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Este informe no está disponible en español. CARIBBEAN BUSINESSMinding Our Businesses: Part IIIITop Gubernatorial Candidates Share Their Visions And Proposals For Guiding Puerto Rico’s Economic DevelopmentBY YVONNE GARCIA & LUCIENNE GIGANTEJuly 6, 2000 Editor’s Note: This is the last in our four part series on the economic programs of the two major candidates for governor. Sila Maria Calderon of the Popular Democratic Party (PDP) and Carlos Pesquera of the New Progressive Party (NPP) discuss their economic development programs in the areas of trade, telecommunications, privatization and government permitting bureaucracy. Despite repeated requests, Puerto Rican Independence Party (PIP) candidate Ruben Berrios could not make himself available for an interview. If and when he does, CARIBBEAN BUSINESS will publish his economic development proposals.
The export-led growth model has been a successful development strategy for countries like Chile and the Asian Tigers. Do you believe it is important to diversify Puerto Rico’s external trade given the fact that the majority of the island’s exports are to the U.S. mainland? What would you do to diversify trade between Puerto Rico and foreign countries? Although the efforts undertaken in the past few years to increase exports have been successful, we can still do more to have this sector reach its full potential. We will continue to support the efforts to expand Puerto Rico’s export through commercial missions, for example, but we will also commit resources to maximize the use of technology to market Puerto Rico’s export products in other ways, especially through the Internet. We will create, through legislative appropriations and private sector matching funds, an Export Promotion Fund of at least $20 million to invest in integrated marketing campaigns of Puerto Rico’s products in U.S. and foreign markets. We will also establish an electronic foreign trade center, which will be much more than just an electronic catalog of Puerto Rico’s export offerings. The purpose of the electronic trade center will be to give Puerto Rican businesses the ability to offer and sell their products for export online just the same as they would do through a private e-commerce website. Another important initiative is the creation of a permanent display of Puerto Rican products an the new World Trade Center we are building as part of the Americas World Trade Center and Convention District at Isla Grande. We will also study the possibility of establishing an export promotion program in support of Puerto Rico’s food products industry similar to the one we have for Rums of Puerto Rico, which will concentrate on marketing our food products in Hispanic markets in the U.S. as well as in Latin American and the Caribbean. Telecommunications deregulation has been very slow to progress and companies haven’t been able to bring services and products available in other countries. What do you propose to speed up the opening of the market and the arrival of new technologies? As I have explained earlier, I am committed to making the technological revolution of recent years a part of the life of every one of our citizens. Obviously, telecommunications are at the core of the information era of today. In our platform, we reaffirm our commitment to a free and competitive market in telecommunications as a way of providing better service, more alternatives, and lower rates to our people. As part of this commitment, we will offer for public sale the remaining shares of the Puerto Rico Telephone Co. still held by the government. We are committed to creating the conditions and incentives that will lead to the installation of Digital Subscriber Lines, fiber optic networks, wireless networks, and other new developing technologies that will provide Puerto Rico with broadband telecommunications. We are committed to the availability of high speed access to the Internet in all of Puerto Rico. I have a powerful commitment to making the most of all the advances in technology and telecommunications as an integral part of our economic development strategy. This will be a big part of the role of the Secretary of Technology that I have proposed, and it will be a big part of my own effort as Governor of Puerto Rico. These are not just words, I live and practice my commitment to technology every day, as does my staff. In my administration, there will be major activity in the technological development of our society, and this includes telecommunications. Do you see film production as a viable component of Puerto Rico’s economic development? Under your administration, will the Film Commission receive more funding to increase foreign and local film productions? We have a program to increase the resources available to the film industry to $10 million yearly and also reduce the costs charged by the government for film productions. We also want to increase the visibility of the people who are responsible for the industry within the government, be it through a separate agency or as part of the Department of Economic Development and Commerce. Our goal is to increase four-fold the contribution that the film industry makes to our economy. We also propose to establish a film promotion office in Los Angeles and promote incentives for production and post-production studies in Puerto Rico, along with other economic incentives that boost this industry. Teachers and students in Puerto Rico’s public schools have now been given computers. What’s your plan to maximize their effective use for educational and technological advancement? In my view, the most important aspect of computers is the Internet, which is a window to the world. It’s not so much that each child should have an individual computer but that each one has access to the Internet in an effective manner. How do we achieve that? We can have cyberlibraries in schools, available after school hours, and we can have cyberlibraries in community centers. I’m also proposing to have Internet expenses deducted as educational expenses for tax purposes and that we search for a way to allow computer [purchase] scholarships. We have to recognize that even though computers are less costly now, there is a sector of our population that doesn’t have access to them. How can the government facilitate