Friday, February 27, 2015

Congress can help ease Puerto Rico’s debt crisis - WP

Congress can help ease Puerto Rico’s debt crisis

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This Jan. 28, 2015 photo shows an aerial view of the south side of the Puerto Rico's Capitol building in San Juan, Puerto Rico. (Ricardo Arduengo/AP)
By Editorial Board February 26 at 7:25 PM
THE BIG story in the Caribbean these days is Cuba, where the Obama administration’s easing of U.S. economic sanctions has investors buzzing about the prospects for making money, someday, in a possible revival of that economic basket case. How ironic that far less attention is being lavished on a neighboring island that also is in deep financial distress and needs U.S. help, yet, unlike Cuba, is a long-standing friend of the United States — indeed, an integral part of it.
We refer to Puerto Rico, which is laboring under a $72.6 billion debt burden, sluggish growth and a recent downgrading of its credit ratings to junk level. There is broad consensus in financial circles that the island could descend into even worse fiscal chaos and poverty unless it gets relief soon.
Last June, Puerto Rico adopted a law that would have permitted government entities, such as the nearly insolvent electric utility, to restructure about $24 billion in debt — over the objections of holdout creditors — or to go through a bankruptcy-like process akin to those adopted in Detroit and other U.S. cities. The measure would have greatly enhanced the island’s negotiating power with creditors, who include U.S. individuals and institutions drawn to Puerto Rican bonds by their tax-free interest. But on Feb. 6, a federal judge in San Juan struck down the law , ruling, in effect, that only Congress, not the island’s legislature, could authorize Puerto Rican quasi-governmental entities to enter bankruptcy.
Now Puerto Rican leaders are asking Congress to enact a new remedy, the need for which stems from the island’s anomalous political status: neither fully sovereign, and therefore capable of enacting its own bankruptcy law, nor a state, in which case it would be covered by existing law that lets municipalities and other subdivisions of states file for bankruptcy. The legislation, proposed by Pedro Pierluisi (D), Puerto Rico’s nonvoting representative on Capitol Hill, would treat Puerto Rico like the states, allowing its entities and muncipalities to declare bankruptcy; it was discussed Thursday at a hearing before a House judiciary subcomittee .
There are two main objections to the bill: that it amounts to changing the rules under which investors agreed to buy Puerto Rico’s debt and that the island could scrape together the cash to pay its creditors if it were to reform the entities in question, especially the notoriously inefficient electric utility, which is owed hundreds of millions of dollars by the island government. Both points are valid, to an extent — just as it’s valid to point out that investors in Puerto Rican debt heretofore enjoyed an especially sweet deal because it paid tax-free interest.
Puerto Rico must indeed reform its public sector, but the structural crisis affecting its economy is such that even dramatic new efficiencies probably wouldn’t produce enough growth to pay its debts as currently structured. For the sake of its economic future, the United States’ best friend in the Caribbean needs the power to negotiate a new, more sustainable deal with its creditors, and Congress should grant it.

Wednesday, February 11, 2015

Obesity is a significant problem in the small island territory, with over 28% of youngsters reportedly defined as obese.

Puerto Rico Lawmakers Debate Fining Parents Of Obese Children

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  • Puerto Rico Lawmakers Debate Fining Parents Of Obese Children
Lawmakers in Puerto Rico are debating a controversial bill that would fine parents of obese children up to $800 if they don't make efforts to improve their child's health.
"That child is a health issue and can become an economic burden because he/she could develop heart disease, diabetes and other illnesses," Senator Jose Luis Dalmau said to El Nuevo Día, Puerto Rico's largest newspaper.
The president of the Puerto Rico chapter of the American Academy of Pediatrics swiftly opposed the idea.
"This is not the way to do it. This is going to bring complications because there are obese kids due to medical conditions and other genetic factors," Ricardo Fontanet told El Nuevo Día.
If the bill is approved, public school teachers would flag potential obesity cases and report them to social workers and counselors. The Health Department would then get involved and work with parents to determine if the child's obesity is due to poor eating habits or other health problems.
Parents will then be given a diet-and-exercise program, combined with monthly visits from the department. After six months, officials would evaluate the child again. If there is no improvement in the child's health in an additional six months, parents will be fined $500 to $800.
More than 28 percent of children living on the island are considered obese, compared with some 18 percent in the U.S. mainland, reports the AP.
The public hearings of the bill are scheduled to begin on Friday.
Nightly News
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Experts 'Appalled' by Puerto Rican Bill to Fine Parents of Obese Children

