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Home > About GDB > History

History

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The Sixties: A Turning Point

The 1960's marked another turning point in Puerto Rico’s industrialization. During the forties and fifties, Puerto Rico Industrial Development Company (PRIDCO) had been most successful in attracting light, labor-intensive industries to the island, to the point that by 1967 Puerto Rico had become the leading clothing supplier for the U.S. market. But basing an economy on labor-intensive industries was risky, because their relatively small investment in plant and equipment meant they could easily move elsewhere.

So the Commonwealth began to focus more on attracting heavy, capital-intensive industries anticipating that they would offer a greater element of stability. Among the industries targeted by the government were oil refineries, chemical industries, tuna canners, pharmaceuticals, electronic manufacturers, steel mills and heavy equipment manufacturers. While these industries generally created fewer jobs per dollar invested than the labor-intensive industries, they often required skilled workers that could garner higher salaries than those paid by light industry. And because of their huge investments, they were less likely to leave when their tax exemptions expired.

This effort to diversify the island’s economy proved successful. By 1968, oil firms had invested $321 million in refineries and related industries and created more than 2,000 jobs. By 1969, there were more Puerto Ricans employed in the tuna canneries than in sugar cane harvesting and processing. And by 1972, 47 pharmaceutical companies had established operations in Puerto Rico.

In 1960 GDB also led the way in promoting an amendment to the Constitution of the Commonwealth of Puerto Rico that set limits on the amount of public debt the island could issue. The amendment established that debt service could not exceed 15% of the average local revenue income for the two previous years. The setting of this debt limit was important to investors interested in buying Puerto Rico’s bonds.

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