Statehood, Ownership, and Prosperity

We believe that statehood will bring prosperity to Puerto Rico, just as it has to other territories which have become states. Part of this is the evidence of history. Economic progress has followed statehood in every territory so far which has become a state. Many were in tough financial situations, but the connection with the other states has provided economic stability. There’s no reason to think that Puerto Rico will be different.

Who owns Puerto Rico’s businesses?

Michael Roberts, writing at Quora, brought up another point:  the question of ownership.

“You’ve probably bought Domino sugar,” he wrote. “It’s one of the biggest sugar brands in America. It started out as a Puerto Rican company, selling sugar grown in Puerto Rico – but the owners of the company weren’t Puerto Rican; they were headquartered in New York. So the profits from that Puerto Rican sugar didn’t bolster Puerto Rican roads, didn’t endow Puerto Rican universities, didn’t build Puerto Rican houses for Puerto Rican management – all that happened in New York.”

Roberts offered another example.

“Puerto Rico Coffee Roasters owns some of the best-known brands of Puerto Rican coffee, including Yaucono. The roaster is here in Ponce. What most people don’t know is that PRCR is an 80% subsidiary of Coca-Cola. So when people buy their Yaucono coffee, that profit doesn’t stay on island – it goes to Atlanta. Meanwhile there are price controls at every stage of coffee production in Puerto Rico to ensure that Puerto Ricans can afford coffee (which is culturally quite important here) – those price controls make it very difficult for local farmers to compete with large corporate farms owned by Coca-Cola. Result: the coffee industry has been steadily dying for decades.”

These companies may be strongly associated with Puerto Rico, but they don’t belong to Puerto Rico.

What do multinationals get from Puerto Rico?

Other major corporations benefit from Puerto Rico without giving much back.

Consider Microsoft. They washed millions of dollars through Puerto Rico to avoid paying corporate taxes. Microsoft employs about 127,000 people. But they provided just about 400 jobs on the Island. Microsoft has no allegiance to Puerto Rico.

Another example? Walmart, the largest non-government employer in Puerto Rico. In their native state, the company and the family that owns it have built a world class art museum, a performing arts center, a luxury hotel, and a culinary school to staff the high priced restaurants that serve the vendors who visit their corporate headquarters. They support roads, the local airport, local schools and universities, and the community in general to the tune of multiple millions of dollars.

In Puerto Rico, their stores are profit centers. Puerto Rico imports about 85% of its food, and Walmart is profiting from that fact. Walmart donated $5 million for hurricane relief and has other charitable ventures in Puerto Rico, but that’s charity. Much of those funds went toward rebuilding Walmart stores and caring for Walmart associates. Walmart has solar power arrays on their stores’ roofs in Puerto Rico; they didn’t finance work on the Island’s electrical grid. Walmart doesn’t invest in Puerto Rico’s infrastructure.

Are these evil corporations?

We’re not saying that. A business will naturally hesitate to put down roots on an island which could become a foreign country at any time. Pharmaceuticals, the biggest manufacturing base in Puerto Rico, benefit from the Made in the USA label a Puerto Rican factory can provide. Big corporations naturally look for tax loopholes. Profits are the deciding factor in corporate decision making.

But an unincorporated territory is not as appealing when it comes time to settle in and invest in the community. The status could change with little warning. A corporation could find itself in a foreign country.

A state has a permanent status. It won’t become an independent nation or a Sovereign Free Associated nation, putting the corporation into a legal quagmire. It’s worth a long-term investment.

Puerto Rico should have entrepreneurs and local ventures. But being open for business as a state will also draw larger corporations who are willing to invest, not just to put their feet under the table.

Tell your legislators that you want statehood for Puerto Rico.

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