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Economic Bombshell

October 3, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

Two weeks ago, Governor Sila Calderon and several of her administration’s officials shrugged off as unimportant the confirmation of the imminent departure from Puerto Rico of the U.S. Army Southern Command (USARSO), headquartered at Fort Buchanan since 1999.

"I don’t know of any economic benefit beyond the expenditures that the people quartered there may have made. I don’t believe there’s going to be a significant impact," Gov. Calderon said.

The Governor and her administration should read carefully our front page story this week.

Puerto Rico’s economy will take a hit to the tune of at least $300 million a year because of U.S. military base closures and downsizing taking place on the island right now, including USARSO, and it may get worse.

If the Army finally shuts down Fort Buchanan altogether and the U.S. Navy closes down the Naval Station at Roosevelt Roads, Puerto Rico’s economy stands to loose more than $1 billion a year.

In our view, that’s nothing to shrug off.

It may be that the information reaching the governor is that the island’s economy is doing so well that we really should not be concerned about loosing the $160 million a year that USARSO’s headquarters alone brought to the island’s economy. But such a cavalier attitude about the economic impact of the move is totally unbecoming our highest elected officials whose primary responsibility should be to look after our collective well-being.

First, because–guess what–our economy is really not doing that well at all. And even if it were, $160 million a year is nothing to sneeze at. There are hundreds of families that will be immediately impacted by the move.

Second, because USARSO’s departure from Puerto Rico is only the tip of the iceberg. Anyone who doesn’t want to see that is deceiving him or herself.

Item. As reported in our front page, this month will see the less publicized closure of the 2,200-acre U.S. Navy base at Sabana Seca, in Toa Baja, which contributed $10 million a year to the local economy. Ninety civilian employees will lose their jobs.

Item. As earlier reported by CARIBBEAN BUSINESS, Department of Defense procurement spending in Puerto Rico is way down so far this year. At the current rate, by the end of 2002 DOD will have slashed procurement spending on the island from the $300 million spent in 2000 and 2001 to about $150 million.

Item. With USARSO fully relocated to Texas by early next year, the total shut down of Fort Buchanan is a real, indeed, very likely possibility during the next round of base realignment and closure which is already schedule to be taken up by Congress in 2005. In fact, Fort Buchanan barely survived two earlier rounds of closures in the 90’s. The arrival of USARSO made the fort more useful to the U.S. Army, thus giving its survival a breath of fresh air. Now that’s gone.

Item. If indeed the U.S. Navy is forced to abandon the use of its Inner Range target facilities at Vieques, the future of Roosevelt Roads is up in the air, regardless what U.S. Navy public affairs spokespeople are forced to say at this time for the record. You don’t have to be a military scientist to know that. Some very powerful Senators and Congressmen are already very annoyed with Puerto Rico’s actions regarding Vieques.

Tally: $1 billion dollars a year up in smoke. Civilian employees, contractors of every sort, medium and small businesses around the installations and even the government of Puerto Rico (foregone revenue to public utilities and forgone tax revenue to Hacienda) will feel the pinch.

Oh sure, we’re going to hear hours of speeches by politicos of many stripes (mostly anti-American) telling us: "good riddance. Now we can use all those empty military facilities to do wonderful projects to benefit Puerto Rico’s economic development." Yeah, right! When you hear those speeches–and the speeches will come–ask yourself how many wonderful economic development projects have been developed in Culebra after the U.S. Navy ceased operations there in the 70s, or what economic development use are we giving to the former U.S. Air Force base at Ramey in Aguadilla.

Finally, ask yourself what’s the cost–in terms of foregone investment and business opportunities to the island–that business people in the U.S. mainland and across the world may have formed the perception that we have become anti-American.

The only ones benefiting from such development are the pro-independence followers–a small minority that very intelligently are leading Puerto Ricans down a very dangerous path.

This Caribbean Business article appears courtesy of Casiano Communications.
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