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Obesity researchers say a Puerto Rican bill that would fine parents of obese children up to $800 is "unbelievable" and "unfair."
Puerto Rican Sen. Gilberto Rodriguez filed a bill in an attempt to curb obesity in Puerto Rico by having schools find children who are obese and then refer them to health department advisers to determine the cause of obesity, formulate a diet and exercise plan and follow up every four weeks.
If the "situation" persists six months, parents can be fined up to $500, according to the bill, and if a third progress report six months later still shows no significant weight loss, the parents can be fined up to $800.
"What's next? Will they be fining parents of children suffering from other diseases? Maybe diabetes? Maybe cancer? Maybe something else?" said Nikhil Dhurandhar, who chairs the department of nutritional sciences at Texas Tech University.
Rodriguez's bill assumes that people who are obese can chose not to be, but it's not that simple, Dhurandhar said.
Dhurandhar's own research has shown obesity can be caused by a multitude of factors, including the environment in a mother's womb, too much or too little sleep and chemicals in the environment. There's more to losing weight than eating less and moving more, he said.
"This proposal is very unfair and inappropriately penalizes and stigmatizes parents," said Rebecca Puhl, deputy director of the Rudd Center for Food Policy and Obesity at the University of Connecticut. "Childhood obesity is a highly complex issue, and while the home environment is important to address, much broader societal changes are required to effectively address obesity."
Policies that support parents are much more helpful than policies that penalize them, she said. Improving access to opportunities for physical activity and providing incentives toward buying healthier food, for example, have already proven effective in cities like Philadelphia, Puhl said.
The fines this senator has proposed "drastically oversimplify obesity and are more likely to be harmful than incur any benefit," she said.

Parents of Obese Children in Puerto Rico Could Face Fines of Up to $800 

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Parents in Puerto Rico will be fined up to $800 if their children are obese, if a bill currently being debated in the legislature is implemented.
Local senator Gilberto
Rodríguez stated that the bill was aimed at improving children’s health and enabling parents to make better health choices, the Guardian reported.
Under the proposed bill,
schoolteachers would refer potential obesity cases to a counselor, who would then work with the parents of the child to create a diet and exercise program monitored by monthly visits. Failure to show improvement within six months to a year could result in fines of between $500 and $800 for the parents.
Obesity is a significant problem in the small island territory, with over 28% of youngsters reportedly defined as obese. However, several doctors, including the Puerto Rico chapter president of the American Academy of Pediatrics, have called the initiative unfair.

Tuesday, February 10, 2015

Puetro Rican daily “El Nuevo Dia” reports that the island’s debt is close to $168 billion. The government has been telling the public that the debt was $72 billion. The latest figure includes accumulated interest, retirement funds, and medicaid costs. | The Obama administration released its FY2016 budget request this week. It included $1 billion to fund a new strategy for Central America. According to the administration, the aid is intended to assist the governments of Guatemala, Honduras, and El Salvador in addressing epidemic levels of insecurity and violence, poor governance, and lack of economic opportunities driving migration from the region. This squares with the concerns that Congress has expressed for the region. | Lavado de Manos by La Fortaleza - Video Review

Puetro Rican daily “El Nuevo Dia” reports that the island’s debt is close to $168 billion. The government has been telling the public that the debt was $72 billion. The latest figure includes accumulated interest, retirement funds, and medicaid costs.

