The Weekly Journal - Wednesday, May 19, 2021

Wednesday, May 19-25, 2021 - // no. 108

Puerto Rico and the Caribbean

www.theweeklyjournal.com

The FOMB: Busy as Bees P6 Evertec Sees Big Earnings Jump P7 Triple-S Reports Q1 2021 Results P9

Manufacturers WarY BUT

Ready to Handle Microchip Shortage While the local auto industry is starting to feel the effects

A

>Archive

Giovanna Garofalo

New Fellowships for Puerto Rican Writers P14

ggarofalo@wjournalpr.com

@giopgarofalo

lthough there is growing concern among some economic sectors over the global microchip shortage, Puerto Rico-based manufacturers indicated they are prepared to face this unprecedented technological crisis.

Archer Lebrón, president of the IT and Business Intelligence Committee of the Puerto Rico Manufacturers Association (PRMA), affirmed that these entities have robust contingency plans to handle

“unforeseen circumstances,” including the most recent situation with microchips. “I suppose that many of these organizations have addressed this issue and have prioritized internal training to keep their current operations, anticipating what could be a weakness in the availability of inventories and microchips. I’m sure that they have their own internal agreements and industry agreements, and they have their own inventories,” he told THE WEEKLY JOURNAL. GO TO PAGE 4

The Weekly Journal > Wednesday, May 19, 2021 >

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2021

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Hostigamiento y acoso laboral: un análisis comparativo Libertad religiosa y el lugar de trabajo Recursos Humanos post- Pandemia, PUA y Desempleo Sesgos inconscientes: un peligro en el lugar de trabajo Últimos desarrollos legislativos y jurisprudenciales Política de cancelación: No se aceptarán cancelaciones.

REGISTRO: 787 287 6161 / escapelaboral@escapepr.org

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/ Wednesday, May 19, 2021

a week in review U.S. Treasury Allocates Over $4 Billion to Puerto Rico

>Archive

>Courtesy

The U.S. Treasury Department announced that Puerto Rico will receive more than $4 billion under the American Rescue Plan to respond to the COVID-19 pandemic and reactivate the economy. The funds help local governments to meet local needs, including supporting households, small businesses, industries, essential workers and communities hardest hit by the crisis. The funds can also be used to invest in water, sewage and broadband infrastructure.

Hospital de la Concepción to Open Prolonged Care Center With an investment of $8.1 million, the creation of 150 jobs in the construction phase and 50 direct jobs during its opening, Hospital de la Concepción in San Germán has begun construction of its new Skilled Nursing Facility, a long-term care center for senior citizens with medical conditions that require 24-hour nursing care and rehabilitation therapies.

The new facility should be ready for operation in July 2022.

Powered BY El Vocero de Puerto Rico, 1064 Ave Ponce de León 2nd floor San Juan, PR Postal Address: PO Box 15074, San Juan, PR 00902

President Salvador Hasbún shasbun@elvocero.com Vp of Marketing and Business Operations Michelle Pérez Miperez@elvocero.com

El Conquistador Resort Reopens This Week After being closed for more than three years due to severe damages wrought by Hurricane Maria, El Conquistador Resort will reopen its doors tomorrow, May 20. The substantial renovation of the Fajardo hotel has an estimated investment of $175 million and its operations will generate over 500 direct jobs once the works are fully completed in 2022.

