Economist Gustavo Vélez gives his opinion on The New Day on Economic Incentives: Lessons from the Past and the Future of Law 60

Recently, economist Gustavo Vélez shared his perspectives on economic incentives in Puerto Rico, highlighting their historical importance and current challenges. Vélez stresses in his opinion column, published in El Nuevo Día on Wednesday, May 29, 2024, that incentives have been “a backbone for the island's economic development” from the time of Section 936 to the current Law 60. We invite you to read the full article of El Nuevo Día here.

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Economic Impact of Law 60

According to analysis by the Department of Economic Development and Commerce (DDEC), almost all economic incentive programs under Act 60 have a positive return. In particular, manufacturing generated $2.3 billion in tax revenues, while the individual relocation program, known as the former Act 22, had an impact of $144 million and created 27,570 direct and indirect jobs. Former Law 20, which encourages the export of services, also showed positive results with 74,018 jobs and $418 million in tax revenues.

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Challenges and Criticisms

Vélez also addresses criticism of Act 60, comparing them to the attacks on Section 936 in the 1990s. He argues that these attacks, without solid foundations, respond to ideological and political agendas that seek to discredit efforts to attract investment and improve the business climate in Puerto Rico. It calls on detractors to examine history and learn from past mistakes, stressing that the elimination of Section 936 in 2005 led to a deep economic crisis on the island.

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Lessons from the Past

The economist emphasizes that Law 60 is the closest program to the successful industrial promotion model of Section 936, although with a more diverse approach that includes not only manufacturing, but also tourism, agriculture, cinema and the export of services. Stresses that, with appropriate promotion, the Law 60 program has the potential to create up to 112,876 direct and indirect jobs between 2024 and 2030.

At Impulso Boricua, we share Vélez's vision of the importance of economic incentives for the future of Puerto Rico. We firmly believe in the transformative potential of Law 60 and remain committed to promoting its positive impact on our island.

For a more complete and detailed view of Gustavo Vélez's opinions, we invite you to read the full article in El Nuevo Día here.

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