October 8, 2010

Los Suenyos de Pan

Pan, Tierra, y Libertad
Ceno de la patria,
la esperanza de la verdad.
El Pan Nuestro de cada dia,
era tan vital de nuestro alimento.
Pero hoy en dia,
la perspectiva nueva de tu encuentro
Primero era pan blanco,
luego fue pan de trigo,
el consejo sigue siendo,
pero el pan es que yo consigo
La mejor dieta,se evita los carbohidratos,
según el doctor Atkins.
Los sueños de pan,se encuentran en mis hallazgos,
y una soledad en la barriga y el plato.

Tierra y Libertad.
Tierra llena de sol, de gracia, y de vida.
¡Tierra que se sembraba el pan ahora se siembra nada!
Solo se produce el plan nuevo,
la nueva era,
el nuevo puerto,
el rico nuevo,
la nueva época
En mi Viejo San Juan.
La tierra, de donde viene la comida,
el alimento se compra, se vende, lo sagrado es segundo.

¿Donde está la libertad?
Se encuentra entre el estado
y el asociado.
El estado se defiende
y el asociado a tu lado.
El ELA es donde vivo, entre
un estado
ya asociado
y libre
solo en mi corazon.

¿Atkins, Tierra, y Asociado?
El nuevo logo
del ELA que falta algo,
el sagrado ante el mercado,
lo barato sale caro,
el gobierno
y el privado,
se encuentra bueno
y se encuentra malo.
La libertad o la muerte.
Se confunde los dos,
lo que la isla se herede,
un orador sin voz.
El Estado Libre Asociado.
¡Nuestra ironia colectiva!
Una creencia dudado,
la muerte de una vida.
El nuevo puerto,
el charco nuevo,
en mi Viejo San Juan.
Parar el tiempo y haciendolo,
los sueños de pan.

September 8, 2009

PPP Authority requesting public commentary on regulations of procurement activity

You know the ELA is in trouble when they are soliciting public commentary on the procurement process. http://p3.gov.pr/Eng/News.html

The following is a my public commentary on regulations governing procurement for Puerto Rico:



PPP should set up a procurement policy board to oversee the procurement policy board rules that govern procurement of public sector resources for various contract purposes. The procurement policy board would clarify procurement rules and policies that pertain to soliciting funds for the purpose of doing business with all public sector agencies and missions (as long as all public sector agencies fall under one public sector jurisdiction).

NYC is an example of a procurement policy board that governs the clarification of procurement policies and rules that determine how contracts are administered.
http://www.nyc.gov/html/mocs/ppb/html/rules/rules.shtml

Although it is important for the government to work effectively and in a timely manner, it should not sacrifice speed with transparency and oversight. Very important.

Also, any office that is responsible for procurement of services cannot simultaneously be in charge of any budget. Budgeting and procurement should be separate, so as to avoid corruption and lack of oversight. Procurement should never be confused with the budgeting process and ensuring that resources are available for the said project.

A procurement policy board should clarify whether existing contracts will fall under a general body of procurement policy that is written under an independent procurement board, and it should determine which contracts fall under this general body of procurement. Ideally, all procurement should fall under a body of procurement rules that are created by an Independent policy procurement board.

The rules on procurement should avoid any language that ties procurement methods to ideology, particularly the preference for "privatization" or "nationalization" but on the the most efficient manner of procuring goods and services for the people of Puerto Rico.
it should be assumed that every manner of procurement may not be the best solution to solving a particular issue for the government and people of Puerto Rico.

Procurement contracts should demonstrate measurable outputs and the contracts should report to an independent committee to determine contract measurables, efficiency requirements, and intended outcomes for the government and the people of Puerto Rico.

Procurement Offices should ensure that funds are available (from an independent functioning budget office), but should ensure that contracts are administered in a fair and judicious manner. Procuring private services should not replace public sector functions, when the costs exceed public sector functions, unless it is deemed that contracted services serve as a low risk investment and does not take away from the basic services and needs that are provided by the government for the people of Puerto Rico.

A procurement oversight committee should review the daily functioning of a procurement office that is implemented with the PPP. This procurement oversight committee can consiste of a public advocate, ombudsman, Independent Budget Examiner, and Comptroller personnel to oversee and audit any procurement practices that are occurring throughout this system.

The stated efficiency goals shoudl exceed the net total increase in resources that were committed to creating the PPP process inthe first place. So if an additional net $1million are added (after some existing resources have been allocated for this purpose) to implement this system, then the PPP stated goal is to exeed $1million in savings throughout the system, whether by contracting out existing services, re-allocating existing contracts to more efficient vendors or re-examining other contracts to extract savings.

September 4, 2009

national infrastructure bank act of 2007

http://dodd.senate.gov/multimedia/2007/080107_InfrastructurePacket.pdf

Response to Posting CPR for a Flatlining Economy

CNE Blog was launched recently, very new, and very interesting commentary on solutions to economic problems facing the island's economy. I was surprised to hear about the "famous Keynesian" stimulus plan, although the island's fiscal policy response (like many states) has been contractionary, or to cut spending and increase taxes.
I think some of the things to simultaneously keep in mind when coming up with recommendations and possible scenarios for responding to the economic crisis in Puerto Rico is to ALWAYS keep in mind how the hell the PR economy got to where it's at. It has nothing to do with a particular political party. But I think that many economists would agree that Puerto Rico's economy has become much more dependent to the US economy. And regardless of your preferred island status, economic dependency towards the mainland United States exposes and undermines the island's economic stability. Regardless of your feelings towards the island's status, everybody knows NOW that many states (and cities) in the United States have fared better than others because certain economies have diversified and become less dependent on one particular sector or region. The same rule applies to Puerto Rico. For much too long, PR has drifted towards economic dependency on the mainland US, an obscure economic relationship that has driven the island's economy into disaster.