VP of Accounting Félix A. Rosa frosa@elvocero.com

Human Resources Director Arlene Rolón, PHR arolon@elvocero.com

VP of Editorial Content Juan Miguel Muñiz Guzmán jmuniz@elvocero.com

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Phone: 787-622-2300, 787-721-2300

Assistant Editor/ Reporter Rosario Fajardo rfajardo@wjournal.com

Customer Service: 787-622-7480

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/ Wednesday, May 19, 2021

Jaguar Land Rover said in April that it will suspend production at two U.K. factories due to the chip shortage. >AP Photo/Frank Austin, file

microchip shortage is expected to last until 2022, adding that while the company is bolstering its According to Lebrón, the island has not yet been production, it would take six to nine months to see the supply increase. Meanwhile, Glenn directly impacted by the shortage. However, he O’Donnell, vice president and research director at acknowledged that the present unaffected state the Forrester advisory firm, said that the shortage of productions “does not mitigate the fact that could be extended until 2023. In a blog, he wrote globally, the scarcity of this type of technology that data centers are slated to is real and at some point, it buy more ICs next year. “Couple could affect the availability of that with the unstoppable desire a product; that is, everything to instrument everything, along that we consume in the world of with continued growth in cloud electronics,” such as cellphones, computing and cryptocurrency computers and other electronic This year mining, and we see nothing appliances. alone, 1.5 billion to but boom times ahead for chip Essentially, microchips, 5 billion cars that demand,” O’Donnell stated. also called semiconductors or would have been Despite these possible integrated circuits (ICs), are key manufactured will scenarios on the duration components in computerized not be made due of the chip shortage, Lebrón items, including smartphones, to the microchip expressed confidence at the GPS tracking devices, shortage, and this local manufacturing industry’s contemporary cars, identification would represent capacity to retain its production cards, gaming consoles, and even about $60 billion line, saying that they are medical screenings to diagnose in lost sales, generally braced for even two cancer and other diseases, among according to GUIA. years of shortage. “In general others. terms, all these companies The worldwide shortage at and multinationals, I trust that hand is propelled by gargantuan their contingency plans provide demands for the product, for them to maintain their exacerbated throughout productions in the next 12, 18 and 24 months in the pandemic as more people and industries one way or another.

At least in Puerto Rico, as far are relying on tech items or boosted their as we have heard, we have not felt any kind of technological infrastructures to adapt to the “new threat in the short term,” he asserted, although he normal” of confinement and remote work and noted that the effectiveness of these contingency services, as well as in-home entertainment. This, in plans will vary on a case-by-case basis. addition to the unstoppable trend of increasingly Meanwhile, Intel, which is the only company integrating technology to everyday life, such as currently producing microchips in the U.S. through the emergence of the Internet of Things mainland, announced earlier this month that it (IoT). would invest $3.5 billion on its New Mexico plant Pat Gelisinger, CEO of Intel, reported that the CONTINUED FROM PAGE 1

In fact,

to manufacture what executives said will fuel “a new era of innovation” and advanced computing as demands increase for the tiny microchips used in nearly all modern devices.

Auto Industry on the Lookout

While the local manufacturing industry is reportedly unaffected, the same could not be said for the automotive industry in Puerto Rico.

Ricardo García, president of the United Group of Automobile Importers (GUIA by its Spanish acronym), explained that all international brands are making adjustments in their production lines because ICs are used in multiple car parts, such as GPS devices and even power steering and brakes.

“Car [manufacturing] companies are looking for what vehicles to make, what to stop doing, to make some plants idle. The main issue is how much are they going to stop producing and how much can this affect the industry. So, it is estimated... that this year alone, 1.5 billion to 5 billion cars that would have been manufactured will not be made due to this situation, and this would represent about $60 billion in lost sales,” he told THE WEEKLY JOURNAL. The shortage comes at a time when auto sales have risen considerably year-over-year and demand remains solid. GUIA’s latest report indicated that sales for new units grew by 133.5 percent in the first four months of the year compared to 2020 sales in the same period, when the COVID-pandemic began. In addition, April 2021 was the second-best April recorded by GUIA, while sales rose for seven consecutive months as the industry reopened and residents started receiving millions of dollars in economic aid from the federal government. The impending influx of recovery funds is also expected to boost demand for new cars or have a trickle-down effect on the industry,

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/ Wednesday, May 19, 2021

which employs roughly 30,000 workers directly and indirectly, and contributes over $500 million annually to Puerto Rico’s Gross Domestic Product.

