The approach I use involves a scoring system with five risk areas that are each scored from one to five, with five being the strongest (least risky) and 0 being the weakest (most risky). The sum of the scores total 25 points. A political risk score of 25/25 is a perfect score or a very safe investment. The Commonwealth of Puerto Rico is assigned a score of 9/25, meaning the island is a highly speculative investment. Support for each of the risk scores can be found below.
Executive Summary
Puerto Rico’s credit risk is speculative in a high degree and the situation on the island has reached crisis levels. The island’s government effectively defaulted on its bond obligations in June 2015, seriously limiting its ability to access the
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The Spanish-American War put the island in the center of the shifting power dynamics between Spain and the United States. After a war and a quick victory, the United States assumed power over Puerto Rico and the two cultures began their complicated political and economic union. As a possession of the United States, the Commonwealth’s economy became directly and often times disproportionally affected by changes in United States policy. The dependent relationship was adopted by both sides with a series of incentives passed by congress that encouraged mainland investors to move money to the island, and the commonwealth passing its own incentive programs to attract mainland companies and investors. The result is today’s dysfunctional Puerto Rican economy that can be described as inefficient and noncompetitive.
The Jones Act of 1920 was one of the major pieces of legislation that fostered the dependent relationship. The Act calls for all products entering or leaving the island by water to be transported by United States vessels. The law was intended as a protectionist measure for U.S. shipping companies, but it created a huge inefficiency where shipping companies will offload and reload products in Florida before heading towards the island. The result is significantly inflated prices on the island, a problem that still exist today, and the lost opportunity in Puerto Rico never developing its
After the expansion and conquest of the United States in the former territories of Mexico during the first half of the 19th century, the great world powers disputed colonies for reasons of economy. A country was more powerful as its influence and currency were felt in more territories and colonies. Cuba's geographic closeness to the United States, the sufferings of Cubans and the cruel practices imposed to achieve pacification of the island, excited the compassion and indignation of the American people. Many Americans owned properties in Cuba, American families were related to Cuban families, and the United States had a flourishing trade on the island. On the occasion of the war, the properties were destroyed and the business ruined.
Juan Gonzalez discusses the historical relationship between Puerto Rico and the U.S. in Harvest of an Empire, interestingly enough the author’s family were a part of the surge of Puerto Ricans emigrated to New York in 1946. With the signing of the Treaty of Paris the Spanish-American War came to a close with Puerto Rico now under the control of the U.S. along with Cuba, Guam, and the Philippians. In 1900 the Foraker Act established Puerto Rico as a U.S. territory, but it had less autonomy than when under the control of Spain. The Foraker Act allowed the U.S. to dominate the economy of Puerto Ricans by replacing the peso with the dollar and not allowing for any outside commercial treaties. Challenges were unsuccessful with the dreadful ruling
The Jones Act prevents foreign-flagged ships from carrying cargo between the US mainland and noncontiguous parts of the US, such as Puerto Rico, Hawaii, Alaska, and Guam.
Most Americans, don’t know how Puerto Rico got the way it is and like Nelson said many believe that the debt we have is one that was 100% our fault. However, most don’t understand the deep history and relationship Puerto Rico has with the United States and how the way we have and continued to be treated has a lot to do with the debt Puerto Rico
Since the end of the Spanish-American War in 1898 the United States has proclaim the Commonwealth of Puerto Rico under United States territory. Spain handed Puerto Rico over to the United States as spoil of war and to liquidate its war debts. To this day, the political, economic, and cultural impact of the occupation and subsequent" annexation" of Puerto Rico as an unincorporated territory remains subject to controversy and debate. The real polemic of this idea resides on the influence of the United States to held full responsibility for military, monetary, and foreign affairs. The Popular Democratic Party, led by Luis Muñoz-Marín, and the United States in 1952 adopted Puerto Rico’s current Commonwealth status as a global wave of decolonization. Even if this create the local government and the Constitution that will always be subject to be veto from Congress. In 1950, the U.S. Congressional and Administrative Service reported that the bill establishes that the Commonwealth “would not change Puerto Rico’s fundamental political, social and economic relationship to the
The once powerful Spanish Empire was hanging onto a thread as Cuba and Puerto Rico were their last two major colonies. Tension between the Cuban people and the Spaniards had been building since the beginning of Spanish reign over the island in 1492. One of the leading issues was the “impact of increased taxation and an international economic crisis” (LOC). Spain was exploiting Cuba for its sugar plantations and treating the locals very poorly. This poor treatment and taxation by Spain would lead to the “Ten Years' War” (LOC), from 1868 to 1878, in which the Cubans
The Health Star Rating System is a government initiative designed to assist in obesity prevention. This essay reviews PriceWaterhouseCooper’s Cost Benefit Analysis of the Health Star Rating System. This analysis of the system concludes that the government should intervene in the Australian food industry via the Health Star Rating System to a significant extent and should focus on the implementation of complementary obesity prevention methods, including increased funding for health awareness and education. This conclusion is based on consideration of equity, efficiency and political acceptability criteria.
