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Integration into the U.S. system -- including the use of the U.S.
dollar, U.S. interest rates and U.S. bond markets -- helps keep Puerto
Rico 's economy humming along with 3 percent annual growth.
It's little surprise then that Puerto Rico has been enjoying the fruits
of the longest peacetime economic expansion in U.S. history. The island
"has mirrored the U.S. economic turnaround since 1991," noted Standard &
Poor's.
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SAN JUAN, Puerto Rico (AP)-- [Gov. Pedro] Rossello and the Puerto Rico Manufacturers Association said they will lobby together to try to revive a measure known as Section 30a that provides a federal tax break to U.S. companies with operations in Puerto Rico , based on the amount of wages they pay to islanders.
Congress voted in 1996 to phase out a larger package of tax breaks that includes 30a.
Puerto Rico needs federal incentives for companies to create jobs, the manufacturers group argues.
While supporters of Puerto Rico 's commonwealth status see the federal tax breaks as a cornerstone of U.S.- Puerto Rico relations, others consider them incompatible with statehood.
Not so, said Jaime Morgan Stubbe, the director of the government's industrial development agency.
"Whether a state could have a special treatment, my answer is yes," he said. "There are precedents. That would have to be a subject of negotiation during the transition period to statehood." Dow Jones International News
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Making IRS Section 30A Permanent for U.S. Firms Operating in Puerto Rico is Not the Best Way to Stimulate Sustainable Development on the Island
In the past, an unhealthy reliance on tax credits created a crutch preventing the public sector reforms and economic liberalization needed to make Puerto Rico's economy productive and competitive. Puerto Rico should avoid a return to tax gimmick strategies, and push forward with a package of reforms that have demonstrated proven success: deregulation, privatization, fiscal reform, and heavy investment in people and infrastructure.
In contrast to dire predictions, the Puerto Rican economy has not fallen into recession nor has unemployment skyrocketed since Congress voted to eliminate Section 936 in 1996. In fact, the economy continues to grow at a moderate rate and employment is increasing. This performance reinforces Congress' decision to repeal the ineffective and costly tax credit, and demonstrates that Puerto Rico can and should do without it.
Puerto Rico's economic performance also reflects the success of badly needed government reforms initiated by Governor Rossello under the New Economic Development Model. These reforms have already yielded impressive results, reforming the fiscal system, promoting deregulation, investing in infrastructure, and reforming the public sector.
The government has already made significant progress. It
would be unfortunate if making section 30A permanent were to undermine the
long term sustainability of the successful reform efforts now underway.
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Nation's Governors Call on Congress to Pass Puerto Rico Self-Determination Legislation
"[I]n harmony with its long-standing
acknowledgement of the importance of self-determination by the
people of Puerto Rico as to the status of Puerto Rico, the National
Governors' Association (and the Southern Governors' Association)
urges the 106th Congress to enact legislation that will, no later
than the year 2000, provide a mechanism for political self-determination
by the American citizens who reside in Puerto Rico."
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SAN JUAN, Puerto Rico (AP) - Six weeks ago, the
Reliquary, a little-known literary magazine, began a letter-writing
campaign to introduce a Puerto Rican writer [Enrique Laguerre]
to organizers of the Nobel Prize in Sweden.
Late last month, the island's House and Senate
issued a resolution signed by Gov. Pedro Rossello urging his
nomination.
Laguerre's 31 historical novels explore the
cultural and economic struggles of a Spanish-speaking island
that this year marked a century since U.S. troops wrested it
from Spain - setting in motion a still-unresolved identity crisis.
The Institute of Puerto Rican Culture sent
its official nomination to the academy last month, along with
copies of every major work by Laguerre. Friends donated out-of-print
editions to the cause.
"I, personally, am joining with many
other Puerto Ricans who are in favor of this nomination,"
Rossello said. "This is a just petition and it reflects
the depth and validity of (Laguerre's) work." Chris Hawley
AP
An Open Letter to Congressman Gutierrez:
If you truly feel that independence is the
best option for Puerto Rico and that being Puerto Rican and American
are mutually exclusive, then you really should put your money
where your mouth is and come live in Puerto Rico and fight for
your ideals.