“What I want to stress is that there is an opportunity for that demand to continue; if microchips start to arrive again, we can maintain a fairly stable sale as long as that money continues to arrive in Puerto Rico and is put to use to bring new companies and more investors to Puerto Rico,” García said.

However, he warned that if production continues to be halted or decreased across different brands, auto dealers would not be able to provide if the demand retains its high ground.

Furthermore, some companies are currently unable to meet local demands for a certain brand series or vehicles. “In some cases, they are no longer able to meet the demand for what people want. What I mean to say by that, is that we are already affected; it’s just starting,” he underscored.

The pandemic and the chip shortage have made rental cars scarcer as well, driving up prices dramatically and causing long waits as people start traveling again. The Associated Press reported that rental companies have had trouble getting new cars because auto companies have diverted vehicles away from fleet buyers to more profitable sales to consumers. Higher demand has also sent some rental companies to the used car market to find vehicles.

“Each manufacturer has to see what situations they would have to consider, and one of the first things that come to mind is that ‘if I’m going to sell less, then maybe I have to raise my prices.’ We haven’t done that yet here, but prices have already started to rise in the U.S. because there are fewer products,” García said.

Reshoring Microchip Manufacturing

A September 2020 report by the Semiconductor Industry Association found that the U.S. mainland is responsible for just 12 percent of the worldwide microchip production. Meanwhile, 75 percent of IC manufacturing is concentrated in East Asia, with that number expected to rise due to strong cluster effects. “China alone is projected to host roughly 25 percent of the total global manufacturing

Intel Senior VP for Manufacturing and Operations Keyvan Esfarjani said the company plans to invest $3.5 billion in its New Mexico operations. >AP Photo/Susan Montoya Bryan

Globally, the scarcity of this type of technology is real and at some point, it could affect the availability of a product.

Archer Lebrón of the PRMA

capacity by 2030,” the report indicated, while Taiwan currently accounts for 47 percent of the total microchip manufacturing capacity, placing it at the lead.

Last year, both U.S. and Puerto Rican politicians observed that the mainland’s reliance on China

Archer Lebrón affirmed that manufacturers have contingency plans for this type of scenario. >Archive

for pharmaceutical ingredients was potentially detrimental in light of decreased production during the pandemic. Moreover, as tensions flared between the Asian country and the past Trump administration, a movement emerged to “fire China and hire Puerto Rico,” in which officials are still seeking to reshore American pharmaceuticals to U.S. soil and incentivize the local economy in the process. The present microchip shortage mirrors the situation that led to that developing initiative in that regard.

Manuel Cidre, secretary-designate of the Department of Economic Development and Commerce, said at a recent forum that now the island can look beyond attracting biopharmaceuticals and companies that produce medical devices. “Recently, General Motors in Detroit had to reduce its production capacity due to the lack of microchips, microchips that are made 100 percent in China [sic]. So, reshoring includes elements that have never been seen before, such as microchips... Puerto Rico is positioned as a very viable alternative, even above many states in the nation,” Cidre stated.

Asked about this particularity, Lebrón said that reshoring semiconductor manufacturers will rely on Puerto Rico’s competitiveness to attract that type of industry and “maintain profitable models for this type of multinational.”

“We have lost global competitiveness in that sense. We have maintained leadership in the pharmaceutical and medical devices industry for several reasons, such as our status as an American territory, which allows us access to federal programs and protections. But at the level of global competitiveness, Puerto Rico has been losing that ability. This issue is associated with how Puerto Rico can remain competitive within an innovation economy and within the economic contraction scheme that the country is going through, which is very complicated,” Lebrón commented.

- The Associated Press contributed to this story.

