By Deepak Lamba-Nieves
Although it is hard to believe, especially in these times of turmoil and unrest socioeconomic time ago Puerto Rico was a role model for many countries seeking a route to development. According to the memories of the old guard, at the height of the Cold War transformation of the island served as an antidote to the communist threat, it also showed that under capitalism could be recorded wild turns positive in the future of territories afflicted. At that time, researchers, bureaucrats and diplomats they turned on our shores to learn from our experience, confident that something good was taking shape in our land.
Among those who visited us were also consultants and American academics interested in testing hypotheses and conduct social experiments arrojasen light on the most efficient techniques for modernizing backward societies ravaged by colonialism and old-fashioned. Renowned economists like John Kenneth Galbraith and Arthur Lewis, who defined the modern debates on the idea of development-roamed the halls of the University of Puerto Rico, and organizations like the International Basic Economy Corporation (IBEC) sent specialists willing to offer advice and decoding solutions. Duly filled tropical experiences journals and technical reports which then served to articulate practices to follow.
For more or less the same time, the Irish were seeking to decipher the way to rebuild its economy after World War II. Leveraging historical juncture, and U.S. funding of European reconstruction plan, commissioned a study to figure out how to make the leap from a livestock economy towards industrialization. The report, entitled Industrial Potentials of Ireland: An Appraisal was written by IBEC Technical Services and was presented the same year that the Commonwealth was born. Addressed to political leaders and government technocrats, in a hundred pages the text summarized the economic pitfalls and raised a number of specific recommendations to seize the assets of a country that had failed to define a clear path to progress. The government did not assume an active role in promoting and industrial management, and lacked incentives to encourage business investment.Ireland faced a critical identity problem: they were not enough decidedly capitalist nor socialist.According to the consultants, in addition to better gauge public policy, they had to use their livestock capacity to generate foreign exchange and raise the capital necessary to assist them to promote manufacturing.
Interestingly, in the final chapter of the report, almost hidden between paragraphs precise and full of suggestions, is an example that proved revealing and possibly controversial: Puerto Rico. In half a page, IBEC specialists They reported how the island had attracted Northern companies and erect a light manufacturing enclave advantage of its relationship with the United States, the availability of cheap labor and competitive tax rates. Although it was a key piece of analysis, the Caribbean case struck a chord in the imagination of the Celts and the Puerto Rican model became the paradigm, especially the issue of tax rates.
In Ireland it took time out of the postwar economic quagmire while Puerto Rico looked like the soap opera heartthrob until the mid seventies. However, with the passage of time and with the increasing globalization of business, the recipe island of Bootstrap became second fiddle. Trying to stay afloat, we returned to the fray with the tax benefits under Section 936, but we were rivals. As good learners, the Irish developed their own scheme and Puerto Rico competing for attention and business of multinational companies.
By the eighties, a leading company that eventually challenged consumers to " think differently ", devised a strategy that took advantage of the tax benefits in Ireland and in other jurisdictions, to evade their tax responsibility but within the framework blatantly of the law. Using abusive arrangement known as a " Double Irish Dutch Sandwich with a "which sounds more gastronomic phenomenon statutory scheme-Apple Inc. achieved without the payment of billions of dollars a year in taxes to the United States, according to a recent survey by the Senate U.S.. As in the nineties, when they accused us of promoting corporate and knocked keep the racket of 936 American lawmakers seeking to correct loopholes walk. More than a tax matter, Apple's gross evasion is discussed as a moral issue: what they fail to pay, we cover the ordinary people who have no creative accounting, and barely make hearts guts.
Our model ossified foreign capital attraction, based on evasion and negotiating preferential rates, which spread like wildfire and unfortunately we became trend setters disreputable-North had as the breakdown of the relationship between the state and the society, despite its harmful results.According to some theorists, the key to this tactic is learning. Persuasion global companies should lead to new knowledge, linkages and opportunities to improve local capacities. It is assumed that after 60 years of praying and giving everything to attract investment, we have accumulated the skills necessary to build a robust indigenous manufacturing enclave. However, this is not our industrial reality, although we have many skilled professionals who solve problems and advise factories worldwide. On the other hand, many of the countries that followed the path we trace the postwar learned to manufacture opportunities today are not within our reach.
Given this situation, it pays to question why we continue to pursue the same tactic expecting a different result. While we were cutting edge at a time, today it is a legacy perpetuate insane.
The author is Director of Research at the CNE. This column was originally published in the newspaper El Nuevo Dia on June 16, 2013.
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