Home' Trinidad and Tobago Guardian : April 27th 2014 Contents SBG22 INTERNATIONAL
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt APRIL 27 • 2014
SAN JUAN, Puerto Rico---Puerto Rico hopes
to persuade wealthy investors to bet on the
US territory at a two-day conference aimed
at attracting new money amid the island's
struggles to recover from a nearly eight-
Among the featured speakers are hedge fund billionaire
John Paulson, whose New York-based firm Paulson & Co is
investing US$260 million this year in two upscale, beachfront
hotels in the capital of San Juan.
Some 200 business executives, the majority from the US,
are attending the summit, organised in part by Paulson's
company and Puerto Rico's Department of Economic Devel-
opment & Commerce. The summit is the first of its kind
and seeks to highlight reasons why Puerto Rico would be a
good place for investors, including a law that allows new
residents to avoid taxes on capital gains, the main revenue
source for many high-end investors.
The summit comes as Puerto Rico tries to jumpstart its
economy, whittle down US$70 billion in public debt and
lower its 14.7 per cent unemployment rate, the highest com-
pared with any US state. The island also saw its credit recently
downgraded to junk status, but the government in March
issued a record US$3.5 billion in general obligation bonds to
help boost liquidity and refinance debt, among other things.
"We proved that Puerto Rico is not Detroit, it's not Greece,"
Governor Alejandro Garcia Padilla said at the summit's open-
ing. "We proved that Puerto Rico is not heading to a default
on its obligation, but to a fiscal and economic recovery."
However, US investors and bondholders are still waiting
for Garcia to unveil the first balanced budget in more than
two decades on Tuesday. Garcia has pledged to eliminate at
least US$820 million in deficit, but it is unclear how exactly
he plans to do that.
Garcia has only said he will erase the deficit without resort-
ing to layoffs, and that he will focus on attracting more high-
end investors to the island of 3.67 million people.
"This is not only about keeping government spending in
line, but about generating wealth in Puerto Rico, job investment
and trade," he said. "It's this economic activity that at the
end of the day will make a difference."
Nicholas Prouty, president of Putnam Bridge Funding, a
company that is investing US$450 million to renovate a
marina complex in the southern city of Fajardo, said he
moved to Puerto Rico from Connecticut about a year ago.
The announcement surprised many of his US-based friends,
"People move from Puerto Rico, they don't move to Puerto
Rico," Prouty recalled one New York hostess telling him.
The government has pushed to diversify the US territory's
economy in recent years and strengthen its industrial base.
German company Lufthansa Technik announced this month
that it would invest US$20 million and build a facility for
aviation maintenance, repair and overhaul, while Arizona-
based company Honeywell said this week that it would invest
US$24 million to expand its business on the island.
Richard Carrion, chairman and CEO of Banco Popular Inc,
who was involved in the Lufthansa deal, acknowledged that
concerns about Puerto Rico's economy remain.
"Fiscal conditions remain delicate," he said. "Problems
that took two decades to create cannot be solved in months."
Carrion said the government needs to focus on two worrying
statistics: the loss of population and a low labor participation
More than 450,000 people have left the island in the past
decade, and the labour force participation rate is 41 per cent,
compared to 63 per cent in the US.
"Those are the needles we've got to move," he said. "We
need to get growth back in the equation."
Danica Coto, Associated Press
Puerto Rico govt seeks to lure
In this November 23, 2011 file photo, tourists look
out from the pier near the cruise ship terminal in
Old San Juan, Puerto Rico. The Caribbean country
launched a two-day summit on Thursday, April 24,
2014 to lure wealthy investors to the US territory as
it struggles to emerge from a nearly eight-year
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