Maria’s eco­nomic toll on Puerto Rico: Tens of bil­lions

USA TODAY US Edition - - NEWS - Jorge L. Or­tiz

The lat­est re­port from Puerto Rico’s plan­ning board paints a grim pic­ture, es­ti­mat­ing the im­pact of Hur­ri­cane Maria on the is­land’s econ­omy at

$43 bil­lion, $1 bil­lion more than the orig­i­nal assess­ment.

A lo­cal econ­o­mist says the ac­tual num­ber could be more than three times that amount.

As the U.S. ter­ri­tory tries to re­cover from the dev­as­ta­tion in­flicted by two ma­jor hur­ri­canes in the same month – Irma de­liv­ered a glanc­ing blow on Sept.

6, 2017, fol­lowed by a di­rect hit from Maria two weeks later – au­thor­i­ties have been try­ing to mea­sure their ef­fects on an econ­omy that was al­ready shrink­ing.

The board said it ar­rived at the $43 bil­lion fig­ure in part via ques­tion­naires is­sued to the pub­lic and pri­vate sec­tors as well as sta­tis­tics pro­vided by pro­fes­sional as­so­ci­a­tions through Oc­to­ber.

“Given the mag­ni­tude of the nat­u­ral dis­as­ter, the eco­nomic sec­tors will keep feel­ing the im­pact for an un­de­ter­mined amount of time,’’ says the re­port, which took into con­sid­er­a­tion the mil­lions of dol­lars re­ceived to date in fed­eral re­cov­ery funds and in­sur­ance pay­ments.

But a study com­mis­sioned by the Puerto Ri­can eco­nomic con­sult­ing firm H. Calero as­sesses the eco­nomic im­pact at

$139 bil­lion, po­ten­tially up to $159 bil­lion. “It’s not clear what they in­cluded in that es­ti­mate,’’ com­pany pres­i­dent Hei­die Calero said. “Maybe all their num­bers are com­pat­i­ble and have a ra­tio­nal ex­pla­na­tion, but they need to be more trans­par­ent in what method­ol­ogy they used, what were the sources of their in­for­ma­tion, and whether that was their pre­lim­i­nary es­ti­mate of dam­ages and the num­ber will grow as time goes on.’’

Even be­fore get­ting bat­tered by the hur­ri­canes, which killed nearly 3,000 peo­ple and left most res­i­dents without power for sev­eral weeks and some close to a year, the Puerto Rico was more than

$70 bil­lion in debt and had an ad­di­tional

$50 bil­lion in pen­sion li­a­bil­i­ties.

A fis­cal plan ini­tially put to­gether by the Fi­nan­cial Over­sight and Man­age­ment Board for Puerto Rico was re­vised in June to ac­count for the hur­ri­canes’ im­pact. It says the is­land sus­tained tens of bil­lions of dol­lars in dam­age be­cause of Maria, which re­duced the is­land's gross do­mes­tic prod­uct by 8 per­cent.

In ad­di­tion, the doc­u­ment says

40 per­cent of the com­mon­wealth was liv­ing be­low the poverty line, and 8,000 small busi­nesses – about 10 per­cent of the to­tal – had not re­opened. An­other study in­di­cated 40 per­cent of the res­i­dents had lost their job or were earn­ing less money a year af­ter Maria.

Although the fis­cal re­port projects

$80 bil­lion in fed­eral fund­ing to be in­vested in Puerto Rico – a lit­tle over half of the $139 bil­lion Gov. Ri­cardo Ros­sello re­quested in Au­gust – lit­tle of that has had an ef­fect so far.

“A lot re­mains to be done,’’ said is­land-based econ­o­mist Jose Cara­ballo, adding that fed­eral aid and in­sur­ance pay­ments have cov­ered just 24 per­cent of the losses. “The eco­nomic im­pact of the re­con­struc­tion has not been felt.’’

In the long range, Puerto Rico's pros­per­ity will hinge on its peo­ple, and that has be­come an in­creas­ingly dicey propo­si­tion be­cause so many of them have been leav­ing.

The is­land’s pop­u­la­tion had been de­clin­ing for more than a decade be­fore Maria, from a high of 3.8 mil­lion in 2004 to about 3.3 mil­lion in 2017. As U.S. cit­i­zens, Puerto Ri­cans can move freely to the main­land, and tens of thou­sands did so fol­low­ing the hur­ri­canes.

It’s not clear how many have re­turned, but in Oc­to­ber 2017, the Cen­ter for Puerto Ri­can Stud­ies es­ti­mated the is­land could lose more than 470,000 res­i­dents be­tween that year and 2019.

“To me that’s the big­gest chal­lenge fac­ing Puerto Rico, how to keep the pop­u­la­tion from con­tin­u­ing to de­cline,’’ Calero said. “You have a preMaria Puerto Rico and a post-Maria Puerto Rico, but I in­sist – and that’s one of the con­clu­sions of our study – that Maria is pro­vid­ing us a se­cond op­por­tu­nity to trans­form the gov­ern­ment, the econ­omy, health ser­vices, to trans­form and mod­ern­ize the in­fra­struc­ture, but that re­quires a vi­sion about where we want to be.’’

DIS­COVER PUERTO RICO

Trees were felled in his­toric Old San Juan af­ter Puerto Rico took a di­rect and dev­as­tat­ing hit from Hur­ri­cane Maria last year.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.