access to computers for those people? We are proposing computer vouchers and programs with the private sector to provide access to computers to students. The greatest challenge is to improve teaching within the infrastructure. Anybody can set up a computer in a house or in a classroom but not everybody can provide software that is useful in the classroom. Although the growth in the government payroll has leveled off, it still remains high. What’s your plan to reduce the size of the government bureaucracy? That trend of leveling off government payroll is here to stay. There is a need for jobs, that’s a reality, and there is need for jobs among people who don’t necessarily have academic preparation. But I think we’ve made a big advances by taking government out of first place as a job alternative in Puerto Rico. That’s an achievement that has become institutionalized. I see government payroll staying at the current levels or decreasing through attrition in the next few years. I think that has been internalized by our administration and our party. I don’t see a return to the era of government as the main employer. I also see a more agile government. We also have to institutionalize a way to make public workers more ambitious, we have to promote and reward productivity, make the public labor force more professional, and at the same time improve the services we provide to taxpayers. Despite having come under attack at certain points during its implementation, even critics now concede that the privatization policy that has been pursued in the past few years has been generally good for the economy of Puerto Rico. Indeed, there are some who still advocate further privatizations such as that of the State Insurance Fund (SIF). What will be your policy regarding further privatization of government-owned assets or functions? I agree that having a greater private sector participation in the management of government services in some cases, or the total transfer of government goods to the private sector in others, has been successful. Frankly, I don’t see any chance for Puerto Rico Electric Power Authority (Prepa) to be privatized in the next four to eight years. That presents a challenge for Puerto Ricans because if we don’t become more efficient, this will affect our economic development and our well being. My responsibility as governor will be to figure out how to get that message across and how to make internal changes so that we can control energy costs. But I assure you, we’re not contemplating privatizing Prepa. With the SIF, I believe we need to give them a chance to modernize and challenge them to be more responsive to the demands of the people. I went through that with the Metropolitan Bus Authority (AMA) in 1993. At that time, people said AMA’s problems were unsolvable and that the authority was destined to disappear. Today, we see how AMA has improved and it’s not even among topics of public discussion when it comes to service or labor problems. The problems it had were not because of the employees but because of the management and the government’s public policy. My pledge is to work to modernize and reengineer the SIF. The AMA got scared when we privatized some routes and responded well to that pressure. The SIF is already scared, now it has to respond. What specific actions would you pursue to reduce the incidence of corruption both in government and the private sector? I think this is an issue that we have to address and a problem that I don’t want to minimize. But it’s also a political issue. We are committed to providing good public administration and oriented to achieve that goal. I also want to be very effective in appointing the secretary of Justice, choosing a person who will help me and the Puerto Rican people ensure that we have integrity at all levels. We also want to improve internal controls of all agencies through the Commonwealth Comptroller’s Office and the Government Ethics Office. We can use the ubiquitous Internet to publish results of bids so that citizens, journalists, or anyone can enter a government agency’s database and find out what the agency head and the politicians know. They should be able to find out about contracts, bids, change orders, travel abroad, or salaries of public employees. We just need to find a way to post the information people are interested in on in the Internet. That way, you open a window to help in public administration. What other government reforms would you implement? I would like to establish an 800 number to create a one-call system for the government to provide taxpayers with services. My proposal would allow you to call that number to find the status of traffic tickets on your license, for example. Many government agencies currently have citizen service centers but they fail in terms of inadequate telephone systems, inability to route all the calls, delays in providing service, and poor service schedules. But nowadays we have the mechanisms to provide services through the phone and channel the calls to the appropriate department. We also can have centralized systems to manage government e-mails and web pages. This means that the government can be more agile, more efficient and more responsive to citizens. Technology and telecommunications in the information age give you the tools to integrate all these advances into a privatized non-government unit that would coordinate services to citizens. Most business people in Puerto Rico place excessive permitting requirements and government regulations atop the list of competitive disadvantages in Puerto Rico’s business climate. What measures will you undertake to correct this endemic problem? We’ve made advances in the permitting problems, but we need to do more and information technology can help with that. We have to establish deadlines for approving all permits, we have to establish mechanisms to monitor the progress of permits and we can do that through the Internet. That way, you could check on the status of your permit and what was the last action taken on the project. That seemed impossible 10 years ago, but it’s very possible today. We have to develop a one-stop system for business through the Economic Development Administration (Fomento) so it can help companies obtain permits efficiently. One of the responsibilities of the Technology Department