The Post-COVID Economic Outlook and Recovery of Puerto Rico – Better than Expected
On April 6th, 2021, FPR hosted its third event in our Fast Forward Puerto Rico discussion series, an event that brings together influential leaders who are rebuilding the future of Puerto Rico. For the third installment of the series, we sat down with Natalie Jaresko, Executive Director of the Financial Oversight and Management Board for Puerto Rico, to discuss the economic outlook for Puerto Rico, how to help the economy bounce back quicker, and the role of the third sector in supporting recovery efforts.
At the start of the discussion, Jaresko highlighted that the post-COVID economic recovery and outlook for Puerto Rico is looking better than after Hurricane Maria – largely because of increased access to around $45B in federal funds from the CARES Act, the CRRSA Act and the new American Rescue Plan – and also because the debt burden has been significantly reduced in the the Oversight Board’s new Plan of Adjustment.
The Oversight Board recently announced that its amended Plan of Adjustment is restructuring approximately $35B of Puerto Rico’s debt while protecting pensions. This is a massive 80% reduction of debt down to $7.4B, taking a significant step forward in laying the foundation for Puerto Rico’s long-term economic recovery and growth.
As for “not letting a crisis go to waste,” and “building back better,” Jaresko pointed to the importance of investments in the fundamentals of education, health, economic development, and infrastructure, like electricity, which is essential for both local communities and markets.
During the talk, Jaresko also stressed the importance of developing homegrown solutions. “Puerto Rico needs organizations like [Foundation for Puerto Rico], who speak loudly,” regarding citizen participation and uniting voices for a better Puerto Rico. Nonprofits have the advantage of bridging the gap between government agencies and private sector players with community needs and solutions. On this, Jaresko emphasized the need for nonprofits to collaborate, rather than compete, and mobilize stakeholders on a variety of issues, including accountability and better service provision.
The participants benefited from an active discussion with Natalie Jaresko, who brings extensive experience to the challenges Puerto Rico faces, including as the former Minister of Finance of Ukraine (2014-16) and from more than two decades of experience investing in small and medium-sized businesses in the region as co-founder and CEO of Horizon Capital.
Previous events in this series included conversations with José González, president and CEO of the Federal Home Loan Bank of New York, and most recently with Julie Chavez Rodriguez, Director of the White House Office of Intergovernmental Affairs for President Biden. Our next discussion will be held with Manuel Cidre, Secretary of Puerto Rico’s Department of Economic Development and Commerce.