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If there is a monumental paradox in Puerto Rico, it is the behavior of companies that are helpless to exercise their ability to create added value and contribution to the Island in the absence of direct economic sponsorship from the government sector. This increased to significant levels after the bankruptcy of our government.
This leads us to deep reflection.
It suggests that such organizations would not exist or would not be able to compete in our entrepreneurial ecosystem, without this government subsidy. I am not talking about productivity incentives which allow us to stimulate foreign and local private investment. It is not the attraction of foreign capital pouring into our economy because of the attractive environment that the government sector must create.
The measure was unanimously supported by the committee that considered it, that is, by all the political delegations present.
I am talking about subsidies to corporate inefficiency. How we gave up on promoting economic freedom, capitalism with a human face, in exchange for government sponsorship of private management.
Let us not forget that government sponsorship poured into inefficient private companies is a dislocation of resources that should have been channeled to better education, better roads, better energy services, or simply FEWER TAXES for our citizens.
The private sector is fighting hard for the urgent reduction of the high level of government intervention and regulation of the country's productive processes. This is what is fair and necessary.
It is because of this fierce struggle that we tirelessly demonstrate for a better tax system. We fight against the perpetuity of wasteful public spending justified by excessive tax collection. We fight for better roads and government infrastructure built by the millions of tax revenues confiscatory generated to families and businesses. We tirelessly demand a better energy system, for which we incur enormous debt. We still do not know how much debt we will be obliged to pay in perpetuity. Uncertainty that suffocates us.
These “private” companies that depend 100% on public subsidies, through their actions, defeat our aspiration for less government. They justify their actions by maintaining government intervention, and in increasing government regulations in the face of the sad reality of a public monopoly turned dysfunctional quasi-private oligopoly.
However, we can cite tireless examples of how the private sector has done the right thing for our economy and how it should be encouraged. We have shown that having a centrally planned and highly interventionist economy has failed.
Let’s see.
The sale of Telefónica de Puerto Rico's assets allowed us to escape the technological obsolescence of telephone services on physical landlines. Hurricane Maria demolished that infrastructure. Today we enjoy free competition and market conditions in digital, cellular and advanced telephony. Total revenues could have been $2 billion. However, opposition to privatization cost us $1 billion that was reallocated to education in the country.
Discarding government intervention, such as the “Super Warehouse”, was the right thing to do.
Selling Navieras de Puerto Rico, another failed measure, was the right thing to do.
We also have very good examples of how the government has taken a serious problem of the citizenry and, with the effective help of the private sector, has solved or dramatically diminished it.
Example? The digital CESCO system is a significant achievement of what the government system, when supported by private sector experts, executes correctly.
Unfortunately, we also have an example of how the privatization attempt was executed incorrectly. Poorly implemented privatization is the worst-case scenario. Never forget it, and avoid repeating it.
Let us conclude then: privatization, or neoliberal measures, these 21st Century capitalist initiatives, may well solve the economic inconsistencies we face in Puerto Rico. We have an obligation to empathize with those who can sensitively and empathetically address our country's needs.
We are a country struggling to overcome an unaffordable bankruptcy. Specifically, in the case of the bankruptcy of the Puerto Rico Electric Power Authority, if the issue is not handled properly, the national collapse will be total.
It is fair and necessary for us to fight for the country we dream of. And we will only achieve this when the private sector is totally privatized.
This article was originally written and published in Spanish in El Vocero.