‘El Nuevo Dia’ calls out Puerto Rican government; calls it ‘bankrupt’

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El Nuevo Dia published a headline saying "Puerto Rico bankrupt" pointing to the dire situation of the island government&squot;s finances. (Shutterstock)
El Nuevo Dia published a headline saying “Puerto Rico bankrupt” pointing to the dire situation of the island government’s finances. (Shutterstock)
Less than a week after Puerto Rico’s House of Representatives approved a bill to request a bond issue for $225 million, the island’s main newspaper is reporting that Puerto Ricans have been misled about the government debt, with a dramatic headline reading “Puerto Rico is bankrupt” (Puerto Rico esta en quiebra).
Puetro Rican daily “El Nuevo Dia” reports that the island’s debt is close to $168 billion. The government has been telling the public that the debt was $72 billion. The latest figure includes accumulated interest, retirement funds, and medicaid costs.
Ali Rosario Alicea from Ponce  is not surprised: “This is debt that has been accumulating throughout the years.”
Puerto Rico has been suffering money troubles for more than a decade. The government keeps borrowing money it can’t pay back; just think of it as trying to pay back a high interest credit card. It’s an endless debt cycle that has affected many Puerto Ricans’ pensions.

Pensions and population drops in Puerto Rico

“I lost $500 from my retirement p last year,” says Alicea, a retired school director.
The cycle is also sending many people packing to the U.S. mainland — an exodus that’s been happening for years. The most recent census shows that Puerto Rico’s population is dropping. From April 2010 to July 2014, Puerto Rico has lost 177,392 people. If this trend continues through 2015, the island’s population will be less than 3.45 million.
The Puerto Rican government’s due date for this expensive credit card is coming up. Officials need to cough up $627 million by the end of the year to start paying back loans; however, El Nuevo Dia is reporting that government officials don’t know where this money will come from. Last week, the House approved the new bond that will pay for community programs, adding more debt to the mix.
“They keep borrowing money they can’t pay back,” says Alicea, “You cannot run a country on borrowed money. This is why Puerto Rico needs to be a state.”
Last year, U.S Sen. Martin Heinrich (D-N.M) filed the Puerto Rico Status Resolution Act into the U.S. House of Representatives; a step toward possible statehood.
For more information on the debt crisis in Puerto Rico, following El Nuevo Dia’s hashtag, #quiebraPR
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· · ·

Puetro Rican daily calls out the government; says island is 'bankrupt' - VOXXI

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Puetro Rican daily calls out the government; says island is 'bankrupt'
Less than a week after Puerto Rico's House of Representatives approved a bill to request a bond issue for $225 million, the island's main newspaper is reporting that Puerto Ricans have been misled about the government debt, with a dramatic headline ...

and more »

Puerto Rico Aims to Become 51st US State in 2021 - Latin American Herald Tribune

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Puerto Rico Aims to Become 51st US State in 2021
Latin American Herald Tribune
In 2020 Puerto Rico would be responsible for organizing everything so that in the elections of that year there can be voting for federal offices such as president and vice president (something that is not available to Puerto Ricans at present), two ...

and more »

Puerto Rico Aims to Become 51st US State in 2021 - Latin American Herald Tribune

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Latin American Herald Tribune

Puerto Rico Aims to Become 51st US State in 2021
Latin American Herald Tribune
In 2020 Puerto Rico would be responsible for organizing everything so that in the elections of that year there can be voting for federal offices such as president and vice president (something that is not available to Puerto Ricans at present), two ...

and more »

Nation's dirty little secret -- Puerto Rico -- longs for its star - Orlando Sentinel

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Orlando Sentinel

Nation's dirty little secret -- Puerto Rico -- longs for its star
Orlando Sentinel
The White House released the following statement a month after the vote: "The results were clear; the people of Puerto Rico want the issue of status resolved, and a majority chosestatehood in the second question," then-White House spokesman Luis ...
The Obama administration released its FY2016 budget request this week. It included $1 billion to fund a new strategy for Central America. According to the administration, the aid is intended to assist the governments of Guatemala, Honduras, and El Salvador in addressing epidemic levels of insecurity and violence, poor governance, and lack of economic opportunities driving migration from the region. This squares with the concerns that Congress has expressed for the region.

After decades of neglect, a promising new US strategy for Central America?

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The Obama administration released its FY2016 budget request this week. It included $1 billion to fund a new strategy for Central America. According to the administration, the aid is intended to assist the governments of Guatemala, Honduras, and El...

The Santayana lesson 

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“Those who cannot remember the past are condemned to repeat it.” So said George Santayana, giving us a line oft repeated by high school history and civics teachers and forgotten by politicians.The events of recent years should convince us that we...

