Puerto Rico’s economy has shrunk by 25% since 2006 and the population is contracting. Faced with this scenario, it is urgent to plan for older adult markets, as well as to take advantage of new consumption patterns with technologies whose use has intensified following the COVID-19 pandemic, commented economist José J. Villamil, chairman of the Board of Directors of the firm Estudios Técnicos, Inc. (ETI), during a conference before the Puerto Rican Planning Society.
“The future is not what it was. Puerto Rico’s economy has been ‘oversized’ and will have to be ‘resized’ as a smaller economy and population,” he said at his virtual conference.
Villamil stressed that, for decades, the Puerto Rican economy has been losing its ability to generate growth. Added to this is a population that, as a result of emigration and fewer births, has defied from 3.8 million in 2000 to 3.1 million this year. It is estimated that by 2025, the population in Puerto Rico will be reduced to 3 million, with fewer young people and with an ageing of citizens that will impact all markets and services, in particular health, education, housing and the labour market.
“Puerto Rico is likely to face a future in which a high proportion of the workforce is permanently unemployed, if it does not implement measures to address this situation. Problems of inequality, poverty and lack of social mobility will have to be recognized not only as social problems, but as obstacles to development,” Villamil warned.
In the face of this harsh reality, planning to facilitate a new vision of Puerto Rico becomes urgent. “Today, obtaining federal funds has become the Country Plan,” Villamil said, stressing that other planning strategies are needed that include analysis and management of the global, economic, political, social and technological risks they face. He noted that it was vital to minimize risks as a development strategy. “That suggests, economically, strengthening internal links and local capital,” he said.
“Planning should be located as the focus of a network of decisions in which the other actors are municipalities, government agencies, public corporations, non-profit and community-based organizations and, of course, the private sector. Seeing it in this way suggests that the role of planning is one of the ‘connector’ or integrator of that network that characterizes the decision-making process in a complex society,” Villamil said.
The economist told planners that it is necessary to understand in depth the system under planning, which in Puerto Rico involves the aforementioned aspects of understanding the environment and incorporating the risk element. “How you plan depends on that knowledge,” Villamil said.
As for resizing Puerto Rico to a smaller economy, he said it is necessary but that “smaller is not necessarily worse. Many small economies are successful examples of development.”
Estudios Técnicos, Inc. is the leading firm of planning, economic advice and market strategies in Puerto Rico. It has a multidisciplinary team of 25 employees.