For two weeks, the intersection of Cristo Street and Fortaleza Street was the epicenter of the protests that brought down the government of Ricardo Rosselló. Just two days after the embattled politician announced he was stepping down on Aug. 2, a sense of normalcy and joy percolated in the touristy neighborhood.

The scribbling on the walls demanding his resignation disappeared, and the city gleamed in the sunshine, while the concrete barricade that kept demonstrators a block away from La Fortaleza became a memorial of the popular movement as well as a tourist attraction, with locals and travelers stopping by to take pictures.

“What one destroys, one must rebuild,” Lety Díaz told to THE WEEKLY JOURNAL shortly after buying some crafts in a store on Resistencia Street, the new name protesters gave to Fortaleza Street after the massive demonstrations.

Díaz and her husband, Marlon Villagra, participated in the demonstrations but, on this Saturday morning, the couple was back in the area responding to the call of artists like Ricky Martin, who were asking people to visit Old San Juan in an attempt to mitigate the losses some businesses endured during the unrest.

They were not alone. Since Friday, the day after the governor’s ouster, a steady stream of people trickled into the city to celebrate this remarkable chapter in the history of Puerto Rico and to support local businesses.

From the start, concerns arose regarding the repercussions of the political crisis on the investment climate and in the economy. In the midst of the social unrest, some cruises skipped the San Juan port visit. But while some analysts claim this juncture is having a negative effect on the economy, for the president of Oriental Bank, José Rafael Fernández, “it is too premature” to know if this period of turbulence will have an impact on the economy, even in the short term.

José Caraballo Cueto, an economist and assistant professor at the University of Puerto Rico’s Cayey campus, agreed with Fernández that it is too soon to assess the situation and determine if it affected the macroeconomy. He also warned about the risks of drawing analogies with countries were violent demonstrations disrupted the economy.

Old San Juan

Two days after Rosselló announced his resignation a sense of normalcy and joy percolated in the Old San Juan. >Gabriel López Albarrán

“In Haiti, they ousted the prime minister but people died. Roads were blocked, cars were burned and businesses were looted and as a result the economy was disrupted. In France, during the yellow vests demonstrations businesses were looted, it was not that they closed, and yet, I read an article that said the economy as a whole didn’t suffer,” he indicated.

Aside from the mostly peaceful tone of the protests, the situation in Puerto Rico also had another particularity: the picketers were concentrated in front of the governor’s mansion. The rest of the island went about business as usual.

As Caraballo Cueto analyzed the political upheaval, he was aware that some retailers suffered individual losses but others, like restaurants, street vendors, Uber, and taxi drivers generated profits. In other instances, the economic activity was postponed.

“If you need a pair of shoes and Plaza Las Américas is closed, you return the next day or you go to another mall. We have to wait and see what happens to the businesses that lost revenue. Did they recuperate? Was this just a pause?” he indicated.

The cruise ships cancellations, Caraballo Cueto noted, were net losses, but from his perspective, the impact on the economy was minuscule because these tourists usually spend a few hours on the island and don’t shell out a lot of money, aside from this being low season.

Positive Effect

Caraballo Cueto, historian Pedro Reina and economist Heriberto Martínez, concurred that the resignation of a governor that had lost the trust -an essential ingredient for governing- of the people, the federal government, the private sector, and even his own party, is good for the economy in the long run.

For some people, the discontent with Rosselló’s performance began simmering with his handling of the emergency caused by Hurricane Maria almost two years ago and boiled over after the arrest of key members of his cabinet on alleged corruption charges and the leaking of a trove of derisive and profanity-laced messages between him and his advisors.

A legal analysis of the chat’s content, commissioned by the president of Puerto Rico’s House of Representatives Carlos Méndez, identified five possible impeachable offenses, from illicitly using public resources for partisan purposes to misuse of public funds.

“A place where people are willing to face their elected representatives demanding transparency and accountability is a bad place for corruption, but a good place for investment,” argued Reina, an award-winning historian and journalist specializing in contemporary Spanish Caribbean history and the director of the Harvard Puerto Rico Winter Institute.

More than fortitude, according to Reina, the protests have also revealed that Puerto Ricans have developed a wealth of social capital and civic solidarity, two qualities needed to sustain a vibrant democracy and good governance.

However, to maintain a sense of economic and social certainty, Caraballo Cueto, Reina and Martínez proposed that Rosselló should be replaced with a consensus appointee that can restore the credibility and trust in the government and work with all sectors.

Government Reaction

While the debate for the governor’s successor continues, and recognizing the ramifications of the political crisis, Secretary of the Department of Economic Development and Commerce Manuel Laboy announced that he’s met with representatives from the industrial, health, tourism, technology, medical devices, and agricultural sectors to answer questions and discuss the continuity of the business agenda.

“Our commitment is to ensure that Puerto Rico’s economic development continues and is strengthened by new measures and programs, such as the Incentive Code and Permit Process Reform, among other efforts. So we guarantee that investment and job creation projects that are essential for the benefit of the people are not stopped,” Laboy said in a press release.

Other head of agencies joined in to reassure the business and investment community that actions have been taken to palliate the crisis.

Given the concerns, Rodrick Miller, first Executive Officer of Invest Puerto Rico, indicated that his team remains focused. “Although the situation continues to be delicate, the economic development infrastructure continues to operate: decrees continue to be signed, we continue to pursue opportunities and our conversations with potential investors continue,” Miller added.

Brad Dean, CEO of Discover Puerto Rico, also pointed out that the island’s destination marketing organization continues with promotional efforts at the same time it monitors all media coverage.

“We remain a safe destination for tourists and there is no anticipated, at the moment, long-term impact on flight and hotel reservations,” Dean insisted.

Despite government efforts, President Donald Trump suggested Puerto Rico cannot be trusted to manage federal aid and Resident Commissioner Jenniffer González, the island’s nonvoting member of Congress, proposed the appointment of a federal coordinator to oversee Puerto Rico’s recovery.

The day after Rosselló announced he was stepping down, the Federal Emergency Management Agency (FEMA) notified him it would further restrict the island’s access to federal aid and implement a reimbursement process to access reconstruction assistance. Accordingly, Puerto Rican officials must now receive approval from FEMA to draw down funds related to Hurricanes Irma and Maria.

But Omar Marrero, the executive director for the Central Office of Recovery and Reconstruction, said that these control policies are transitory and could be lifted when the new governor takes office.

Reporter for The Weekly Journal. She is a curious and fearless journalist, equipped with 16-plus years of writing. Cynthia received a bachelor’s degree in Spanish and English Literature from Sacred Heart University.

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