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[Analysis] Statistics Institute vital for Puerto Rico

By on August 3, 2017

SAN JUAN – Even amid legal battles, calls for its independence and internal disputes, the Puerto Rico Statistics Institute (PRSI) continues to be, experts said, an entity of great importance to the island to have independent and reliable economic data to tackle the fiscal crisis.

“The added value of a developed economy and a solid economy is to have a good system of statistics that allows us to see where the country is headed and to have the direction and certainty that you are looking at accurate data,” economist José Alameda said.

The former adviser to the Planning Board emphasized the importance of relying on a system that is “responsible, ideal and planned in the best possible way,” adding that the PRSI requires total political independence to expose the reality of the situation.

“Without statistics, you can’t pilot the government’s ship, period,” said economist Vicente “Chenti” Feliciano.

Economist Vicente Feliciano stressed that the institute needs more power and leadership in its area of expertise because it is imperative to have accurate data to establish the island’s public policy and that will contribute to root out the island’s negative situation.

“Without the statistics, you cannot run the government ship, period. When we are in a crisis like the one we are in, having a clear idea [of the situation] is important. We don’t know where we are going if we do not have up-to-date statistics and of the quality we need,” Feliciano said.

It had already been established as a recommendation in the report by the Congressional Task Force on Economic Growth in Puerto Rico–created by the federal Promesa law–that the Statistics Institute must continue “to protect its independence,” after emphasizing its qualities as a “highly professional, autonomous, and apolitical organization” that contributes to the financial transparency of the island.

Congresswoman Nydia Velázquez (D-NY 7th District) tweeted her concern about the breach in the independence of the entity, days after Gov. Ricardo Rosselló dismissed four members of the PRSI’s board.

The sentiment was shared by the coordinator of the Private Sector Coalition, Francisco Montalvo Fiol. “In these times, stability and confidence in the institute are needed. Also, changes in the institute’s board eliminate highly qualified and renowned professionals in the statistics, finance and demographics fields,” he said.

Irreverence to its budget

The Congressional Task Force’s report recommends the government to “consider appropriating a level of funding to the Puerto Rico Institute of Statistics that is commensurate with its important responsibilities.”

According to Act 209 of 2003, the Puerto Rico Statistics Institute Act, the government must allocate a Special Fund of $2 million to finance projects for improvements in methodology or statistical products, while its operational budget amounts to $3 million.

However, no administration since the law’s enactment in 2007 has complied with the recommended budget allocation, starting with Gov. Aníbal Acevedo Vilá’s, which allocated less than $1 million at the beginning of the institute’s operations a decade ago.

“By 2007 the fiscal crisis had already begun. This institution was created during that fiscal crisis and since the beginning we have been very careful and very prudent with the scarce funds we have been assigned. We have never been assigned the $5 million that the enabling law of the institute says they have to allocate to this institution. No government has done it,” said Mario Marazzi, the entity’s executive director.

The institute’s budget for the current fiscal year amounts to just over $2 million, an insufficient figure to allow it to fulfill its commitments to analyze, interpret and publish statistical data and information on time, Marazzi told Caribbean Business.

The institute’s law requires the entity to prepare a statistics inventory, compiled from numerous local and federal agencies. Currently, the PRSI prepares 12 out of 203 statistics product found on its website, or 4 percent of its data.

Leadership Crisis

Shielding himself under Act 3 of 2017, which allows the governor to dismiss members of government boards if they aren’t within his circle of trust, Rosselló removed four out of seven members from the institute’s board  and nominated the president of the Planning Board, María Gordillo, as its new representative and chairwoman. That specific nomination raised questions about the independence the institute would have from now on.

This is the second time a governor orders the removal of a PRSI board member. In 2010, then-Planning Board President Héctor Morales dismissed Marazzi for demanding that the Labor Department to publish the Consumer Price Index.

Faced with this confusing scenario, the Statistics Institute requested all members of its governing body, including the dismissed and recently named officials, to determine which members have the power to make decisions on behalf of the board.

“It’s good that they have gone to court, because that’s where claims like this are being heard. The current board, the only one that has the right in law to act and run the institute, is the one the governor of Puerto Rico appointed until a court determines otherwise,” the secretary of Public Affairs and Public Policy, Ramón Rosario, said on behalf of the administration.

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