will be to integrate the information system to manage permits in Puerto Rico and update their follow-up. Why should a local businessperson vote for Carlos Ignacio Pesquera? From the answers I have given you throughout this interview it should be very clear why a business person in Puerto Rico, or any other citizen, for that matter, should vote for me. Anyone who wants to build on the achievements and progress of the last eight years, who wants a governor with a proven track record of achievements in public service and a commitment to keeping his promises should support me. If you believe that Puerto Rico still has a lot of work ahead to complete the rehabilitation of its infrastructure, that we have a lot of work ahead of us to complete the job of inserting Puerto Rico into its rightful place in the global economy, to complete the work of preparing us to prosper in the new realities of the information era, then you should definitely vote for me. Anyone who believes in more regulation, in bigger government bogged down by inertia and red tape, higher taxes, anyone who wants to return to the failed policies of the past should vote for my opposition. Those who believe in lower taxes, in continuing governmental reform, in the health reform, in a dynamic government that solves problems instead of allowing them to fester until they become crises, should vote for me. Those who want a strong, decisive leader, who is very aware of his roots, and loves and is committed to the People of Puerto Rico, should vote for me. The export led growth model has been successful development strategy for countries like Chile and the Asian Tigers. Do you believe it is important to diversify Puerto Rico’s external trade given the fact that the majority of the island’s exports are to the U.S. Mainland? What would you do to diversify trade between Puerto Rico and foreign countries? There is no doubt that Puerto Rico has been playing a predominant role in terms of international commerce, especially in the Caribbean and Latin America. Numerous local and international companies successfully manage regional operations from Puerto Rico. This experience should be utilized to expand even more exports to other markets outside of the U.S. mainland, converting Puerto Rico into a regional exportation hub between the Caribbean, Latin America, and the States. There is a huge market in the Caribbean and Latin America that we should exploit. I propose measures directed to develop this market and re-enforce Puerto Rico’s image as a global competitor, looking at new markets for our products. We will conduct a study to identify the infrastructure deficiencies that limit external commerce and take corrective actions and establish alliances with the Hispanic-American market in the States to promote the exchange of products and service. We will work to eliminate the application of Jones Act regulations on shipping to and from Puerto Rico. [Merchant Marine Act of 1920 requires merchandise transported between U.S. ports to be carried on U.S. registered, owned and operated vessels.] Certainly, the Jones Act is an unfair obstacle for Puerto Rico. We have great products, such as gourmet coffee, and we need to facilitate their commerce. The Jones Act is playing an important role that has always been always a problem. Telecommunications deregulation has been very slow to progress and companies haven’t been able to bring services and products available in other countries. What do you propose, to speed up the opening of the market and the arrival of new technologies? In terms of telecommunications, Puerto Rico is one of the few countries with a communications network almost 100% digital and an advanced telecommunications infrastructure. My administration will try to bring this technology to all Puerto Ricans for their personal and human development. I will support and promote measures that advocate new products, lower prices, and fair access for those people who don’t have money to pay. Similarly, we will develop an adequate technology infrastructure through a variety of measures, for instance, promoting--in an alliance with the private sector--the development of technology and telecommunications networks to make Puerto Rico competitive in the knowledge economy. We will co-sponsor, in collaboration with the private sector in the telecommunication industry, an expansion of bandwidth in the telecommunications networks between Puerto Rico and the States to promote electronic commerce and allow high performance computer facilities. We need to continue to technologically transform all fiscal and administrative areas of the government. In San Juan, we’ve invested about $15 million to systemize accounting, payments and other administrative areas. This needs to be our focus. We need to find new ways to create incentives directed to technological industries that are starting to flourish in the U.S. There is tremendous potential in this area. We need to create real incentives for them to establish start-ups in Puerto Rico. Not enough is been done in that area at the moment. Do you see film production as a viable component of Puerto Rico’s economic development? Under your administration, will the Film Commission receive more funding to increase foreign and local film productions? Puerto Rico’s film industry has been developing at a firm pace thanks to the talented specialists, technicians, and the conditions found in Puerto Rico. Without a doubt I will expand my support to the industry with resources and more incentives to both local investors to finance local productions and to encourage filming of foreign movies in Puerto Rico. I think, however, that the agency in charge of film promotion has to be restructured so that it may better respond to the interests for which it was created. Teachers and students in Puerto Rico’s public schools have now been given computers. What’s your plan to maximize their good use for educational and technological advancement? The access to education and technology are the keys to Puerto Rico’s individual and collective success. But this access has to come from a strong base. It is not responsible to say that students will have computers when the government still hasn’t been able to give them books. I propose books for all children and at the same time the use of computers, which the Education