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Alberto Bacó acknowledges hardships for Puerto Rico’s economic development

By on December 1, 2016

SAN JUAN – The migration of Puerto Ricans and lack of liquidity squandered economic development efforts led by Alberto Bacó Bagué, and today the outgoing Economic Development (DDEC by its Spanish initials) secretary insisted at the transition hearings that Puerto Rico must be promoted in the exterior more aggressively to attract companies, tourists and investors.

“For the past four years, we are still in a crisis and that was adjudicated. The diaspora and lack of liquidity watered down all efforts. The issue of liquidity must be tackled immediately. Every business to be reestablished must be able to count on quick liquidity. I’d be more aggressive in publicity campaigns. We must tell the world what Puerto Rico is,” Bacó Bagué said.

The Economic Development secretary assured that during his administration, he maximized benefits granted by Acts 20 and 22 of 2012 to promote the export of services for job creation and attract foreign capital to the island.

baco-bague-transition-hearing“It is an extraordinary program, it must be kept [Acts 20 and 22] because they come for the tax incentives. What I do suggest is evaluating the exemptions. One of the criticisms of the system is it gives, gives and gives and doesn’t demand anything in exchange for exemptions. If we took a look at the decrees with the companies and we renegotiate with them, Puerto Rico would have a fund for rainy days,” he argued.

Bacó Bagué assured having Puerto Rico’s middle class “in [his] heart,” since they must make extraordinary efforts to survive amid the fiscal crisis.

“I think Puerto Rico’s economic development isn’t treated with the necessary weight. Among priorities stands strengthening traditional industries, such as manufacturing, agriculture and tourism…. The problem is fiscal. With a debt of the magnitude we have we could bring 78 Lufthansas, 78 airports, and if we don’t achieve liquidity or access to markets there is no way to turn the numbers positive because the diaspora is so large,” he emphasized.

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After concluding his lecture, Governor-elect Ricardo Rosselló’s transition team gave a press conference and Fortaleza Public Affairs Secretary-designate Ramón Rosario criticized Bacó Bagué for his failure to launch Puerto Rico’s economic development during this administration.

“The few achievements he enunciated were a product of Act 20 and 22, laws that the whole [Popular Democratic Party] delegation voted against. We see how agency directors blame the Legislative Assembly when they have to admit their failures,” Rosario denounced.

For his part, Alfonso Orona, principal legal adviser to the governor-elect, emphasized that the Economic Development Department didn’t implement a single measure to encourage small and midsize businesses, and reiterated that Bacó Bagué came to blame others for not assuming his responsibility.

The Puerto Rico Industrial Development Co. (Pridco) and its executive director, Luis Ortiz Ortiz, meanwhile, said in the hearings that during the past administration, the manufacturing industry lost 20,000 jobs, but with Gov. Alejandro García Padilla’s administration only 5,000 were lost.

“We have to diversify more. There is no formula per se. We can’t fall behind and we have to innovate,” Ortiz Ortiz said.

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Treasury Secretary Juan Zaragoza Gómez, a member of the outgoing administration’s transition team, pointed out that tax credits have had a “brutal” impact on the Treasury, and that from his agency’s point of view, these are out of control.

“We must look at credits without passion because they are a leaking faucet. When you give a 90 percent [tax] credit to produce films in Puerto Rico, one must ask what is the cost-benefit,” Zaragoza Gómez affirmed.

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