The IMD World Competitiveness Ranking for 2024 is out, and Puerto Rico is included. The data gives a different set of criteria for examining the economy than the metrics we usually see.
Some of the items are the same. For example, we see that the Gross Domestic Product, though we don’t yet have the number for 2024, has increased nicely since 2022:
| 2020 | 2021 | 2022 | 2023 |
|
103.13 |
106.37 |
113.44 |
115.80 |
But we know that the GDP doesn’t give a full picture. It includes profits from national and multinational corporations that are declared as originating in Puerto Rico, but which are funneled out of the Island into the states. This is the result of Puerto Rico’s colonial tax loopholes.
However, the monetary fund isn’t worrying about tax evasion in Puerto Rico:
| Tax evasion | 2020 | 2021 | 2022 | 2023 | 2024 |
| Tax evasion is not a threat to your economy | |||||
| Puerto Rico |
– |
– |
– |
3.76 |
3.89 |
We’re doing pretty well with equal opportunity, too:
| Equal opportunity | 2020 | 2021 | 2022 | 2023 | 2024 |
| Equal opportunity legislation in your economy encourages economic development | |||||
| Puerto Rico |
– |
– |
– |
5.66 |
5.71 |
We’re also doing well with image branding in the past couple of years:
| Image abroad or branding | 2020 | 2021 | 2022 | 2023 | 2024 |
| The image abroad of your country encourages business development | |||||
| Puerto Rico |
– |
– |
– |
5.35 |
5.54 |
Digital transformation is also improving:
| Digital transformation in companies | 2020 | 2021 | 2022 | 2023 | 2024 |
| Digital transformation in companies is generally well implemented | |||||
| Puerto Rico |
– |
– |
– |
5.17 |
5.36 |
Scientific research legislation is another strength:
| Scientific research legislation | 2020 | 2021 | 2022 | 2023 | 2024 |
| Laws relating to scientific research do encourage innovation | |||||
| Puerto Rico |
– |
– |
– |
5.75 |
5.87 |
What does it all mean?
Puerto Rico gets a ranking of #49 of 76 economies, #4 of 10 locations in the Americas. That’s cheering. In case you were wondering, Singapore was #1, followed by Switzerland and Denmark. the United States was #12. Puerto Rico was right below Greece and Jordan, ahead of the Philippines and the Latin American nations.
However, Puerto Rico’s data shows lots of gaps. Areas like health infrastructure and educational spending had data for just one or two years. In fact, very few items had data for all four years.
This is a common problem for Puerto Rico. When it’s time to allocate resources or identify needs, a lack of information often prevents informed decision-making.
The IMD identifies some other issues they think make Puerto Rico less competitive. For one thing, they feel that Puerto Rico doesn’t do a good job of recruiting and retaining local talent. The loss of population to the states is certainly a sign of that.
Another concern is that it is complicated to do business in Puerto Rico. The high tax burden for businesses (apart from those that get special deals under Act 60) and the cost and instability of energy are also problems. We don’t find this amazing.
Capacity and potential
The general improvements in scores for Puerto Rico — when we have the data to see those improvements — is good news. We believe that Puerto Rico has excellent capacity. With the level playing field that statehood will bring, Puerto Rico will be in a strong position to develop economically and enjoy the same prosperity as the other states.
Reach out to your congressional reps and ask them to support the Puerto Rico Status Act. We need that support to reach our potential.
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