July 14, 20222:03 PM

Puerto Rico urgently needs a facilitating government and a decentralized economy

Historically we have assigned to the government responsibilities that are not conferred to them. For decades the government has been enthroned in our society as the welfare state, which has the responsibility to satisfy and supply the basic needs of its citizens.

One of the big problems we have in Puerto Rico is the worldview that the population has in relation to the functions of the state. We have become accustomed to seeing the government as the one that has to solve social problems, we justify its meddling in economic aspects and we even pay homage to politicians by treating them with certain airs of royalty. This worldview has brought us to the serious economic problems of a structural nature that we currently have. We have wrongly accustomed our citizens to the government solving everything for us, leading our politicians to fall into the trap of populism. This populism is characterized by appealing to the feelings and passions of the voter to mobilize the mass vote based on who gives me more benefits. This Keynesian economic model that prevails in Puerto Rico has led us to the bankruptcy that we have been suffering for the past 15 years.

The frequent blackouts, the increase in electricity rates and multiple deficiencies in basic services constantly call into question the efficiency of the government. Nilda Pérez believes that Puerto Rico needs a facilitating government that promotes a decentralized economy. (Stephanie Rojas)

For decades we have seen a giant government, which imposes more and more taxes to sustain itself and continue hoarding our society with its tentacles. In order to comply with the debt adjustment plan and to be able to get Puerto Rico out of bankruptcy, we need to change our paradigms and begin to rethink the functions of government. I have to admit that at least from 2006 to the present, the government has reduced its payroll from 301,000 to 193,000, according to the analysis of the economist Heidie Calero. Although this reduction must be evaluated from the perspective of contracting spending, it is certainly a good step towards reducing the government. Not only is it important to transform the government’s organizational structures, but we must also work hard to educate our citizens so that they change the way they see and interpret the functions and responsibilities of government.

Analyzing what has happened in the past few weeks with the approval of various projects that have become law, it makes us see clearly that we have an urgent need to re-evaluate the philosophical bases on which our politicians make decisions. Law 52-2022 was approved, which in its article 86 intended to set new appraisal requirements and other procedures for real estate transactions. This law was declared unconstitutional by the court of the first instance of San Juan for imposing an onerous cost on citizens who wish to sell their property. The mere fact that this disastrous project has been approved by both legislative branches and that it was signed by the governor should alert us to the paradigms that predominate in politicians who currently hold public positions in the legislative and executive branches. Not only the approval of this law should raise our flag but also the approval of Law 42-2022, the law of the misnamed labor reform. This law imposes onerous regulations on companies, limits economic growth and goes against the approved debt adjustment plan.

To all this, we must add the embarrassing show of force of power and lack of consensus that the presidents of the House and the Senate staged with the approval of the budget for the fiscal year 2022-2023, which ended with the approval of the budget of the Fiscal Oversight Board. All these actions of our politicians in the past few weeks should raise the flag that we have not learned our lesson from the bankruptcy of Puerto Rico.

We urgently need to educate about the true change of worldview that we need in our society. Puerto Rico needs a facilitating government that promotes a decentralized economy, where production and markets are governed by supply and demand. When one studies emerging countries with high economic development and innovation such as Singapore, Ireland, Israel, Switzerland, among others, we see effective and facilitating governments. When a government plays the role of facilitator, we see a vibrant and developing entrepreneurial system as a result.

It has been proven that where there is an environment that simplifies freedom of initiative and free competition, more technologically developed and prosperous societies are generated. With such good professionals and human capital that we have in Puerto Rico, we have failed to create unity of purpose and an orchestrated vision for our economic development. It is time to act for the good of Puerto Rico and future generations.

This pie appeared originally in Spanish in El Nuevo Dia

Las exigencias impuestas convierten a los notarios en agentes del CRIM por medio de la planilla que se rinde al Departamento de Hacienda. Lo interesante es que ni el CRIM ni Hacienda avalaron o respaldaron esta medida, señala Díaz Olivo


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