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Editorial & Column
By FRANCISCO JAVIER CIMADEVILLA
May 27, 2004
Sometimes, one wonders whether our legislative leadership and even some of our business leaders are living on the same planet as the rest of us. One wonders, for example, whether the minds that conceived Senate Bill 2788, the new Antitrust Law of the Commonwealth of Puerto Rico, and Senate Bill 2771 to amend our Minimum Wage Law, have a clue about what running a business and creating jobs is all about.
The proposed antitrust bill would require prior Department of Justice approval of most, if not all, mergers, acquisitions, and expansions by businesses, even expansions by small businesses, including new companies coming to Puerto Rico. In the process, it would require the proponent company to disclose to the world up-to-now confidential business information about long-term expansion strategies, production, and sales.
It also would give anyone, including competitors, the right to ask the court for an injunction to stop any expansion plan until the court has had a chance to review the case on its meritswhenever that may be. The governments powers to interfere in the affairs of a private business would be ample and the penalties stiff.
The proposed amendments to the Minimum Wage Law are equally outrageous. That bill would give the local labor secretary the authority not just to establish specific industrywide minimum-wage levels, but also to examine the books of individual businesses and, if it should determine the employees are being paid too little relative to the companys profits, order workers salaries and fringe benefits adjusted.
Under the pretense of fostering fair and healthy competition by moderating the rigors of the free market, in one case, and providing social and economic justice for our workers, in the other, these two bills would strangle local businesses and kill the islands ability to attract new investment.
With the excuse of an ambiguous and outdated protectionist economic policy thats completely contrary to the worldwide trends of open economies and markets, these measures would give government bureaucrats unprecedented authority to investigate and intervene in the private affairs of businesses, turning the phrase free enterprise into a bad joke.
Although scary, the case of the legislators sponsoring these preposterous bills is easy to understand. By and large, they know diddly-squat about running a business. They are frozen in the populist rhetoric of the 1940s, which lately has reared its ugly head again in such places as Brazil and Venezuela. These politicians apparently still believe any amount of antibig-business rhetoric will garner them votes from the people. Yet, they disregard that the people need jobs, and the best way to create jobs is to propitiate a healthy and competitive free-enterprise environment where the private sector can lead the islands economic development.
The case of some businesspeople behind these two billsand behind other protectionist and antibusiness measures being cooked up in the Legislature right now, such as the withholding tax on offshore loans and the Consumer Defense Codeis more difficult to understand. They should know better. They know that to continue to attract outside investment, Puerto Rico needs to become more competitive with respect to other jurisdictions in the States and in foreign countries. They pay lip service to the notion of Puerto Ricos role as an economic bridge in the Americas and boast of the possibility of hosting the headquarters of the Free Trade Area of the Americas. Yet, in their backroom deals with politicians, they appear to send Puerto Rico back to the economic middle ages. Apparently, they are trying to manipulate the private-enterprise system to their benefit, knowing they can control competition with their local connections, never mind the overall damage to Puerto Ricos free-enterprise system.
Dont dismiss the importance of these bills, thinking they are so outrageous that theres no way they will ever become law.
Dont be so sure. Were not. If you dont like these bills, you had better speak out. Quickly and loudly. Tell the Legislature very strongly: Enough already!
This Caribbean Business article appears courtesy of Casiano Communications.