The key to improve the economy and reduce the exodus in Puerto Rico

At the moment, the island is the U.S. jurisdiction with the least economic liberty.

Axel Kaiser (Nahira Montcourt)

“Economic liberty is the sole responsibility of Puerto Ricans.”

This was stated by the Chilean-German lawyer and author Axel Kaiser during his lecture "The poverty of nations and how to overcome it" that he gave at the "Retail Out of the Box" event of the seventh edition of the annual forum of the Association of Retail Trade (ACDET) held this morning at the Coca Cola Music Hall, in San Juan.

According to Kaiser, economic liberty - or the right to generate income in an occupation of free choice without unnecessary government interaction - is an attainable reality for the island. This would increase per capita income, wages, job opportunities and decrease the exodus, a major problem that has disrupted the workforce and pushed out local talent.

However, the island is the jurisdiction with the least economic liberty among the 50 U.S. states, according to a study by Canada's Fraser University after evaluating government spending, subsidies, inefficient spending, tax and regulatory problems, among others.

"This is disastrous," the speaker commented. "I don't know how to explain it. It's very bad, very bad. This is what you have to worry about," warned the writer and Doctor of Philosophy from the University of Heidelberg in Germany.

In addition to this reality, the 2020 Census revealed that the poverty rate in Puerto Rico is 40.5%.

Kaiser insisted that this reality is not one that cannot be escaped. It all starts with changes in mentality so that the citizenry moves politicians to work on behalf of the people and to legislate low taxes and fiscal transparency. Access to data that compares Puerto Rico's situation worldwide is also necessary, he said.

"The reason why our countries fail is not because the big countries abuse us, they put their feet on our backs. That is the mentality that will never allow us to get out of our problems. That is the mentality that makes us poor," said the speaker.

"In the end, (achieving economic freedom is the product of) a work of persuasion for the entire citizenry and, the more people begin to repeat the discourse that this is what is needed, the more likely it is that politicians will listen and implement these reforms because, if not, (the people would not vote for them), they would not (support them), and (politicians) always like to be with the wave that is in fashion, they don't like to be against it", the expert explained to Primera Hora, stressing that "it is an issue that has a lot to do with the role of the study centers, of the intellectuals and of the people who give their opinion to convince the citizens and the political class".

Economist, lawyer and writer Axel Kaiser (Nahira Montcourt)

The benefits of economic freedom are already evident in the countries that enjoy it. The 10 happiest countries in the world, according to the 2023 World Happiness Report of the United Nations (UN), are particularly those with greater economic freedom: Finland, Denmark, Iceland, Israel, the Netherlands, Sweden, Norway, Switzerland, Luxembourg and New Zealand, respectively. Puerto Rico does not even appear among the 137 countries categorized in this list, while the United States came in fifteenth place.

The colony: a benefit?

Kaiser considered that Puerto Rico has an advantage over its Latin American neighbors precisely because of its colonial status and its close relationship with the United States. He also believed that political independence is not a prerequisite for economic freedom.

"Many Latin American countries would like to have the situation that Puerto Rico has, because in short, it guarantees that you will have a stable currency, the dollar, (most Latin American countries have had a serious inflation problem, historically they have had serious inflation problems), it guarantees that you have the free trade of the largest economy in the world, although they can put some barriers, it guarantees that you have a certain jurisdiction of a developed, advanced country, which is above what the Puerto Rican political class does, to avoid major disasters," he told this newspaper, recalling that Puerto Ricans have "to send remittances, move freely", "certain control at the judicial level" and a U.S. passport.

"I don't believe that for Puerto Rico to do well it has to be independent. That is a complete and total fallacy. What it needs is to make the reforms that objective indicators show are not being made, because the Puerto Rican political class is so incompetent that it is not even willing to make the changes it can make to make Puerto Rico do better," he continued, arguing that the U.S. relationship with any Latin American country is positive.

When Primera Hora questioned his position of considering the U.S. as an absolute benefit, both for Puerto Rico and for other countries, Kaiser clarified that it is "in the sum" of benefits generated by this relationship that the positive results are achieved. However, there are certainly negative characteristics of this relationship between the United States and Puerto Rico, especially with the transfer of federal funds, which he considered "generates a certain culture of dependence that is not positive."

This article was published originally in Spanish in Primera Hora.

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