What to do now??? Long term stuff

If the island values enhancing their infrastructure (roads, bridges, public transportation), it must support and lobby for the National Infrastructure Bank Act of 2007, created by Senator's Dodd and Hagel. This bank will support implementing a national covered bond will utilize the federal government's leveraging ability to amass local municipal bonds together and avoid systemic risk for investors. It's not the tell all solution solver for PR's problems, but since their bond ratings have suffered (probably more so than other municipalities nationwide), it has very much to gain, and very little to lose in standing behind this bill.


I do concur with AD=C+I+G+NX as a national model for looking at the economy.

If the government is going to increase their spending, I would say that SMART government spending is better than ANY government spending, yes. The same way a private business must be conscious about their capital investments, so a government must be concerned with increasing the overall tax base (for the long term, ie, inflation, productivity growth, etc.) and providing better services for the economy.

If the government continues to cut spending and increase taxes, it will perpetuate the recession, since these policies are contractionary. But there is something more complicated than this. On the revenue side, if there is a gap of $3.2billion, why can't corporate taxes cover about half while the government either finances the other half and/or cut additional spending.

I think the short-term recommendations to appoint an economic reconstruction "czar" is in order because it will allow the government to re-dedicate a portion of its resources to allocate funding in an efficient manner. But the goals of "czar" MUST produce savings that will offset the new office, and the distribution of the office's funds.

Solution 2 on Multiplier Effects
Although construction IS one of the largest multiplier effects, one must keep in mind how much of the housing market (that started the economice decline nationwide) contributed to the expansion of the construction industry. Construction should focus primarily on public infrastructure projects as indicated in the report (roads, low-income housing, hotels), BUT should also include transportation improvements as well.

Medium Term Recommendations
I think that private sector development should be focused on small business development that has a local consumption and customer base. Many of the school reforms that were addressed for medium term recommendations are intimately connected with the resources that students have outside of schools, particularly after-school and other extra-curricular programs, and other career track programs (that continue to be cut nationwide for budget balancing).

I think a larger more aggressive approach is to reform shipping (export and import) laws that allow a larger possibility of imports and exports for the island's economy. This will not only primarily decrease shipping costs to and from the US but also open ports regionally as well.
More to come on international shipping and trade...

August 25, 2009

Old Post with some interesting relevance to covering budget deficit in ELA

http://www.prensacomunitaria.com/sector-publico-y-privado/sector-privado/corporaciones/249-corporaciones-deben-1400-millones-a-hacienda.html


"Mientras la reducción en la nómina gubernamental recibe la mayor atención en la discusión pública sobre la crisis económica del País, la legislatura sigue aprobando leyes sin saber el impacto que tendrán en los fondos públicos."

August 24, 2009

Public Private Partnership Authority?

I recently submitted an email to the newly created Public Private Partnership Authority, asking if the creation of the Authority would increase the government's operation expenditures, and by how much? I also asked what savings and efficiencies does the Authority anticipate through its proposed operations, given the island's fiscal climate.

I also wanted to know what performance metrics or scorecards will be used to determine if a contractor is providing the right kind of service at a minimum reasonable cost? Will the PPP Authority come up with a procurement rules to determine what are reasonable terms and conditions for existing and proposed vendors?

I was also curious to know what oversight will be needed for the PPP Authority, especially if the PR Treasury, GDB President, and Planning Board President reside over island government contracts. This is nothing personal against the people in those positions, as much as this question arises from the apparent conflicts of interest that contracts/procurement has with budgetary/fiscal functions in government.

I also asked if redundances in services can be eliminated in other ELA agencies in order to eliminate wasteful spending in government operations.

Hopefully, I can post their response as well.

response to fiscal situation report and structural deficits

On page 2 of the Fiscal Situation report, the term "structural deficit" was defined as "...the excess of recurring expenditures over recurring revenues." The report goes further saying that "...It thus may be necessary, at some points in the analysis, to make subjective analytical judgments as to what items should or should not be included in calculating the structural deficit..."

I have no problems with that approach. Every quantitative analysis MUST lend itself some degree of subjectivity, particularly its philosophical approach in identifying the issues, and coming up with solutions. These are quite standard and normal in any scientific observation.

The report states that the structural is $354million less the stated ELA structural, because early retirement plans from EQ Board, interest payments on TRANS, swap transactions, and GDB loan payments should not be a part of recurring expenses. Fair enough.
But I was wondering why CNE feels these line items are non-recurring expenditures.

Also, if the structural deficit is between $3.2b to $2.8b, then what would be the solution proposals for this? Will PR decide to further reduce operating expenditures? And if so, from where would these reductions/savings go to? Will the ELA increase the total revenue base by increasing taxes and if so, where?

Although unpopular, I did support imposing the IVU or sales tax because not only did it increase the ELA base, but it supposedly offset inflation and spending, something that the island's economy (and the U.S.) has been too dependent on (70% of GDP?). This dependency exposes the island's economy to a larger risk of prolonged recessions, despite short term fiscal stimulus spending.

I think PR has to consider a combination of cutting operating expenditures with raising revenues, 2 items that are contractionary, but can be offset by re-structuring the island's debt payments, and invest in capital projects that crowd in investments inthe island's metropolitan periphery, not its center. That way, investor confidence will not be as high enough to absorb systemic investor risk (investor pull-out) and enough capital flows will continue at a sustainable pace.