Decentralization process highlights island’s diversity
Puerto Rico’s 78 municipalities are eager to become fully autonomous and take on responsibility for regional development programs

Plans are under way to open up lesser-known parts of the island to more visitors.

With a population of 1.6 million, San Juan may be the pulsating heart of Puerto Rico, the arrival point for foreign tourists, and the center of government, but there is far more to this beautiful island than its capital city. Scattered throughout the mountainous interior are stately hill towns, surrounded by pristine beaches along the coast, and over four centuries of unique Spanish Caribbean history. There are plans to open up lesser-known parts of the island to more visitors, so that they can enjoy everything Puerto Rico has to offer.

There is a strong move towards decentralization, with regional administrations eager to take on more responsibility for local development. Puerto Rico actually consists of 78 municipalities, each governed by a popularly elected mayor and municipal assembly. Locally-elected leaders are driving the decentralization debate in a bid to attract federal funding to promote more even economic development across the country. Some of the more important municipalities, such as Ponce, the island’s second largest city, and Mayagüez, the third largest, are home to key economic and infrastructure projects that will set the pace for future growth on the island. The continued development of each of the municipalities will play an integral role in Puerto Rico’s long term progress and prosperity.

New initiatives set to boost Ponce’s economy
The southern municipality of Ponce is one of Puerto Rico’s most exciting development regions and an important maritime trading hub. The city of Ponce itself, home to 188,000 people, is one of the island’s national treasures, known as ‘La Perla del Sur’ (the Pearl of the South). Its historical center, which dates back to 1692, consists of beautiful plazas, churches, highly decorative homes, and glorious fountains. Approximately $500 million has been spent preserving the colonial core in a bid to entice more tourist visitors. One hundred years ago it was the largest city in Puerto Rico, Spain’s capital of the southern region until it fell to the U.S. in 1898.

Mayor of Ponce

Mayor of Ponce Rafael Cordero Santiago, a firm believer in the decentralization process, says local inhabitants are proud of their unique history. He says a lot of work has gone into maintaining and improving the quality of life in the district. “This was once the most important city in Puerto Rico. It was the largest in terms of population and had the biggest concentration of political leaders – from the five governors that Puerto Rico has had, three were from Ponce. It was an artistic and cultural center. We have tried to recapture the life of the city and also the historical zone.”

In economic terms, Ponce has always relied heavily on its port and natural bay for its prosperity. Playa de Ponce Port is the island’s principal shipping port and one of the busiest maritime facilities in the Caribbean, handling tobacco, coffee, rum and sugar cane. Ponce is also an important ship-building center. The Port of the Americas project, a mega transshipment hub due to become fully operational in 2006, will strengthen the region’s maritime credentials. The initiative includes a 1,000 acre industrial development area and free zone that is expected to bring renewed prosperity across large parts of the southern part of the island. Mr. Santiago says the intention is to spread the benefits of the new port as widely as possible.

He believes that the development of the new port has the potential to further catapult the regional economy forward over the next 25 years.

Other infrastructure investments are taking place. New roads are under construction that will link Ponce with the rest of the island and create faster connections. A water treatment plant will allow the municipality to produce approximately 65 million gallons of water each day. New waste water pipelines are being deployed. “This is due to the growth that has taken place in the city,” Mr. Santiago explains.

On the social side, there is substantial investment in the local educational and healthcare infrastructure. The San Lucas hospital has invested $60 million in its first phase of improvements, and has allocated a further $40 million.

Technology is being deployed in academic centers to improve training for the young. “What counts is the universities, the hospitals and the schools where people go. The city has to be prepared for all of this.”

Investment is key to new role for Mayagüez

Mayor of Mayagüez

The western municipality of Mayagüez wants to raise its profile on the international stage. Mayor José Guillermo Rodríguez believes the region can prosper more quickly with greater autonomy, moving away from the centralized decision-making processes in the capital. Key economic initiatives, such as the Mayagüez port and the regional airport in Aguadilla, a former U.S. Air Force base, currently fall under San Juan’s management. These two projects could enable the region to leap ahead given the right encouragement and local leadership, he argues.

Puerto Rico’s third largest city, with a population of over 100,000 people, Mayagüez is one of the most important cities on the island. The center is based around the impressive Spanish-style Plaza Colon, a tribute to Christopher Columbus, whose statue stands in the square.

Mayagüez was one of the areas most affected by changes to tax exemptions following the removal of U.S. internal revenue code Section 936, which hit manufacturing industry hard. Several large organizations have withdrawn in recent years costing thousands of jobs. “Mayagüez started its real economic development in the 1960s and 1970s with the manufacturing industry, especially when Section 936 was approved,” says Mr. Rodríguez. “The biggest concentration of industry was based here. Once Section 936 was withdrawn Mayagüez and the west side were the most impacted by a loss of employment.”

There are signs the tide is turning, however. Investment in the roads system will connect Mayagüez with the rest of the island with a fast modern highway for the first time. The development of Aguadilla’s Rafael Hernandez Airport is also a priority. Mr. Rodríguez is keen to make sure that the Mayagüez harbor facilities are also exploited. “That port is in front of the Caribbean and the Mona Channel, the principal maritime highway that intersects the two Americas. Instead of receiving shipments into Mayagüez, everything goes to San Juan port, which has an overflow of shipments. I am hopeful that the airport and harbor of Mayagüez can be developed to full capacity.”

The municipal authorities have already shown their management credentials. “We acquired the main regional hospital instead of it being transferred to a private company under the health reforms. We succeeded in turning this hospital into a cardiovascular center for the region. Instead of going to San Juan or Ponce for a heart transplant, patients can have the same treatment without leaving town.”

The hospital is proving invaluable to residents on neighboring islands, with patients from the Dominican Republic traveling to Mayagüez for treatment, rather than going as far as Miami or Houston. “What we are saying is that if we developed our own airport we are minutes away from saving lives on many Caribbean islands,” adds Mr. Rodríguez.

Tourism is a key part of the plan to rebalance the local economy. A tourism campaign to promote the Porta del Sol includes Mayagüez as the main focal city on the west coast of the island.
The municipality has set up an agency to promote the west side of the island. “All the promotional tools we need to develop our economy will be ready this year. I hope that in the next five years our tourism industry will play a significant role in Puerto Rico’s economic development.”