Puerto Rico Sovereignty: New Opportunities for American Businesses | Opinion
In 2020, Puerto Rico celebrated its sixth status plebiscite, just as recent events in Puerto Rico and the U.S. have led not just to the political and economic demise of the Commonwealth, but the statehood option as well. With only 27% of all registered voters supporting statehood in 2020 and 67% of the people not voting for the pro-statehood governor, there certainly is no mandate for Puerto Rico statehood and Congress knows this.
In 2014, the U.S. Congress’ Government Accountability Office (GAO) published a report that explained how statehood would negatively impact both the Puerto Rican and U.S. economies. According to this report, the increased federal tax burdens of statehood, up to $11.6 billion alone, would decimate the Puerto Rican economy, consolidate welfare dependency on federal funds, and push American companies, along with thousands of Puerto Rican professionals, to leave Puerto Rico, which would further exacerbate Puerto Rico’s economic debacle. Realizing that both the Commonwealth and Statehood options promote dependency and poverty in Puerto Rico, where are entrepreneurs and investors going to turn to in regard to long-term investments and operations in Puerto Rico?
Most Puerto Ricans, particularly young professionals, realize that statehood is not a viable option for their country for political, economic, and cultural reasons. Today, after 124 years of undemocratic colonial rule, Puerto Ricans and Americans have an opportunity to be on the right side of history and forge the path towards decolonization via sovereignty, either via Independence or Free Association – a dignified political relationship whereby Puerto Rico would become a sovereign nation, yet associated with the United States as an ally and economic partner. Today, the U.S. has three such beneficial relationships with three Pacific Island nations.
Thankfully, Free Association is the status option with the largest growth margin of support in modern Puerto Rico, going from 0.29% of the vote in the 1998 plebiscite to 33.3% of the vote in the 2012 plebiscite. In the 2012 plebiscite, both sovereignty options together garnered almost 40% of the vote – not too bad when one considers that pro-sovereignty advocates have been persecuted by the colonial regime and statehooders for over a century. The fear of freedom is slowly wearing off. In the recent 2020 elections, the Puerto Rican Independence Party (PIP) received renewed electoral support and various pro-sovereignty candidates were elected to Puerto Rico’s legislature. The tides are turning.
According to estimates discussed in my recently published book, “Puerto Rico: The Economic Case for Sovereignty”, a Republic of Puerto Rico with only a robust customs system at all of our ports of entry and a competitive 15% tax on multinational corporations (a tax rate defended by the United States) would be able to generate $17.6 billion in revenues, which is $8.6 billion more than Puerto Rico’s current operating budget of $9 billion. As you can see, sovereignty is the option of real economic growth and development.
A sovereign Puerto Rico would prioritize specific strategic sectors that the government would incentivize, such as industry, tourism, technology, pharmaceutical, aerospace, and scientific sectors, among others. American companies would benefit since they would be able to invest in these priority sectors as well, furthering our national economic development goals. While statehood would supposedly bring in more funds for food stamps; sovereignty, on the other hand, would finally open Puerto Rico to many economic opportunities.
For entrepreneurs considering their future operations in Puerto Rico, sovereignty offers stability, transparency, rule of law, and a dignified relationship with the United States based on sovereignty, free transit of peoples and goods, common interests, and a path forward that would greatly benefit our important business communities. For entrepreneurs, now is the time to embrace and support sovereignty, democracy, economic development, and a new relationship between our two nations.
Our future as a free, prosperous, and democratic nation depends on it.