May 14, 2021

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The fiscal challenge is in the hands of Puerto Rico

The United States Supreme Court put an end to the uncertainty over the constitutionality of the appointments to the Oversight Board by declaring that both its members and functions are constitutional. Such an important judicial opinion should give way to an operational frame seeking to rebuild Puerto Rico.

Since February 2019, when the Boston First Circuit Court of Appeals declared the Board’s appointments unconstitutional, there had been questions regarding what would happen to the Fiscal Plan and restructuring agreements reached with several creditors, should the federal Supreme Court issue such a ruling.

Although the Boston court’s ruling did not invalidate the decisions already made by the Board and allowed it to continue operating, that decision brought an inevitable sense of instability until the U.S. highest court endorsed or definitively reversed that decision.

Now that the Supreme Court has ruled, it is time to look ahead and undertake the tasks of the difficult challenge which now is largely in the hands of the island.

Given the challenges of the pandemic and social distancing measures seeking to contain the spread of the virus, the Board has eased the terms originally established, extending the deadlines set for government agencies and municipalities. This does not mean that, once the emergency is over, we do not have to face the reality of fiscal discipline, implementing already stipulated regulations, and the economic revival through close collaboration between the Board and the government of Puerto Rico.

That is one of the determining principles of development: a framework of stability and trust so that the island can recover its administrative credibility and therefore be able to find its place again in several areas, such as manufacturing, especially in the field of pharmaceuticals and other industries where we have experience and human capital. This is an opportunity that has opened up in the misfortune of the pandemic, and it would be very irresponsible of us not to take advantage of it. The federal government, which, with the elimination of Section 936, brought us somewhat into this abyss, has now a restorative opportunity.

Meanwhile, the Wanda Vázquez administration must swiftly assume its responsibility with the fiscal and economic agenda. This includes working to enable the proper mechanisms and local incentives to make Puerto Rico a competitive place for capital investment.

Disconnection and poor performance in many public agencies- seen at the peak of this labor and public health crisis – hinder the distribution and investment of federal funds, which are currently abundant, but must be managed according to federal clauses and conditions.

We know that the government has been dragging along layers of bureaucracy and inefficiency for decades, which have intensified in recent terms and reached the limit of administrative disruption during the administration and abrupt resignation of former Governor Ricardo Rosselló. Since then, we have virtually had an inherited and incoherent government at the most critical moments.

Now, however, we can grow.

Having clarified the terms of the government’s relationship with the Board – which will also apply to the next government administration in 2021 – people must see initiatives and a scenario that stimulates collaboration and work.

This is what the island is called upon to do amid the current circumstances, and those that have yet to be experienced in the remaining months of this difficult year.

We are almost five months away from general elections and the political debate tends to deviate from the island’s great objectives. We have to firmly fight against this to ensure that the political class assumes its responsibility to restore hope to the people.

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