Jeb Bush is the fragile front-runner

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In a tight race with no clear leader, Jeb Bush is the “front-runner,” if only for the satisfaction of handing someone, anyone, that fragile title. The 2016 GOP contest is undeniably a marathon that will come down to the very end. At this point, the...

After 17 years on Argentine bomb case, prosecutor was sure ‘truth will triumph’ 

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BUENOS AIRES — Moments before Argentine prosecutor Alberto Nisman presented his findings in the case that had come to define his life, and just days before his violent death would horrify the nation, he texted a group of friends a solemn message.Read full article >>

Argentine prosecutor considered call for president’s arrest, investigator says 

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BUENOS AIRES — An Argentine prosecutor found dead under mysterious circumstances last month had drafted a request that President Cristina Fernández de Kirchner be arrested on allegations of conspiring to derail his probe into the deadly 1994 bombing of a Jewish center, the investigator into his death said Tuesday.Read full article >>

Pierluisi Introduces Puerto Rico Statehood Admission Bill 

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Washington, DC—Resident Commissioner Pedro Pierluisi today introduced the Puerto Rico Statehood Admission Process Act, a bipartisan bill that would result in Puerto Rico becoming a state on January 1, 2021 once a majority of the electorate in Puerto Rico votes in favor of admission in a federally-sponsored vote.  The bill is a response to a November 2012 referendum in Puerto Rico, sponsored by the local government, in which voters soundly rejected territory status and expressed a clear preference for statehood.    
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Feb, 9 2015

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Feb, 9 2015



Pfizer Bets $15 Billion on New Type of Generic Drugs

Britain Set to Approve Technique to Create Babies From 3 People

Congressional Trips to Cuba in Doubt ss US Interest Surges

In Bedbugs, Scientists See a Model of Evolution

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Feb, 6-8 2015

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Feb, 6-8 2015



Anthem Health Insurer Says Cyberattack Stole Data of Millions

Maternal Depression Often Starts Before Giving Birth, Study Says

TransAsia Airways Under Scrutiny After Fatal Taiwan Crash

Health Dept. Announces Flu Epidemic

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Feb, 5 2015

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Feb, 5 2015


Staples to Buy Office Depot for $6.3 Billion

Can Attention Deficit Drugs ‘Normalize’ a Child’s Brain?

Jordan Executes 2 Prisoners After Isis Video Shows Pilot Being Burned Alive

Recycling/Animal Feeder Booths Make Caribbean Debut in PR

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Feb, 4 2015

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Feb, 4 2015

Fashion & Beauty

Modern Love

NY Attorney General Targets Supplements at Walgreens, Walmart, GNC

What’s in Those Supplements?

ISIS Video Is Said to Show Jordanian Pilot Being Burned to Death

Judge Orders Tax Reform Report Be Turned Over to Journalists

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Feb, 3 2015

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Feb, 3 2015



Exclusive Negotiating Pact Signed with Roosevelt Roads Developer

A Discredited Vaccine Study’s Continuing Impact on Public Health

Training Teachers to Take Aim Against Taliban

Speck of Interstellar Dust Obscures Glimpse of Big Bang

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Feb, 2 2015

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Feb, 2 2015


PR Launches Initiative to Protect Honey Bees

Medicare Payments Surge for Stents to Unblock Blood Vessels in Limbs

Oil Cash Waning, Venezuelan Shelves Lie Bare

Chickens Agree: Left Means Less; Right Means More

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Jan, 30-Feb, 1 2015

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Jan, 30-Feb, 1 2015



71 Groups Meeting in PR in February-March for $12 Million Impact

Why Your Workout Should Be High-Intensity

In Violent Venezuela, Police Killings Surge To Almost One A Day

Snowstorm’s Forecast Was Mostly Right, Even if It Felt Wrong in New York

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Puerto Rico News Digest For February 10, 2015

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From The San Juan Daily Star:

Puerto Rico Farmers Association President Héctor Cordero lashed
out against the proposed valued-added tax (IVA by its Spanish
acronym) late last week, saying it poses a threat to the local
agronomy sector if it is approved without exempting agricultural
products. Cordero said the way the IVA is being proposed for
implementation, without exempting farm products, “would be a
mortal blow to the island’s farming sector.”

