The End of 936: Crisis as Opportunity

    "There is nothing so bad, for which good will not come its way," goes a old Puerto Rican saying that we should keep in mind these days.  With the end of the 936 tax exemption, a number of companies have announced they will be closing their doors towards the end of the year, increasing local unemployment.   During the last two weeks, four companies closed and the firing of hundreds of income-earning family members.  More are certain to follow.  But, before we began to worry to much and let panic blind us, we should remember that the occasion is a good opportunity to create a new and genuinely 'Puerto Rican' economy.  The 936 economic incentives created an artificial economy with base on 'foreign' companies, principally of US origin. (Such corporate flight is somewhat ironic if we consider that the 936 elimination was principally due to then governor Pedro Rossello's (PNP) statements toward the middle of the 1990's.  The autobiography of then Senator Daniel Patrick Moynahan (NY) aptly describes the events.)  We live a 'false reality', as some independentistas claim.   From a strictly economic point of view, the presence of such companies reduced the incentives toward local  entrepreneurism.  Why begin company and assume its costs if others had already done so?  The closing of such companies finally opens up a financial space for the puertorican businessman.  It is not that our history is 'ending'--just the opposite.  It is now that the good part of the story begins.