Puerto Rico: Economy

Economy

Manufacturing replaced agriculture as the greatest contributor to Puerto Rico's national income largely because of “Operation Bootstrap” and other measures, which from the 1940s attracted U.S. firms to the island through the use of tax exemptions and duty-free access to the United States. Pharmaceutical, electronics, and apparel industries have been the most important, along with food processing, oil refining, and the manufacture of machinery and chemicals. The 10-year phaseout of tax preferences, which ended in 2006, spurred a loss of manufacturing jobs and led to an end of years of economic growth. Livestock raising (for meat and dairy production) has surpassed the growing of sugarcane as the chief agricultural pursuit in Puerto Rico. Coffee, pineapple, plaintains, and bananas are other leading crops. Reforestation has been undertaken to restore tropical woods in the interior, where the Caribbean National Forest is set apart. Tourism is also a major source of revenue, as is money remitted by Puerto Ricans (about 5 million) living in the United States.

The United States is by far Puerto Rico's chief trading partner. The leading exports include pharmaceuticals, electronics, apparel, canned tuna, rum, beverage concentrates, and medical equipment. Imports include chemicals, machinery and equipment, clothing, food, fish, and petroleum products. Although Puerto Rico has the most diversified and powerful industrial economy in the Caribbean, significant population growth and insufficient jobs have contributed to social and economic problems and to continued emigration.

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