Ivar Pietri makes a compelling case for the economic benefits of statehood on the hearings for H.R. 856
STATEMENT OF MR IVAR A. PIETRI
PRIVATE CITIZEN, BEFORE THE
COMMITEE ON RESOURCES
U S HOUSE OF REPRESENTATIVES
APRIL 19, 1997
Chairman Young, Members of the Committee, ladies and gentlemen, my name is Ivar Pietri. I appear before you as a private citizen that has for twenty-five years been a close analyst of the economy of Puerto Rico. For fifteen years I served as an investment banker based in San Juan with a major international firm, and I helped raise over twenty billion dollars in bond issues for borrowers in Puerto Rico. I am here to share with the Committee my insights into the economy of Puerto Rico as it relates to the political status issue. I am submitting for the record a more detailed presentation with economic charts.
I want to preface my comments by stating for the record that I am proud to be a U.S. citizen and that I believe that the United States of America, our country, is the greatest in the history of mankind. I want to insure that U.S. citizenship for myself and for my four children. I want full rights as a citizen, and I am most willing to assume all the responsibilities. I believe firmly that the only way to attain that goal is for Puerto Rico to be admitted as the fifty-first state.
Mr. Chairman, Puerto Rico is not and has never been an economic miracle. The economy of Puerto Rico has completely stagnated for twenty-five years. For decades, the local administrations led by Commonwealth advocates purposely and irresponsibly pursued a one-dimensional development strategy, neglecting other initiatives and policies in order to foster dependency on Section 936 to sustain their political goals.
As we know, there are many conflicting views about the economic impact of statehood: 936 and U.S. taxes have been the center of the economic arguments against statehood. There have been several studies that supposedly analyze the economic viability of statehood for Puerto Rico. However, they all share the same critical flaw: they are static analyses that superimpose the U.S. tax system on our economy and remove section 936, and assume that nothing else changes. That is not statehood. That is Commonwealth with U.S. taxes and without 936. Obviously, that would be negative. But these studies completely ignore the most important benefits of statehood: full integration into the U.S. economy, political power, credibility, permanence and broad comprehension around the world of what it is.
The benefits of statehood are definitely tangible and concrete, and they will have an extremely positive economic impact. Historically, territories have had a lower economic level than the states. Upon admission into the Union and full integration into the U.S. economy, they experienced accelerated growth that allowed them to converge with the national economy. Mr. Chairman, statehood is a pre-condition to Puerto Rico's economic growth, not vice versa. The opponents of statehood have used the notion that pre-development must come before Puerto Rico is ready for statehood to distort the historical fact that statehood leads to dramatic growth. It is easy to use faulty analysis to pretend that you can prove that statehood would ruin our economy and would be more costly to the U.S than tile other options.
To believe such flawed analysis defies logic and turns a blind eye to certain key facts:
Puerto Rico has many competitive advantages. Only as a state can the potential of these advantages be maximized. As a state we can truly become the Economic Crossroads of fire Americas.
Before I close, I would like to urge the Committee not to listen to the siren calls of those who insist on a level playing field between the alternative forms of status. The playing field can never be level. Each status alternative is inherently different. What the advocates of the level playing field want is to confuse the people of Puerto Rico into believing that the benefits of statehood are available under the other status options. Mr. Chairman as we all know, this is not the case. There is no subset for statehood. The opponents of statehood have used the level playing field concept to confuse our People. To have the benefits of statehood without the responsibilities would not only be unfair to all the other citizens of the Nation, but in some aspects may be unconstitutional. No matter how many of those benefits Congress would concede them, no one could ever provide them with the most important ones of all: full integration into the U.S. economy stability, permanence and the political power of statehood. I urge the Committee not to accept definition changes to the status alternatives that could lead to re-creating the fiasco of the 1993 plebiscite.
I strongly urge Congress to pass H.R. 856. Thank you very much.