“The government is promoting a sustainable agriculture platform,
but imposing taxes on agricultural products would increase costs,
making it more diffi cult to farm,” Cordero said, adding that 89
percent of the food consumed in Puerto Rico is imported. Currently
and during the past 20 years, the farming sector has been exempted
from paying taxes on agricultural purchases, as disposed by Law 225
of 1995.


From The New York Times:

Critical elements of Puerto Rico’s plan to avert financial disaster
are in jeopardy, after a federal judge struck down a law that
allowed the government to restructure certain debts. The law, known
as the Recovery Act, was meant to give Puerto Rico’s public corpo-
rations protections similar to bankruptcy. Unlike American cities
like Detroit, which used federal bankruptcy law to  sort out its
finances, Puerto Rico, a United States commonwealth, is not
permitted to declare bankruptcy.

In his decision on Friday night, Judge Francisco A. Besosa of the
United States District Court in San Juan, Puerto Rico, said the
Recovery Act overstepped federal law, and he enjoined common-
wealth officials from enforcing it. The government said on Monday
that it planned to appeal the judge’s ruling.


From Voxxi:

A week after Puerto Rico is declared bankrupt by its biggest daily 
newspaper, electronics giant Radio Shack announced it will be closing 
44 stores across the island. Calls to Radio Shack’s Puerto Rico 
central office about how many jobs will be lost were unanswered and 
store employees are not authorized to comment.

Five Radio Shack locations will remain open on the island, according 
to “El Nuevo Dia.”  This is all part of a deal made last week with 
investment firm Standard General.  The firm is buying out between 
1,500 and 2,400 of Radio Shack’s 4,000 doors.  Up to 1,750 of those 
stores will house a Sprint Wireless shop in-house, a deal also announced 
last week.


Puerto Rico’s technology sector offers the lowest average pays nation-
wide and is lagging when it comes to job opportunities, according to 
this year’s Computing Technology Industry Association’s “Cyberstates: 
State-by-State analysis of the U.S. Tech Industry” report, to be made 
public later today.

The 16th annual edition of the study, which examines the size and 
scope of the tech industry in terms of jobs, wages, and other factors 
across the 50 states, the District of Columbia and Puerto Rico, shows 
that the island placed 52nd regarding wages and 40th in terms of 

Read the whole story

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2.5M Tremor Registered 7 Miles North of Ponce

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The US Geological Survey registered a 2.5 magnitude earthquake last
night at approximately 10:45PM local time, about 7 miles north of the
city of Ponce. The epicenter's coordinates were 18.123°N 66.613°W,
with a depth of 18.0 km. No damages or injuries have been reported.

PR Spoils The Rich As Middle Class Flees

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Photo: The Real Deal Guide To Puerto Rico

From The Associated Press:

PALMAS DEL MAR, Puerto Rico (AP) — Bond trader Ben Eiler
swapped life in suburban Georgia for an island in the Caribbean, and
he didn't even have to apply for a visa.

The towering 38-year-old native of Arkansas is one of at least 250
people who've accepted Puerto Rico's invitation to well-heeled U.S.
citizens to move to the island and enjoy life without taxes on capital
gains, an enticing offer for those whose income is derived from


This semi-autonomous U.S. territory sets its own tax policy, and its
residents pay no federal tax on income derived locally. Mired in a
recession for almost a decade and with an unemployment rate stuck
above 13 percent, more than double the U.S. rate overall, it decided in
2012 to try to lure wealthy investors who would be likely to buy
expensive real estate, establish...[CONTINUE READING]
Read the whole story

· ·


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From ABC News:

Two Cuban baseball players in Puerto Rico for the Caribbean Series
apparently have abandoned their team mid-tournament, Cuba's team
said Wednesday. The missing players were identified as 19-year-old
pitcher Vladimir Gutierrez and 29-year-old shortstop Dainer Moreira.
Gutierrez had not yet played in the series, while Moreira batted in
Cuba's only run against the Dominican Republic.

