Dear Don Jíbaro
I know you like to be informed about Puerto Rico... Allow me to share an
experience I had while down there...
I used to drive out on the island... You could see the ocean and the beautiful
views...and you could stop off one of the little restaurants along the
way...enjoy a cold beer, a nice steak... Now, you see nothing but housing
developments and the traffic is horrible.
My grandfather was telling me about the changes in Puerto Rico over the last
several years.
Puerto Rico is existing in the gray area of non-statehood, a
sort of vassal in America's empire, a prize in a long-forgotten war with Spain.
Puerto Ricans have voted many times before on the issue of statehood. The voting
has been very close. So far, the status quo has won out. But the last election
fiasco was eerily similar to the U.S. presidential election in 2000, with the
Supreme Court of Puerto Rico casting the deciding votes, along party lines, that
sent their man into office. Statehood lost its closest contest yet.
Still, Puerto
Ricans seem to love SUVs and fancy cars as much as continental Americans.
Consumerism is also in vogue, with retail chains such as Walgreen's, JC Penney
and Macy's enjoying success here. Plus, nearly 70% of the island's workers are
employed in service industries.
And Puerto Ricans, too, have their own housing boom.
The economy of Puerto Rico is likely the region's most dynamic economy. Nearly
every major U.S. and European pharmaceutical company has significant operations
on the island. Other companies and industries also find the island attractive
for a host of reasons: the population is largely bilingual and educated; there
are tax incentives to move operations to Puerto Rico; nearly 5 million tourists
come here every year and spend more than $3 billion; and it is a bridge to the
rest of Latin America.
In order to capitalize more on the island's appeal, the government has spent
more than $13 billion in the last ten years improving the infrastructure. There
is, for example, a new deep-water port, urban train, and coliseum; along with
more common amenities like better signage and expressways.
My grandfather notes the passing of sugarcane fields and farming from the
landscape. Instead, shopping malls, hotels, condominiums and auto malls are
popping up all over the island. And new housing developments, too - sturdy
cement houses painted in the pastel colors favored in the tropics, like cotton
candy pink, lime green, sunflower yellow and sky blue. It's good, however, that
nearly 75% of Puerto Ricans own their own
home.
It's no wonder prices are rising. Population density is among the highest in the
world, with nearly four million people living on an island of about 3,500 square
miles. By some estimates there is a housing shortage, with 100,000 more units
needed.
Still, as in the mainland United States, the housing bubble is also being fueled
by cheap credit. Curiously, while late payments occur four times more often than
on the mainland, Puerto Ricans are less likely to wind up in foreclosure.
Basically, the islanders have succumbed to the temptation of using their home as
an ATM machine - just like Americans., but I think that when the housing bubble
finally finds its pin, it will be like an ATM machine that no longer dispenses
cash.
I wait for an epiphany...
Regards,
Cristóbal Mayorca
~~~~~~~~~~~~~~~~~~~~~
Dear Cristóbal...
I'm very impressed by your knack for statistics and ease of writing... I'm very
impressed. Keep in touch.
DJ