Department has provided, to teach our children to read and write while integrating them into the technological world. And all this will happen in a clean, modern school. I propose the creation of schools without borders to take education beyond the classroom, making the educational process more modern and attractive. This will allow the integration of parents in their children’s educational process while placing technology in homes. We propose a Web page for every school with basic information such as calendar of events, assignments, and library access. We will grant tax benefits to all parents with kids in schools that acquire a computer for the home. We will also establish educational programs for teachers through the Internet. Although the growth in the government payroll has leveled off, it still remains high. What’s your plan to reduce the size of the government bureaucracy? Although the government is not a business because its purpose is not to make money, but provide a social function, it needs to be seen with a business perspective in terms of productivity and efficiency. I am committed to offer an agile government, one close to its citizens, which facilitates process in a collaborative, non-adversarial environment. Government agencies and public functionaries need to share this plan and work to offer a government that Puerto Ricans want and deserve. I don’t believe the government needs to grow to achieve this, but it needs to implement new and better ways to meet its objectives in an efficient and effective manner. We will continue with programs such as Early Retirement to attain a smaller and more efficient government. Despite having come under attack at certain points during its implementation, even critics now concede that the privatization policy that has been pursued in the past few years has been generally good for the economy of Puerto Rico. Indeed, there are some who still advocate further privatizations such as that of the State Insurance Fund (SIF). What will be your policy regarding further privatization of government owned assets or functions? I believe privatizations conducted in the last few years are more than enough. At this stage, the focus should be towards effectiveness and gradually reduce reducing the size of the government while increasing salaries. The government salaries are so low that quality people don’t want to work here and gravitate to the private sector. Public assets should not be sold in an indiscriminate manner or utilized for party-line political motivations. It is wrong and deserves repudiation. I do believe in their effective management so they can be productive. What specific actions would you pursue to reduce the incidence of corruption both in government and the private sector? Everything that is happening now is shameful, people taking money in boxes, bribes. We need to clean up government processes. An important part of my government program is the Ataque Frontal a la Corrupcion y Castigo Seguro a los Corruptos (frontal attack against corruption and sure punishment of the corrupt). This section contains a series of measures to eliminate bad management of public funds and assigning blame for those responsible. Some of the initiatives include the creation of a Blue Ribbon Committee to evaluate the largest transactions and the naming of fiscal general of Puerto Rico with a fixed term of 12 years, with economic and functional autonomy. We need to take immediate action so that people know this will not be tolerated. We need to bring back pride in public service. And most important of all, the government needs to appoint a secretary of justice who is respected, one of character, with an irreproachable record. What other government reforms would you implement? We will change the focus given to the war against drugs, creating a Drug Control Office that will elaborate and strategically plan projects to reduce the drug problem. Puerto Rico’s drug problem affects families and society as a whole. When we can successfully manage this problem, our development as a country will improve. Similarly, the package of economic development proposals for the various industries which I have termed the New Economy, are geared towards achieving a true change and a positive impact in our economic environment, the results of which will be the creation of more and better jobs for our citizens. Most businesses in Puerto Rico place excessive permitting requirements and government regulations atop the list of competitive disadvantages in Puerto Rico’s business climate. What measures will you undertake to correct this endemic problem? I agree with the comment. I believe that permitting process in Puerto Rico is not only an obstacle for the island’s economic development, but also contributes to deepening the corruption problem that exists in Puerto Rico. I have declared war on unnecessary processes and excessive bureaucratic steps. Governments have the responsibility to facilitate, not obstruct, to be fair, not unfair, and to promote equanimity, not inequality. Anything that distances us from these objectives will not have room in my government. As part of the Popular Democratic Party program, we’ve proposed implementation of fast tracking and reduction of permitting and endorsement. We will provide government agencies in charge of these processes the necessary resources and personnel to achieve this goal. Why should a local business person vote for Sila Maria Calderon? I offer stability and aplomb in terms of government public policies combined with an aggressive and proactive vision of economic development and a responsibility to quality of life, nvironment, and preservation of our what we are. As we look at the future, our public policies and how we govern impact the type of country we want to have. I want to give my country an environment of dialogue, concordance, and co-existence and provide the necessary conditions for economic development to flourish outside of ideological confrontations and extreme party-line politics. Most importantly, providing clean government, administrated as a private sector but with the discipline that I’ve imparted in the jobs I do, which will contribute to the stability. This Caribbean Business article appears courtesy of Casiano Communications.
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