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Still struggling to define itself
 Visitors to Puerto Rico are often surprised when they are welcomed to "the United States." Just over 100 years since it was ceded by Spain to the US, Puerto Rico is still struggling to define itself. Last December, a majority of the island's predominantly Spanish-speaking electorate rejected plans to opt for full US statehood. ...more
ECONOMIC OVERVIEW:
Recovering from Georges
Many of its neighbours in the Caribbean and Central America were devastated last year by powerful hurricanes. But Puerto Rico is recovering rapidly from Hurricane Georges - the worst disaster in its modern history. Four months after 110mph winds tore through the centre of the island, the effects are barely noticeable. ...more
BANKING:
Deregulation paves the way for rapid expansion
The abolition of the tax incentives that have persuaded some of the United States' biggest corporations to leave their profits in Puerto Rico could have proved disastrous to the island's financial system. But Puerto Rican banks have not only survived the end of so-called Section 936, they are prospering as never before. ...more
FUTURE PROSPECTS:
When you have the best of both worlds, why change?
Politics in Puerto Rico is dominated by a long-running debate over the island's relationship with the US with which Puerto Rico has a quasi-colonial "commonwealth" relationship. Islanders vote in presidential primary elections, but not in US general elections. ...more
BEYOND SECTION 936:
New regime to target mainland companies
The decision of the US government to phase out the tax incentives which attracted mainland companies to Puerto Rico, and which stimulated rapid expansion of manufacturing, has led the island's administration to implement a new corporate tax regime aimed at retaining such companies and attracting new ones. ...more
TRADE BRIDGE:
Proposal is regarded as a challenge and opportunity
The proposed Free Trade Area of the Americas, to be created in 2005, is regarded by Puerto Rico's administrators as both a challenge and an opportunity. The island will face competition for markets in the US from the members of the free trade area, many of which could be more competitive because of lower production costs. ...more
ELECTRICITY:
Co-generation may be key to avoiding power deficit
Fearing a power deficit in the next five years caused by expansion of the economy, Puerto Rico is depending on investments of $1.9bn to provide adequate electricity. Demand is growing at 3.5 per cent a year, the same rate as the economy. ...more
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