Cuba was scheduled to play against Puerto Rico Wednesday night after
losing its first two games against the Dominican Republic and Mexico.
The players' apparent decision to abandon their team to stay on
American soil comes amid moves to improve US-Cuba relations, with the
MLB on Tuesday eliminating its requirement that Cuban players obtain
a license from the U.S. government before they are eligible to sign
with big league teams...[MORE]

Puerto Rico News Digest For February 3, 2015

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Photo: The Costa Rica News

From The San Juan Daily Star:

With the support of Cuba and Venezuela, the heads of state and
government of the 33 member countries of the Community of Latin
American and Caribbean States (CELAC) have ratifi ed their call
for the decolonization of Puerto Rico to free the Caribbean of
colonies. Their common stand was included in the final decla-
ration of the Third Summit of Heads of State and Government of
CELAC, adopted late last week in Belén, Costa Rica and posted
on the group’s website. The leaders also reiterated the Latin
American and Caribbean nature of Puerto Rico, in line with the
stand assumed previously in the Declaration of Havana at the
end of the 2014 CELAC Summit.


From Fox News:

Twelve Dominican migrants were detained and an undetermined
number are still missing after the boat they were on sank
off a beach in the northwestern Puerto Rican town of Camuy,
authorities said Monday.

U.S. Customs and Border Protection official in Puerto Rico
Jeffrey Quiñones on Monday told Efe that the homemade boat
was 9 meters (29.5 feet) in length and sank last Friday off
the coast at Camuy.


From Inquisitr:

According to Fox News, nine different men from Puerto Rico have
been convicted for the murder of Lt. Osvaldo Albarati on February
26, 2013. All nine of them were inmates at the Metropolitan
Detention Center in Guaynabo, Puerto Rico, when the incident
occurred. Albarati had confiscated cellphones and other contraband
from the inmates. This provoked the nine inmates to retaliate.

The United States Attorney for the District of Puerto Rico, Rosa
Emilia Rodriguez, claimed that this was the first murder of a
United States federal agent in Puerto Rico. Rodriguez spoke at a
press conference on Friday, explaining that the nine defendants had
carefully planned to kill the Puerto Rican correctional officer as
a direct result of the confiscated items.


From The Idaho Statesman:

San Diego Padres utilityman Alexi Amarista hit a two-run triple to
lead Venezuela to a 5-2 victory over host Puerto Rico and Mexico beat
Cuba 2-1 Monday in the opening games of the Caribbean Series. Cinci-
nnati Reds prospect Daryl Thompson gave up a run in six innings and
struck out five for the Venezuelan team, Los Caribes de Anzoategui.
Cleveland Indians minor leaguer Giovanni Soto got the loss for the
Puerto Rican team, Los Cangrejeros de Santurce.


From Reuters:

Puerto Rico's economic activity fell 1.4 percent year-on-year in
December, the U.S. Commonwealth's Government Development Bank
(GDB) said on Friday. The GDB's Economic Activity Index, which
tracks employment, gasoline sales and other indicators on the
island, slipped to 125.3 in December, 2014.

