Minority companies fear impact on their growth and sustainability
Carlos Aponte Inostroza, EL VOCERO, December 12, 2024
PRMSDC executives present their fears about the arrival of the new state and federal administrations.
Changes in the state and federal government could generate an economic slowdown that, in turn, could impact the growth and sustainability of minority businesses on the island, according to the Puerto Rico Minority Supplier Development Council (PRMSDC).
“We are in a process of great uncertainty. There is a new federal administration entering (whose) rhetoric sounds worrisome, in which one does not know what is going to happen. The rhetoric here is that there is no historical issue to address, but that expenses must be cut,” said economist Vicente Feliciano.
He also mentioned that in the specific case of Puerto Rico, there is a situation with what the president-elect has said, which causes concern about the particular condition of the island with the United States. To this end, one of Donald Trump’s campaign promises was to reduce a series of taxes on the income of both individuals and corporations, including the payment of Social Security and others, which in his opinion does not benefit Puerto Rico because no federal tax is paid.
On the other hand, Feliciano mentioned that these promises limit the federal government’s ability to be in social welfare programs, from which minority companies benefit. He warns that the proposal to reduce taxes is one to increase tariffs, which the country does pay.
“There are certain concerns and uncertainties regarding what is going to happen and in that sense the work and mission of the council are particularly important in these times,” Feliciano said.
According to data presented by the president of the PRMSDC, Francisco Cabrera, minority businesses in Puerto Rico generate more than 61 thousand direct and indirect jobs, inject over $2.6 billion in payroll and contribute $9.8 billion to the local economy, so they are concerned about their sustainability and growth.
On the other hand, Cabrera highlighted another series of risks faced by minority companies, which in a certain way compromise their sustainable development. An example of this he mentioned: global economic uncertainty, energy costs and logistics.
“This puts the viability and growth of our minority businesses at risk,” Cabrera said.
For his part, the president of the Board of Directors of the Prmsdc, José Quiñones, pointed out that 2025 will be a year of many changes and with them many challenges, but that there will also be opportunities and needs to innovate.
“In the face of these changes in the administration of Puerto Rico, as in the United States and the fiscal positions that these leaders have communicated, a reevaluation of our strengths and areas in which we must develop is required, because the circumstances, whether we like it or not, are going to migrate us to a global environment where not all sectors have been participants in the past and it is a reality, they represent a risk to companies… minority companies in Puerto Rico,” Quiñones said.
He added that the global playing field requires the public and private sectors to work in harmony, achieving measures that, in the face of this reality, create a fertile and attractive economic ecosystem for doing business in the country, thus increasing tax revenues, but also increasing the attractiveness to attract foreign investment.
In the same way, he stressed that everyone has to collaborate and work towards the same goal, thus making legislative measures feasible that allow them to capitalize on their competencies and be able to attend to those areas that allow them to be more attractive as a country.
“This is very simple, if there is no sustainable economic development, there will simply be no investment,” Quiñones said.
Faced with the situation, the businessmen called on the local government to work fully on issues of incentives for entrepreneurs, in the midst of an economic environment of constant change.
In response to questions from EL VOCERO about what incentives they were referring to, Cabrera mentioned that it is to seek to create equal competitiveness where minority companies have the same opportunities that other non-minority companies may have in Puerto Rico and the United States.
“We have 40% of our companies that export their services and products to the United States and we want to help them connect and get more opportunities, but we are concerned when we see that different legislative proposals are being presented at the United States level that seek to reduce these programs that have to do with diversity and inclusion,” Cabrera said.