Statehood will be beneficial for Puerto Rico economically. It really is as simple as that.
How do we know?
First, we can see that every former territory became more prosperous when it became a state. Territories that faced war and famine have become prosperous states. Just as college students can expect to be more prosperous after they graduate, territories can expect to become more prosperous when they become states.
Second, Puerto Rico would be equal to the other states as soon as she is admitted to the Union. This means that there would be more funding, from highways to healthcare. This would erase some of the current disadvantages and allow Puerto Rico to focus on economic development instead of coping with crises.
Third, statehood will make Puerto Rico more appealing to investors. The stability of statehood will allow Puerto Rico to make long-term plans without the possibility that a status change or Congressional action will change the terms for investors. Infrastructure improvements will allow businesses to build on the Island with confidence that they will have access to supply chains and logistics they need.
An example: Bahia Urbana
This week, a contract with outside investors to develop Bahia Urbana has been delayed by the Financial Oversight and Management Board. This is a plan that has been in progress for decades, and the contract would bring in funds for Puerto Rico’s Convention District.
There is a policy that requires all contracts over $10 million to be approved by the FOMB. They must also have competitive bidding, whereas the current Bahia Urbana contract was born from an idea developed by private investors.
Imagine approaching a city for a lease on property for a desirable business development and then, after working out the details and making an agreement, learning that you have to go through a competitive bidding process with other companies who did not have the idea you had.
We don’t know all the details, but we are confident that this would not happen in Chicago or any other great American city.
The extra layers of uncertainty interfere with Puerto Rico’s economic development.
Puerto Rico has advantages
Puerto Rico already has some real advantages as a location for businesses.
For example, Puerto Rico is in a good position for pharmaceutical manufacturing. Puerto Rico already has 50 pharmaceutical and 30 medical device manufacturing sites in place, representing a dozen of the world’s top 20 producers.
Puerto Rico exports more pharmaceuticals than any U.S. State — twice the amount as Indiana, the next contender.
Nearly one third of workers in manufacturing in Puerto Rico are engaged in making medical products. This highly skilled and experienced workforce puts the Island in a strong position to entice more medical manufacturers to set up shop in the territory. Puerto Rico also has more than 100 accredited universities, and is well known as a center for science education. A bilingual workforce is another strength.
Puerto Rico also has advantages for tourism, information technology, and agriculture, as well as other industries. In fact, with the level playing field that statehood will provide, Puerto Rico should be a standout among states.