nearly as much as they should.
With a population of four million people, Puerto Rico is a small market compared with others. Our chances for continued economic growth depend on generating external cash flowing onto our island, such as that generated by tourism and export activity.
Given the importance of trade to Puerto Ricos economy, it is disappointing to witness the poor efforts of the current administration in handling Puerto Ricos participationas part of the U.S.in the processes of regional trade integration that will become a reality with the implementation of the Free Trade Act of the Americas (FTAA).
The latest example was the flap over the islands bid to host the FTAAs permanent headquarters. Thanks to the initiative of the private sector, Puerto Rico set out to get it. After paying lip service to the effort, however, at the last crucial moment the government was not there to support the application. Although private-sector representatives went forward with the application, it is uncertain whether we have a fighting chance against other locations, such as Miami, that have strong and well-organized support from both the private sector and the government.
Hosting the permanent secretariat of the FTAA would have more than merely symbolic importance. Millions of dollars would flow into Puerto Ricos economy as a result of the business meetings and related activity it would generate. As the location for the FTAA headquarters, our island would become another true bridge for trade between North, Central, and South America.
More importantly, together with the development of a world-class transshipment port, hosting the permanent seat of the FTAA would put Puerto Rico on the map as far as worldwide trade is concerned.
One would think that for an administration so hell-bent on carving an international role for the island, getting more effectively involved in our hemispheric trade issues would rank higher on its list of priorities.
Instead, while some of these matters were being discussed in Miami, our secretary of state was in Bolivia playing republic.
This Caribbean Business article appears courtesy of Casiano Communications.