Solving the Unsolvable

In the early 1940s, a U.S. Senate committee declared Puerto Rico's problems "unsolvable." The Caribbean island had a rapidly expanding population, few natural resources, hardly any industry, and chronic unemployment that sometimes ran to one-third of the labor force. In 1942, a rising young politician named Luis Munoz Marin organized a self-help program called Operation Bootstrap; a few years later, as Governor, he invited U.S. companies south, offering them political stability plus wide tax advantages and a vast reservoir of eager-to-learn labor. Ever since, Puerto Rico's economy has been one long, steady success story.

The first ten years tripled the island's gross national product to $1 billion; the next ten raised it to $2 billion. Last week, totting up the figures after 21 years of Munoz and Bootstrap, Puerto Rico's Economic Development Administration could report a breakthrough to a G.N.P. of $2.2 billion. Unemployment is down to 12.8%, and while the population grows by 2.4% each year, per capita income is now $740 annually --low by U.S. standards, but still the second highest in Latin America, surpassed only by oil-rich Venezuela. Things are so much better that migration of Puerto Ricans to the U.S.--running as high as 75,000 in 1953--dropped to 4,800 last year.

TV & Traffic Jams. Those who fled earlier would hardly recognize the place today. Many of San Juan's slums remain, but they are gradually giving way to handsome low-cost housing developments. Four-lane highways stretch out from the capital, and are clogged with the kind of traffic jams that come from having one car for every twelve people.

The first TV station went on the air in 1954; today one out of every two families owns a set. The average workingman's wage is $1.11 an hour. Conditions are still primitive in some of the interior hills, but there are strong vocational training programs and plenty of job opportunities for skilled workers in the new plants going up. Lured by ten-year tax exemptions and joint Puerto Rican-U.S. financing, U.S. investors are pumping money into the island at the rate of $1,000,000 a day.

A total of 52 major U.S. firms have plants in Puerto Rico (see map). Last year alone, 160 new factories opened their doors, raising the island's total of "Bootstrap" plants to 1,030. G.E. is producing switches and circuit breakers. Sperry Rand is making electric shavers. Maidenform is making bras, and Brunswick, sporting goods. This summer Ford will open a $15 million precision ballbearing factory near San Juan. To keep the momentum going, Puerto Rico is stretching tax exemptions to 17 years in some cases, plans to build small manufacturing plants on its own, then find companies to run them.

Second Thrust. Providing a powerful second-stage thrust is the island's tourist business. Last year a record 465,000 visitors came to Puerto Rico (v. 118,000 in 1953) and spent $80 million. This year the island is counting on 500,000. To accommodate them all, San Juan hotelmen expanded their lodgings 36% in fiscal 1963--contributing to a building boom that added $325 million to the economy and provided jobs for 50,000 people.

To hear Governor Munoz Marin talk about it, Puerto Rico, which became a commonwealth in 1952, is just getting started. As he says, when asked where Puerto Rico goes from here: "Man, we are not even here yet!"

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