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Association will assess government action in reference to 15 recommendations for improving the industry


July 20, 2000
Copyright © 2000 CARIBBEAN BUSINESS. All Rights Reserved.

The Puerto Rico Manufacturers Association (PRMA) announced last year that it would send a clear message to the government and the island’s political parties about its members needs.

This year’s PRMA convention will remain true to that announcement. It will assess how the government has dealt with 15 recommendations the association made for improving the manufacturing industry, said William Riefkohl, PRMA executive vice president.

"Manufacturing is 44% of the island’s Gross Domestic Product (GDP). If you consider that tourism is now 6% of the GDP, this is a major difference. In past years, we have seen plant closings, reductions, and mergers. But no new companies arrive in Puerto Rico. Last year, Miguel Nazario (current PRMA president) asked us to come up with a major statement–easy to sell and explain to our membership–describing principal issues we think manufacturing needs to maintain its strength as a sector," said Riefkohl.

The resulting 15 tenets were compiled by PRMA members at hearings held in 1996. They include expanding the definition of flexi-time, promoting tax credits to U.S. industries that establish operations in Puerto Rico, and the use of supercredits to members of the manufacturing industry involved in research, investigation, and development. Other points were promoting contract manufacturing locally, elevating Puerto Rico Development Company’s (Pridco) executive director position to cabinet level, gradually reducing energy costs 50% over five years, and finding ways to work within the Jones Act so that maritime transportation costs between Puerto Rico and the mainland U.S. may be reduced.

After Nazario made the15 points of improvement public during last year’s convention, two of the gubernatorial candidates, Carlos Pesquera and Sila Calderon, contacted the association to discuss the measures and how to incorporate them into their respective political platforms.

"At first, we thought the current government should address these issues. But now, the candidates can assure this will extend over the four-year term. Many of the points, at least 11 or 12, are in both parties’ platforms. Some have been rejected, but we have a good strong position within each platform," said Riefkohl.

So far, PRMA credits the current government with having worked on three of its recommendations. The first was securing that Puerto Rico be included in the Research & Development tax credits the federal government grants eligible U.S. companies. Puerto Rico had not been included before, since 936 companies were exempt from federal taxes. Congress began including companies in Puerto Rico in the credits last year since they are now paying taxes.

A second point came about by accident, when former Secretary Carlos A. Vivoni, from the Department of Economic Development and Commerce (DEDC), stepped down last year. Governor Pedro Rossello named Xavier Romeu, at the time Pridco executive director, to head both the DEDC and Pridco, accounting for the PRMA’s request to acknowledge the importance of the position as manager of the manufacturing sector. Although the change is not permanent, at least Sila Calderon has pledged to elevate the Pridco executive director position to cabinet level, while Carlos Pesquera said he will create a new cabinet position, called Secretary of Technology, which will be valuable for the island’s manufacturing industry.

The third point involved working on a plan to attract contract manufacturing companies to Puerto Rico, taking advantage of the technological and logistical advantages that the island offers. As reported in CARIBBEAN BUSINESS (CB May 25), the government is working on a program to support the development of contract manufacturing on the island, which is expected to be unveiled later this month.

"This we achieved over the past year. The rest will have to wait until after the elections, but we are confident that most of the points are included in the candidates’ platforms. In the meantime, we are actively working with the membership, educating them on why the points are necessary for their future," said Riefkohl.

This Caribbean Business article appears courtesy of Casiano Communications.
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