Let’s Keep It Local People!!!

 

christmas in puerto ricoNobody does Christmas quite like Puerto Rico.  The celebrations start immediately after Thanksgiving, and go onto into mid-January. Forbes Magazine once named it one of the World’s Top Christmas Destinations.  You’ve got your coquito, your pasteles, your léchon. Friends show up at your house at all hours of the night for a parranda, the Puerto Rican version of Christmas caroling, but noisier, with lots of food and adult beverages.

Then there are the presents. Puerto Ricans love to give, and the giving goes on for weeks. Not only are there presents on Christmas Day, but there are presents again on January 6th, the Epiphany. Better know as Three Kings Day, this the day when the children of Puerto Rico expect even more gifts from the original bearers of Christmas presents.

This year, the normally joyous season is juxtaposed against the dispiriting reality of our local economy. You can’t go for more than 24 hours without hearing complaints about how horrible things are in Puerto Rico. Unemployment is at 14%, almost 2.5 times the U.S. rate of 5.8%. The local economy has shrunk by 19% since July of 2005 and the population has declined for 8 straight years, as the second largest Puerto Rican diaspora in history continues. The crisis casts a serious pall over what has traditionally been the best time of the year on the island.

So what’s a Boricua to do in the face of all this dour news? GO SHOPPING! You heard me. Because if the gift giving goes on for weeks, the shopping goes on for months. But here’s the caveat:  SHOP LOCAL. Spend your money here – on the island. Resist the tempting option of on-line shopping this year. The single biggest driver of any country’s economic growth is its consumer spending.

In Puerto Rico, consumer spending accounts 60% of our economy; in the US, it is almost 70%. With less disposable income than ever, it is also more important than ever that that spending stays local. Ordering that video game your teenager wants from Amazon does nothing to help our local economy – going to get it at your neighborhood Best Buy or Costco does. The money you spend here gets reflected in the sales for that local store, which helps keep that local person employed, which keeps our economic cycle spinning here, locally – on our island.

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I know, I know, I know – it is easier and maybe sometimes cheaper to order that video game on-line. You don’t have to fight the crowds of shoppers at Plaza las Americas or circle the parking lot 3 times to find a space. On-line shopping may save you a bit of money, some time, and keep you out of the tapón. But in the end, the time or money you saved using your powerful consumer spending off-island just keeps our local economy stuck in its downward spiral.

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So take the pledge to SHOP LOCAL. Unless you absolutely can’t get the gift you are looking for here on the island, avoid on-line shopping. Use the SHOP LOCAL pledge as a way of rediscovering the good in Puerto Rico: spend an afternoon shopping with friends in Old San Juan and enjoy the festive street decorations; buy presents at Plaza las Americas and catch dinner and a movie afterward; or try shopping at one of the many artisanal fairs in the island towns.

SHOP LOCAL and use your personal consumer power to help improve the Puerto Rican economy.  Because the well being of this island is too important for us not to each take responsibility for it.

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Can a Country Create a “Customer Experience”?

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In 2012, Puerto Rico enacted law 22, or the Individual Investors Tax Act, in an effort to bring high net worth individuals to the island. The goal is to have them invest in the local economy and help pull it out of it’s 8-year and counting recession. The law creates a tax haven for investors and traders, once they become bona fide residents, by allowing them a 100% tax exemption on all dividends, interest and short-term and long-term capital gains on income earned in Puerto Rico.

To date, about 300 individuals have taken advantage of the law and have moved lock, stock and barrel to Puerto Rico. The average net worth of these individuals is roughly $7 million, although there are one or two billionaires in there. So if you invite a whole bunch of wealthy people to upend their comfortable lives and help you re-start your economy, what can a country do to ensure a positive customer experience? Because that is what these migrants essentially are: customers.

This type of customer is every entity’s dream. And their nightmare. Yes, this customer has more money than they know what to do with. But because of precisely that, they may be the hardest customer to keep happy.

All kinds of companies have stepped up to the plate to assure the newly minted Puerto Ricans that they can replicate their lives here. Sotheby’s opened a real estate office here. Government officials set up a conference to educate them about private schools, recreational activities, the arts and philanthropic opportunities. Beachside towns, such as Dorado, have pulled out all the stops to lure the island’s latest immigrants to their communities. The settler’s themselves have set up their own non-profit organization, The 20/22 Act Society, to foster a sense of community amongst other individuals and entities coming to PR for the tax incentives.

Will the government’s experiment to bring in a few hundred millionaires have a significant impact on the Puerto Rican economy? Will they be able to provide their new found citizens with the kind of “customer experience” that will help them adapt and flourish? They may have come here for the tax breaks, but how much of their lifestyle are they willing to give up in return? Only time will tell.

A significant part of the equation will depend on how happy they are living their lives here.  The government can try very hard to entice them to remain in Puerto Rico by cutting their tax burden. Still, there’s that old “money can’t buy happiness thing”. And in the end, if they aren’t happy, they might just start remembering the words of Benjamin Franklin, “In this world nothing can be said to be certain, except death and taxes.”

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