Puerto Rico suffers an economic crisis

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Protest of government pensions in Puerto rRico.
People protest outside the government pension headquarters in San Juan, Puerto Rico, Wednesday, Jan. 30, 2013. Nearly three years ago, former Gov. Fortuno established a committee charged with solving the pension fund’s fiscal problems. (AP Photo/Ricardo Arduengo)
Last November, I wrote about the dilapidated state of Puerto Rico and its economy, but I reserved hope that the island could be resuscitated by taking a course of decisive action.
Puerto Rico's governor is helping economic crisis get better.
Puerto Rico Gov. Alejandro Garcia Padilla has taken some economic action. (AP Photo/Ricardo Arduengo)
Unfortunately, recent news that Puerto Rico’s bonds were downgraded to junk status has only reinforced the severity of our island’s problems.
According to The Washington Post, this credit downgrade will make it extremely difficult for Puerto Rico to borrow money and, as a result, finance projects that could help reverse the tide.
Despite these setbacks, I still hold the steadfast belief that Puerto Rico can make the changes necessary to rejuvenate its economy and, once again, be recognized as premier travel and business destination in the Caribbean with a rich heritage and growing economy.
While Governor Alejandro García Padilla has taken some steps to implement austerity measures to reduce government costs, there are still more significant spending cuts needed in order to address the island’s $70 billion of debt.
Since Puerto Rico’s constitution prohibits the government from declaring bankruptcy, these cuts aren’t optional; action is required.
Even more morose than Puerto Rico’s budget situation is its unemployment rate, which currently stands at more than double the average in the United States.
There are a number of other economic indicators that point to a poor standard of living for most people in Puerto Rico.
The per capita income on the island is roughly $15,200 and nearly half of all households are food stamp recipients.
Let’s call a spade a spade – there are a lot of poor people in Puerto Rico today and the dire economic situation is driving the high crime rates – so much so that there were 1,136 murders in 2011.
Homeless faces economic crisis in Puerto Rico.
The homeless population in Puerto Rico has risen sharply in an ongoing economic crisis. Officials say they expect the problem will only grow worse. (AP Photo/Ricardo Arduengo)
Although there is reason for hope considering the number of homicides fell to 883 in 2013, rampant crime is having an adverse effect on economic growth.
It is scaring away tourists and investors, which are one of the driving forces behind the island’s economy.
Resorts, hotels and restaurants, rely on the tourism industry and are finding it harder to persuade people to visit Puerto Rico, which is directly impacting their bottom line.
Investors rely on stability when considering investments.
All these conditions are driving an exodus of people from Puerto Rico to other parts of the Unites States. Island residents are also leaving for better opportunities in other places.
According to The New York Times, “In 2011 and 2012, the population fell by nearly 1 percent, according to census figures.  From July 2012 to July 2013, it declined again by 1 percent, or about 36,000 people.  That is more than seven times the drop in West Virginia, the state with the steepest population losses.”
The simple but hard truth is that states like California, Texas and Florida offer a better and more stable life.
Puerto Rico cannot let go of its professionals and young people so easily as it will have devastating consequences on the integrity of its workforce.
Puerto Rico’s talent is our life blood and we most stop the hemorrhaging.  In order to prevent our best and brightest from fleeing to other destinations, we have to make the economy more attractive and offer incentives encouraging them to stay and build prosperous lives on the island.
Workers in Puerto Rico protest because of economic crisis.
Federal workers protest the government shutdown outside the Environmental Protection Agency office in Guaynabo, Puerto Rico, Tuesday, Oct. 8, 2013. As the partial government shutdown enters its second week, Democrats controlling the Senate plan to move quickly toward a vote to allow the government to borrow more money, challenging Republicans to a filibuster showdown as the time remaining to stop a first-ever default on U.S. obligations ticks by. (AP Photo/Ricardo Arduengo)
Additional measures can include looking at the current tax structure, which is in dire need of reform. Under the present tax code, many small- and medium-sized businesses with net profit margins fewer than five percent are penalized, some reportedly paying an effective tax rate of 130 percent.
This is the embodiment of the type of stifling policy that needs to be fixed immediately; otherwise, Puerto Rico will continue to face a plethora of problems over the long-term.
Puerto Rico public officials must make it a priority to proactively address problems by offering bold and sweeping reforms that will incentivize investment and retain our best assets.
While it is true that Puerto Rico’s situation has worsened since I last opined on the subject, I still have faith that with hard work and pro-growth policies Puerto Rico can once again prosper.
This island has everything to offer, we just need to implement meaningful solutions, so that it can realize its full potential.
Javier Ortiz is a Republican strategist, principal at Crane & Crane Consulting, and an advisor on public policy and regulations for a D.C.-based global law firm.
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Spain to help Puerto Rico with it’s embattled economy

