Bogotá — Puerto Rico is looking to bolster trade with its Central American neighbors, and is focusing on Panama, a major regional investment hub that posted exports worth more than US$29.5 million to the Caribbean last year. A US Commonwealth, the island’s government is looking to strengthen bilateral relations with Panama through trade missions designed to identify investment opportunities. The latest one took place this month.
Official figures show that between 2021 and 2022, Panama significantly increased its exports to the Caribbean, with agro-industrial and industrial products shipments rising 25%. Among the key markets importing Panamanian products in the Caribbean are Puerto Rico, Jamaica, Bahamas, Curacao, and the Dominican Republic.
This year, Panama has exported 145 products to the Caribbean through 113 companies.
In an interview with Bloomberg Línea, Governor Pedro R. Pierluisi elaborated on the scope of the mission and the government’s strategy to bolster trade and tourism. He emphasized that the visiting delegation included companies from the food sector, cleaning products, personnel recruitment, entertainment, senior health services, and technology, among others. In turn, pharmaceutical, tourism, construction, and renewable energy companies in Panama expressed interest in the opportunities available in Puerto Rico.
“The establishment of collaboration between the Government of Panama and our economic development team will facilitate the entry of entrepreneurs into our respective economies. This will benefit both our peoples,” he stated.
During his visit to Panama, the Puerto Rican Governor held meetings with President Laurentino Cortizo. The Secretary of Puerto Rico’s Department of Economic Development and Commerce, Manuel Cidre Miranda, highlighted Panama’s strategic location as a financial and logistical center for the Americas, in no small part due to the Panama Canal and its more than 60 banks. This makes Panama an ideal partner for Puerto Rico to expand its exports in the region, and Panama can play a pivotal role in Puerto Rican entrepreneurs’ foray into Latin America, he said.
For the Governor, this strategy will be crucial to increasing Puerto Rican exports to Panama and to share technical expertise and experiences between businesses. The island’s economy has been fragile since Hurricane Maria and the COVID-19 pandemic. According to the Puerto Rico Planning Board (JP), the island’s economy is projected to grow by a modest 0.3% this fiscal year and 0.8% by 2024.
Debt restructuring and a “new era”
After accumulating debt of more than US$70 billion, the island completed a crucial debt restructuring last year to stabilize its finances. Now, Puerto Rico is reaching out to its neighbors in the Caribbean and Central America to promote investment opportunities in technology, renewable energy, pharmaceuticals, real estate development, and construction.
“We want new partners to work on realizing our potential in this new era,” commented Pierluisi. According to the Governor, Puerto Rico has left behind a period of fiscal crisis following last year’s successful restructuring of the government’s public debt, “which removed a cloud of uncertainty.”
In this regard, he noted that “Government revenues have consistently increased, while industries like tourism are breaking records. Manufacturing has been extremely resilient, and the construction, energy, and renewable energy sectors are all experiencing highly encouraging growth for Puerto Rico’s economy.”
Specifically regarding tourism, he pointed out that in 2022, approximately 10 million passengers passed through San Juan’s Luis Muñoz Marín Airport. In the first quarter of 2023, the government has already reported a 10% increase in visitors compared to the same period last year. Pedro R. Pierluisi believes this could indicate that the island is establishing itself as a year-round destination.
Tourism in Puerto Rico generates around 95,000 direct jobs, attributable in part to the activity of approximately 177 hotels with around 15,000 rooms. Meeting and convention sales have risen from US$88.3 million in 2018-2019 to US$160 million in 2022-2023.