EuroWire January 2018

Transatlantic Cable

Manufacturing is hard-hit As of 14 th November, according to Ms Alvarez, some 156,000 people had arrived in Florida since the storm hit – Fort Lauderdale, Miami, Orlando – on planes from Puerto Rico, many of them professionals and middle-class workers whose jobs evaporated in the power shortage. They are considered likely to stay on the US mainland, “a crushing blow,” she said, to the island’s fragile tax base and its ability to generate jobs. Government officials say that as many as 300,000 of a population of 3.4 million could eventually leave. And, as Mr Laboy Rivera, the economic development official, said truly, power – or, rather, its absence – is central to their predicament. Among those interviewed by the Times was Chuck Watson, director of research and development at Enki Research, a disaster research and modelling company, who said the lack of electricity had severely compounded Puerto Rico’s economic challenges. Without power, Mr Watson said, the economic losses will quickly multiply. He called the government’s goal of restoring power by mid-December “beyond wishful thinking.” Manufacturing, which makes up 48 per cent of the island’s economy and accounts for a third of tax revenues, is particularly hard-hit by the loss of power. Coping as well with structural damage, debris-strewn roads and generator breakdowns, many manufacturing businesses have struggled to reach their pre-hurricane production and shipping goals. Although their situation was improving in November, Mr Laboy Rivera pointed out that such companies have options – presumably including pulling up stakes and heading elsewhere. And, he warned: “The moment you start putting at risk the global supply chain, you have a big problem.” † Just as worrisome as the exodus, to Mr Laboy Rivera, is the blow to the island’s small and medium businesses, which provide 80 per cent of jobs. He estimated that, as of the 1 st November, up to 50,000 of these businesses had not reopened. One suddenly unemployed respondent, whose varied skills find no takers in a paralysed economy, told Ms Alvarez that her husband had already left Puerto Rico for Boston, where he found work in a factory. Her brother, a nurse, and his wife left for North Carolina. She herself said she had no choice.

Energy

The unfolding legacy of Hurricane Maria in a Puerto Rico without electricity: ’an economic disaster with no end in sight’ “The lack of power is the root of everything. This is a very challenging time right now for Puerto Rico.” Manuel A Laboy Rivera, the secretary of Puerto Rico’s Department of Economic Development and Commerce, did not overstate the plight of Puerto Rico months after last autumn’s Hurricane Maria. As reported from Guaynabo, Puerto Rico, by Lizette Alvarez of the New York Times , Mr Laboy Rivera’s agency estimates the island’s storm-related economic losses at a minimum of $20 billion, although some economists and analysts put it as high as $40 billion, much of this attributable to lost productivity. And, wrote Ms Alvarez: “Puerto Rico’s economy is already $70 billion in debt and will be hard hit by the steep drop in tax revenue.”(“As Power Grid Sputters in Puerto Rico, Business Does Too,” 15 th November) When the Times story ran, much of the island had been without electricity since the storm hit on 20 th September. The Puerto Rico Electric Power Authority’s grid was working at less than 50 per cent, leaving residents in the dark and having to make do with lanterns. For many, what Ms Alvarez termed “the catastrophe of Hurricane Maria” has been followed by an economic disaster with no end in sight. The reported facts support that analysis. Lacking power or a working generator, manufacturers operated sporadically and countless small businesses remained closed. (The Times noted “an epidemic” of broken generators; repair parts can take weeks to arrive and a large new generator can cost upward of $40,000.) On an island driven by tourism, many hotels were unable to receive guests. According to the Puerto Rico Department of Labor, more than 22,000 people applied for emergency unemployment benefits in October, compared with 6,800 in the same month of 2016.

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January 2018