Puerto Rico

C

Mining

Almost all of Puerto Rico’s mineral production consists of construction materials, notably sand, gravel, stone, and material used in the manufacture of concrete. Other minerals are clay, graphite, lime, and salt.

D

Manufacturing

Over the course of the 1980s and 1990s, manufacturing’s portion of the island’s labor force declined from 20 percent to 15 percent by 1999. Nevertheless, manufacturing produced in 1999 about $26 billion, which amounted to 70 percent of the GDP. In terms of employment, one of Puerto Rico’s leading manufacturing industries is apparel making. A modern apparel industry evolved from a small-scale labor-intensive needlework industry of the 1940s. By the 1990s most apparel plants were branches of mainland U.S. firms. San Juan and Mayagüez are the leading centers for making clothing. Large numbers of workers also produce chemicals, electronic equipment, and processed foods. Other major manufactures include pharmaceuticals, industrial machinery, printed materials, rubber and plastics, metal items, furniture and fixtures, and leather products.

Since the 1940s the government has encouraged manufacturing by offering incentives such as tax exemptions, loans, and research assistance. The leading government agency for encouraging industrial development was the Economic Development Administration, created in 1950 and generally known as Fomento (Spanish for “development”). Fomento’s mandate was to attract manufacturers to the island. To carry this out, Fomento sold or leased plants on favorable terms. In addition, the government waived business income tax dues for several years. Many large American manufacturing companies established plants in Puerto Rico, attracted by tax benefits and wages that were lower than on the mainland. In the 1990s the Puerto Rican Industrial Development Company (PRIDCO), a subsidiary of Fomento, became responsible for the industrial development of Puerto Rico.

In 1996, as part of budgetary cutbacks on the mainland, the U.S. Congress voted to eliminate over a ten-year period the tax incentives for American companies investing in businesses in Puerto Rico. To counteract the economic losses caused by the phase-out, the Puerto Rican government established a series of local tax incentives to keep or attract new companies to the island. These included a maximum 7 percent business income tax rate, tax incentives for research and development, and deductions for the costs of job training.

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E

Tourism

The year-round warm climate in Puerto Rico and its abundant sunshine and coastal beaches attract millions of tourists each year. Tourists were an insignificant source of income before 1940, but the Puerto Rican Tourism Company has promoted tourism with great success. A little over 3.7 million tourists visited the island in 1999. Some 1.3 million tourists arrived via cruise ships. Their primary destination is the San Juan area, the location of numerous luxury hotels. In 1992 the island had 8,400 hotel rooms, but by 2001 this number had increased to 12,400 rooms. This expansion greatly helped not only the tourist industry but the construction industry as well. Tourists spent $1,142 million in 2005.

F

Transportation

Puerto Rico is the transportation hub of the Caribbean. The island’s international airport, Luis Muñoz Marín International Airport in San Juan, is one of the largest and busiest in the Caribbean. Local airline service links San Juan with the other cities on the island as well as with various points in the Caribbean. International airlines connect San Juan with the Americas and Europe. The San Juan port facility is among the top ports in the world for container shipping.

Although transportation facilities have been expanded to meet the requirements of the expanding Puerto Rican economy, transportation facilities outside of San Juan are generally much poorer than on the mainland United States. Trucks move most internal business traffic, and the island’s limited railroad system hauls sugarcane.

G

Communications

In 2002 Puerto Rico had 47 AM and 32 FM radio broadcasting stations and 10 television stations, and cable television is available. The commonwealth’s first radio station, WKAQ in San Juan, began operations in 1922. WKAQ-TV in San Juan, Puerto Rico’s initial television station, first went on the air in 1954. La Gaceta de Puerto Rico, the island’s first newspaper, was initially published in 1807. Influential newspapers in Puerto Rico now include the Spanish-language El Nuevo Día and El Vocero de Puerto Rico and the English-language San Juan Star, all published in San Juan.

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