It seems somewhat hypocritical for someone
who is living the American dream to the extent you are to deny
that same dream to the millions of Puerto Ricans who do call
this lovely island home. Please stop undermining our struggle
for equality. You are not our elected representative. -Roberto
Guzman, THE SAN JUAN STAR
Since the signing of the Treaty of Paris brought
the war to its end, Puerto Rico has remained a U.S. territory
and its inhabitants have lived under the Constitution of the
United States of America. During that time, Puerto Rico and its
people have come to embrace the United States Constitution and,
in particular, the individual liberties protected by the Bill
of Rights. As a result, Puerto Rico has broken, culturally, from
its Latin roots over the last one hundred years. JAIME PIERAS,
JR., United States District Judge, Zappa v. Cruz
[I]nstead of asking why Congress still has
no plan to end Puerto Rico's current state of political limbo,
many pundits reacting to a recent status vote held under local
law in Puerto Rico seem puzzled because statehood supporters
in the territory have not abandoned their cause after failing
to win a majority.
(I)nstead of being puzzled because elected
statehood leaders in Puerto Rico are asking Congress to act on
the basis of the recent plebiscite, let's remember that America
became the greatest nation in the history of the world by empowering
people with the tools for informed self-determination. Sooner
or later Congress will have to do the same for Puerto Rico, and
the sooner the better for Puerto Rico and the nation as a whole.
-Dick Thornburgh
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The current governor of Puerto Rico had sought statehood as an important step in his economic-reform effort, turning the economy from an industrial base to a "knowledge" base. The voting population decided otherwise. However, his ambitious plan has already seen some success, since the privatization of many government companies has resulted in lower prices and improved service.
The government seeks to promote technology-based businesses to build on the strength of Puerto Rico's growing pharmaceuticals business.
The reforms emphasize the service sector, and a new program of tax incentives is especially generous to companies investing in education, training, research and development.
The government sees ultimate success down the road, comparing the current reforms to "Operation Bootstrap," the policies under which the island moved from an agrarian-based to an industry-based economy. Those reforms, the government points out, took a decade or two to take effect.
Financial Times Survey: Puerto Rico
Washington -- The White House indicated Saturday
that the "none of the above" winning vote in the Dec.
13 island plebiscite has little or no meaning for the ultimate
outcome of Puerto Rico's political future.
The White House and Gov. Rossello were in
sync Saturday on the confusion wrought by the Dec. 13 plebiscite
results.
Rossello...said that Congress must "step
in and recognize its responsibility" because "local
politics distorts the discussion and decision on status. We have
to make sure that Congress responds" with clear status choices
for island voters, the governor said. -Robert Friedman, SAN JUAN
STAR
WASHINGTON - In the strongest Clinton administration message
on commonwealth status yet, both the State and Justice departments
have maintained that nothing has changed politically in the U.S.-island
relationship since 1952 and that "Puerto Rico remains a
territory" subject to the full powers of Congress.
"The status of Puerto Rico since the creation of the
commonwealth system is that Puerto Rico's status remains the
same," attorneys for both agencies said in a brief filed
in the U.S. Court of Appeals for the District of Columbia.
The brief continued: "Although Congress, through the
1950 act, authorized the process for democratically instituting
a local constitutional government in Puerto Rico, Congress retained
the authority to legislate with regard to Puerto Rico."
The attorneys maintained that the courts also have indicated
that, "Puerto Rico's status in relation to the United States
remains the same following the establishment of the commonwealth
system."
Washington, D.C., March 2 -- Congressman José
E. Serrano (D-NY) today praised Puerto Rican baseball star Orlando
Manuel Cepeda on his induction into the Baseball Hall of Fame.
Cepeda is the second Puerto Rican elected
to the Hall of Fame, behind baseball legend Roberto Clemente,
admitted in 1973.
Congressional Sponsored Plebiscite
Necessary
The 1998 plebiscite confirms the need for
Congress to ascertain the will of the people of Puerto Rico among
options Congress is willing to consider. This can be accomplished
only if Congress sponsors a referendum under Federal law and
informs the voters of the terms for continuing the current status
or changing to a new status.
The Land that Would be a State: Divided over
Statehood, Puerto Rico's Economy Shows It's Practically Joined
Up
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The Statehood Movement