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Puerto Rico looks at tourism as a short-term fix for its financial crisis.
In this file photo, tourists walk through a parking lot in front of a pier where a cruise ship is docked in Old San Juan. Trade groups say the flourishing cruise ship industry injects about $2 billion a year into the economies of the Caribbean. Puerto Rico is looking to boos its industry, while tourism remains a short-term fix to its economic crisis. (AP Photo/Ricardo Arduengo)
Puerto Rico is courting Spain in what could be the Caribbean island’s first decisive step towards financial recovery as it has experienced almost a decade of financial crisis. The government in San Juan aims to become a sort of “investment bridge” between Spain and the U.S. by capitalizing on the island’s history of pharmaceutical production, as well as other industries such as banking and computer technology.
This is a bold move by the administration of Governor Alejandro Padilla. If successful, it could stop the “brain drain” of young educated Puerto Ricans who have chosen to migrate to the U.S., Spain or Latin America in search of better livelihood.
Puerto Rico Courts Madrid
Governor Padilla has intended to increase ties with Madrid over the past year. This was best exemplified by his trip to Spain on June 2013 with an entourage that included Alberto Baco, Secretary of Economic Development and Commerce, as well as Antonio Medina, Director of the Compañia de Fomento Industrial (PRIDCO).
The goal was to get the attention of Spanish and other European industries to theisland’s pharmaceutical industry.
Puerto Rico historically has had a strong industry of biosciences. It is estimated that 18% of pharmaceutical products in the U.S. are manufactured in Puerto Rico, such as Lipitor, Norvasc and Zocor.
A group of Spanish industrialists returned the favor and visited the Caribbean island this past February as part of a workshop ambitiously entitled: “Puerto Rico: Gateway to the United States Biotechnology Market.” The delegation was made up of representatives of Spanish companies such as CRB Inverbio, Health in Code and MGM Integrated Solutions.
The aforementioned Medina, director of PRIDCO, highlighted that “Puerto Rico has a history of over 50 years in the pharmaceutical industry, which has evolved and expanded into other industries” such as biotechnology.
An April 6 report by the Spanish news agency EFE summarizes Padilla’s new strategy: internationalize the island’s economy and create a platform for foreign firms that would like to export their services to the U.S. and for local companies who wish to break into the European market. (In other words, San Juan would become the proverbial middle man).
So far, it seems that San Juan has had limited success at bringing investment from Madrid.
The aforementioned EFE article explains how trade between Puerto Rico and Spain is “sparse” and the island exported $875 million USD worth of Spanish goods in 2012.
Plan B for Puerto Rico: Tourism
While the Padilla government aims to increase investment opportunities with Spain, he may have to rely on the well-tested tourism sector as a Plan B for short-term income.
This upcoming May a new Air Europa route will start between San Juan and Madrid. This could bring a significant increase of Spanish tourists, and their wallets, to the island for the summer 2014 tourist season. Ingrid Rivera, Puerto Rico’s Minister of Tourism, believes that this air route could bring up to 28 million euros to the island.
Moreover, Puerto Rico participated in the late January 2014 International Tourism Fair, which was held Madrid. Additionally, Puerto Rico will earmark as much as two million USD for a marketing campaign to attract more European tourists to the island.
There is also the hope that Iberia could once again restore flights to Puerto Rico. Due to financial problems the airline stopped flights to San Juan in early 2013.
Short Term Solutions?
Puerto Rico’s financial credibility has been hurt due to its $70 billion USD debt. Hence, analysts and scholars continuously compare the island to European nations in financial trouble.
In fact, the renowned Dr. Howard Wiarda from the University of Georgia wrote a commentary in which he argues that “uncertainty over the status issue [with the U.S.] makes it more difficult for Puerto Rico to renegotiate its large debts, while its inability to pay reinforces the notion […] that the island […] cannot govern themselves.” (Wiarda, “Puerto Rico: A Caribbean Greece?” March 2014).
Protest of government pensions in Puerto rRico.
People protest outside the government pension headquarters in San Juan, Puerto Rico, Wednesday, Jan. 30, 2013. Puerto Rico is confronting what economists and financial analysts say is a ticking fiscal time bomb. (AP Photo/Ricardo Arduengo)
Finally, this past January 28, the Center for International Security Studies hosted a conference with Dr. Jose Villamil, a Puerto Rican economist and Chairman & CEO of Estudios Tecnicos, a financial consulting firm in Puerto Rico.
During the Question & Answer section, I asked Villamil how the Puerto Rican government could stop the aforementioned brain drain of young educated individuals, who make up the cornerstone of any country’s workforce.
Villamil acknowledged that it is a major problem. One of his suggestions for a short term solution is investment in construction. He clarified that he did not mean ongoing large projects in the island such as a proposed train and the extension of a major expressway.
Villamil explained to the audience that he meant small infrastructure projects that can be built very quickly, particularly on the Western part of the island which is more undeveloped.
Nevertheless, he stressed that construction will not solve the island’s long term problems; this is just one short term solution.
Initiatives such as an alliance with Spain over pharmaceuticals, increasing tourism and short-term construction projects demonstrate how Puerto Rico has several options regarding how to jumpstart its economy. Hopefully one of them will work.


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