Economy

Puerto Rico works to sell its economic turnaround

WASHINGTON — One morning last month, Jose Perez-Riera, Puerto Rico's commerce secretary, spent hours in a 10th-floor television studio here telling news stations across the country that his island's economy is improving.

In Cooper City, Fla., however, Puerto Rican-born entrepreneur Greg Batista doesn't see it. Citing high unemployment and a lack of business opportunities on the island, Batista said that of the hundreds of Puerto Ricans he knew who'd left for the mainland United States, only two or three would consider moving back.

"Unless you have a really compelling reason to stay on the island," Batista said, "the best opportunities are in the States."

That perception presents a major challenge for Perez-Riera and other Puerto Rican officials as they try to convince emigres and U.S. businesses that the island's economy is turning around after a recession that began even earlier there than it did on the mainland.

Last month — after President Barack Obama became the first sitting U.S. president in 50 years to visit Puerto Rico — Perez-Riera was in Washington to announce a $4.3 million expansion by the agricultural giant Monsanto. The deal underscored the strength of Puerto Rico's life sciences sector and an overall resurgence in business over the past two and a half years, he said.

He also spoke of the broad-based policy changes led by the island's governor, Luis Fortuno, who's slashed tens of thousands of government jobs since 2009 and approved significant changes to the tax code.

But the 43-year-old Batista — one of about 4 million Puerto Ricans who live in the mainland United States, including more than 800,000 in Florida — said he and the Puerto Ricans he talked with sensed little change.

"The general feeling is that it doesn't matter who's (in power) there," Batista said. "It's always going to be the same thing."

In 1991, when Batista graduated from the University of Puerto Rico's prestigious engineering program, he'd already accepted a job offer in Miami. About a decade later, he started his own construction company based in Cooper City, 20 miles north of Miami.

Batista estimates that half his graduating class moved to the mainland, too. They were part of a widespread migration; the 2010 U.S. census showed, for the first time, more people of Puerto Rican descent living in the mainland United States than on the island, whose population is about 3.8 million.

For him and others, Batista said, the mainland offered job opportunities and a quality of life the island couldn't match.

When Fortuno took office in January 2009, unemployment stood at 13.1 percent. Puerto Rico was in the depths of a recession that began in 2006, more than a year before it hit the mainland. Rumors were swirling that the island's credit might be downgraded to junk bond status, and if that happened, some said, unemployment could hit 25 percent.

That crisis didn't occur, but by May, the most recent month for which figures were available, unemployment had climbed to 16 percent, significantly higher than in Nevada, which had the highest unemployment rate of any state, at 12.1 percent.

Hector Ferrer, the head of the opposition Popular Democratic Party, said the economy was in worse shape than it was when Fortuno took over.

"You can tell because there are more Puerto Ricans without a job," Ferrer said. "There are more bankruptcies, both in the commercial and personal aspects, and there's an increase in foreclosures and an increase in bank delinquency. Those are indicators that the economy is not OK."

Perez-Riera said that misconceptions about Puerto Rico were nothing new. During a break from radio and television interviews, he recalled a childhood visit to the mainland when someone had asked him whether refrigerators existed on the island.

What's more recent, he said, is that companies — if not yet the public — are detecting opportunities in Puerto Rico.

Last month, Puerto Rico's government announced that Goldman Sachs and a Spanish company were partnering in a $1.4 billion deal to reconstruct two of the island's largest roads, the biggest private investment in American infrastructure since 2006, Perez-Riera said.

"Companies that perhaps were thinking about leaving are thinking about staying and expanding," Perez-Riera said. "People that were thinking that their future was in Orlando or some other places are starting to look towards opportunities in Puerto Rico. Those types of things don't happen by coincidence."

Pedro Pierluisi, who holds Puerto Rico's nonvoting seat in Congress, said in an email that Fortuno's government had helped bring the economy back from "the brink of disaster."

"We are not yet where we need to be, but after years of irresponsible stewardship we are finally on the right path and moving in the right direction," Pierluisi said.

Luis DeRosa, the president of the Puerto Rican Chamber of Commerce of South Florida, said he'd sensed more optimism about Puerto Rico recently among the private sector. He recently responded to a Guatemalan company that requested information about expanding to Puerto Rico, a signal to him that the economy is improving.

"It's turning a corner," DeRosa said. "It's a process. It's at a snail's pace, but it is taking place."

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