JEREMY HOBSON: President Obama is en route to Puerto Rico at this hour. He’ll be talking jobs and the economic recovery and hosting a campaign fundraiser. He’s the first President in decades to set foot on the island, which, as Marketplace’s Jeff Horwich reports, is the most economically depressed place in the United States.
JEFF HORWICH: The Puerto Rican economy is 12 percent smaller than it was four years ago. Economists estimate nearly one-third of Puerto Ricans are out of work.
Business consultant Jose Villamil says the economy’s been essentially stagnant for decades.
JOSE VILLAMIL: We tried to keep an approach to economic development that ran out of gas many years ago. The world changed, the global economy changed and we assumed that it hadn’t.
Discount manufacturing center, oil refining hub, pharmaceutical hot-spot — the island’s tried a lot of things over the years.
Now economist Dionisio Montalvo says businesses in Puerto Rico face too many obstacles.
DIONISIO MONTALVO: The payments for electricity and water are high. The transportation — we don’t have good transportation in Puerto Rico.
Obama’s visit includes historical sites and meetings on the territory’s political status. But Montalvo and Villamil say Puerto Ricans mostly want to hear about one thing: Es la Economia, estupido.
I’m Jeff Horwich for Marketplace.
STEVE CHIOTAKIS: President Obama is on the road this week talking about jobs and maybe politicking to save his own. Today he visits one of the slowest-growing economies in the world. And he doesn’t even have to leave the U.S.
Marketplace’s Jeff Horwich is here to explain — Jeff, where’s the president going?
JEFF HORWICH: Puerto Rico.
CHIOTAKIS: Puerto Rico? One of the slowest-growing economies in the world?
HORWICH: It is stunningly bad there as a matter of fact. The economy of Puerto Rico is probably going to shrink more than 4 percent this year. Now that’s worse GDP growth than Greece. And per capita income for Puerto Ricans is already one-third the U.S. mainland.
Dionisio Montalvo is an economics professor there. You want to talk about jobs? He says look at their unemployment rate.
DIONISIO MONTALVO: The government says its 16, but really I think it’s about 25 to 30 percent.
That’s if you include all the people who have quit looking. Montalvo says last year the territory’s government cut 30,000 jobs — and it’s still got a billion dollar budget deficit.
CHIOTAKIS: All right, a weaker economy — plus, we’ve heard that no U.S. president, Jeff, has made an official visit to Puerto Rico since 1961. Why would Mr. Obama go there?
HORWICH: Well, as a political visit — Puerto Ricans can’t vote for president, but their relatives in Florida can. And if the message of the moment is turning the economy around, it’s hard to find a bigger potential turnaround story.
Jose Villamil is an economic consultant in San Juan.
JOSE VILLAMIL: Puerto Rico has to become a service exporting economy — we can export health services, financial services, we have a very good engineering industry.
Villamil says years of economic development aid left the island with a strong professional class, a lot of educated people. It’s a matter of adapting those skills to the global economy.
CHIOTAKIS: Marketplace’s Jeff Horwich, thanks.
HORWICH: You’re welcome.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.