Puerto Rico
Economy

Puerto Rico is classified as a high income economy by the World Bank and International Monetary Fund. It is considered the most competitive economy in Latin America by the World Economic Forum and ranks highly on the Human Development Index. According to World Bank, gross national income per capita in Puerto Rico in 2020 was $21,740. Puerto Rico's economy is mainly driven by manufacturing (primarily pharmaceuticals, textiles, petrochemicals and electronics) followed by services (primarily finance, insurance, real estate and tourism); agriculture represents less than 1% of GNP. In recent years, it has also become a popular destination for MICE (meetings, incentives, conferencing, exhibitions), with a modern convention center district overlooking the Port of San Juan.

Responsibility for San Juan port inspections lies with PPQ. So high is the volume of cargo traffic that between 1984 – 2000 the San Juan PPQ station recorded 7.74% of all interceptions, #4 in the country, #2 for insects and #3 for pathogens. Most species are originally from South America or elsewhere in the Caribbean due to PR's position as an intermediary on the way to the mainland. This is one of the worst locations for cut flowers and other plant parts – both in terms of number of problems and diversity of species – for insects in plant parts in baggage, and for pathogens in plant parts in baggage and cargo. Pathogen interceptions were dramatically (17%) higher 1999 – 2000 than in 1985 – 1986.

Puerto Rico's geography and political status are both determining factors for its economic prosperity, primarily due to its relatively small size; lack of natural resources and subsequent dependence on imports; and vulnerability to U.S. foreign policy and trading restrictions, particularly concerning its shipping industry.

Puerto Rico experienced a recession from 2006 to 2011, interrupted by four quarters of economic growth, and entered into recession again in 2013, following growing fiscal imbalance and the expiration of the IRS Section 936 corporate incentives that the U.S. Internal Revenue Code had applied to Puerto Rico. This IRS section was critical to the economy, as it established tax exemptions for U.S. corporations that settled in Puerto Rico and allowed their insular subsidiaries to send their earnings to the parent corporation at any time, without paying federal tax on corporate income. Puerto Rico has been able to maintain a relatively low inflation in the past decade while maintaining a purchasing power parity per capita higher than 80% of the rest of the world.

Academically, most of Puerto Rico's economic woes stem from federal regulations that expired, have been repealed, or no longer apply to Puerto Rico; its inability to become self-sufficient and self-sustainable throughout history; its highly politicized public policy which tends to change whenever a political party gains power; as well as its highly inefficient local government which has accrued a public debt equal to 68% of its gross domestic product throughout time. Puerto Rico currently has a public debt of $72.204 billion (equivalent to 103% of GNP), and a government deficit of $2.5 billion.

By American standards, Puerto Rico is underdeveloped: It is poorer than Mississippi, the poorest state of the U.S., with 41% of its population below the poverty line. However, it has the highest GDP per capita in Latin America. Puerto Rico's main trading partners are the United States, Ireland, and Japan, with most products coming from East Asia, mainly China, Hong Kong, and Taiwan. Puerto Rico's dependency on oil for transportation and electricity generation, as well as its dependency on food imports and raw materials, makes Puerto Rico volatile and highly reactive to changes in the world economy and climate.
punctuation:no_comma, oulipo:avoid_letter[e]