The attempted assassination of President Truman was an indication that Puerto Ricans would use any necessary means to gain independence. Puerto Rico has been a territory of the United States for almost a century. The citizens of Puerto Rico have always had different views on whether they want independence or greater autonomy. The following essay will focus on the commonwealth status of Puerto Rico and the attempted assassination of President Truman.
I will be discussing how the country of Puerto Rico’s impact of resource scarcity, issues with boundary delineation, separatism and sovereignty issues, poverty, migration, legacies of colonialism and imperialism, global climate change and its impact. The once poor nation of Puerto Rico now seems to be a stepping stone for trading in the Caribbean. With its location in the Caribbean, Puerto Rico is a major asset for shipping lanes. One of the main reasons the U.S. wanted to take over this land. Its geographical location is important in helping to move resources around the world, as well as keeping an eye on Cuba. The economic system of
The economies of Cuba and Puerto Rico are very similar during the 16th, 17th, and 18th centuries. As Spain colonized these two islands in the 16th century under the idea that gold was abundant. Thus in turn the islands became a safe port for Spain and her vessels. It also set out to be a huge migration from the Spain to the islands, because everyone was set to search for gold. . This turned out to be short lived as the mining of gold peaked in 1517 till 1819. By Spain using Cuba and Puerto Rico for mining gold they needed slave laborers as the local Indians. The Indians soon became unsatisfied with their new conditions of living, they became hostile and many not able to cope with being slaves committed suicide and genocide. By 1540 1550
Over time Puerto Rico has been borrowing money from private investors and multiple countries. The time has come for them to pay these investors and countries back, but Puerto Rico does not have the funds to pay them back. Puerto Rico is in high debt that is over 69 billion U.S. dollars caused by the massive amounts of money borrowed from investors, as well as depending on the citizen’s tax money to pay it off; causing an increase in taxes which caused people to flee to the mainland (U.S.).We propose that Puerto Rico should no longer borrow money from other countries, do not raise taxation, and keep the amount of taxes that the citizen of Puerto Rico have to pay realistic. Lastly, we must educate the children who are interested in governmental positions and make sure
Claim: In Macbeth, Shakespeare reveals that one has some control over shaping their own morality to a certain extent, until forces of ambition, which are triggered by peer pressure, lead one to become less moral. One has a certain control over shaping their morality until their ambition and desires take over their mind, leading them to perform inhumane deeds. Macbeth first comes upon the witches, who prophesied that he would be crowned Thane of Cawdor and “king hereafter.” At first, Macbeth is unconvinced, but soon, Duncan’s servants arrive and crown Macbeth Thane of Cawdor, the first part of the prophecy.
“Most Young Lords were the children of the Great Puerto Rican Migration that arrived in the United States after World War II. Under US domination since 1898, Puerto Rico’s agriculture had been destroyed when large-scale absentee corporations took ownership of the land, forcing displaced farmers into migrant labor and low wage jobs. A government program called “Operation Bootstrap” gave tax breaks and offered cheap labor to US
En el tema que estaremos viendo a continuación conoceremos sobre una de las distintas etapas por las cuales pasó Puerto Rico. La depresión económica por la que Puerto Rico pasó fue una muy crucial. La isla estaba en un juego, no pertenecía a España, pero tampoco a Estados Unidos. Los trabajadores dependían de su salario. En Puerto Rico intentaron crear muchos inventos para tener una mejor calidad de vida pero, desgraciadamente, no tuvieron éxito.
It is important to indicate that a country risk analysis is not static. As factors of the analysis change within the country, the risk of investing in that country also changes. These analyses are fluid and are always fluctuating. Changes can be indicative of deliberate governmental action taken by the country while other times the risks may change because of an action other countries have taken. The purpose of this paper is to create a risk analysis for the Republic of Nicaragua and to explain the