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/ Wednesday, May 19, 2021

Natalie Jaresko of the FOMB >Carlos Rivera Giusti

Busy Days for the FOMB Gov’t budget amended to include operational reserve for PREPA

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Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

t has been another busy week for Puerto Rico’s Financial Oversight and Management Board (FOMB), which has been actively dealing with the central government’s budget and another amended plan of adjustment for the commonwealth’s creditors.

Here is a roundup of the main developments: The FOMB certified a revised budget for the current fiscal year 2021, including appropriating funds required to fund certain Puerto Rico Electric Power Authority (PREPA) operational reserve accounts.

The $1 billion allocation for the reserve fund was announced just as the Puerto Rico Legislature rejected a resolution that would have allocated $750 million for the same reserve fund.

According to the FOMB, the revised budget was developed by the Oversight Board pursuant to Promesa to ensure the necessary levels of working capital to operate PREPA’s electric grid and comply with the agreement between LUMA Energy, PREPA and the Public-Private Partnership Authority, by which LUMA is to assume the operation and management of PREPA’s transmission and distribution system on June 1.

The $750 million operational reserve is not a payment to LUMA Energy but a requirement under the operation and maintenance agreement that ensures PREPA would have sufficient funds to operate and pay vendors and fuel suppliers, the FOMB indicated. A significant portion of the funding will also go towards investments in the grid and reconstruction projects that will eventually

be reimbursed by FEMA. “PREPA’s lack of funds to maintain the system and inability to maintain adequate cash reserves are some of the reasons that exacerbated PREPA’s problems and inability to respond quickly to hurricanes Irma and Maria,” said the Oversight Board’s Executive Director Natalie Jaresko. “The operational reserve is a critical step toward ensuring that never happens again, especially when managed by a professional operator.”

Submits Third Amended Plan of Adjustment

The FOMB also announced that announced that it filed the third amended Plan of Adjustment that reflects agreements reached with creditors after filing the second amended Plan of Adjustment on March 8, 2021.

“The agreements the Oversight Board reached with a significant number of ERS [Employee Retirement System] bondholders and clawback creditors expands the support for the Plan of Adjustment to get Puerto Rico out of bankruptcy,” Jaresko said. “The agreements that are now incorporated in the Plan of Adjustment settle years of litigation that resulted in meaningful concessions on both sides under the guidance of Judge Barbara Houser, Judge Roberta Colton and the mediation team. Consensual agreements are the best path out of bankruptcy for Puerto Rico.”

According to the FOMB, the amended plan reflects the court stipulation with certain holders of $3.2 billion in bonds issued by Puerto Rico’s Employee Retirement System. ERS bondholders will receive their share of $373 million in cash and a portfolio of investments held by ERS that is worth $70 million, resulting in a discount to ERS bonds of more than 80 percent.

The amended plan also reflects a plan support agreement with certain clawback creditors holding claims against the Puerto Rico government for monies historically conditionally appropriated to

certain commonwealth instrumentalities, including the Highways and Transportation Authority (HTA) and the Puerto Rico Convention Center District Authority. Clawback claims will receive a Contingent Value Instrument based on potential outperformance of Puerto Rico’s 5.5 percent Sales and Use Tax relative to projections in the 2020 Certified Fiscal Plan.

The agreement with certain clawback creditors also provides a framework for the restructuring of HTA’s debt so HTA can emerge from bankruptcy and serves as a template for treatment of other asserted clawback claims of similarly situated creditors at the Puerto Rico Infrastructure Financing Authority and the Metropolitan Bus Authority.

The Plan of Adjustment is anticipated to reduce the commonwealth’s debt to “affordable and sustainable” levels. The plan reduces the commonwealth’s debt from $35 billion in outstanding claims by approximately 80 percent to $7.4 billion in future debt and reduces the central government’s total debt service payments (including COFINA senior bonds) by more than 60 percent, from $90.4 billion to $34.1 billion, saving Puerto Rico almost $60 billion in debt service payments, the FOMB added.

Negotiations are continuing with general unsecured creditors and other holders of clawback claims.

FY 2022 Budget of $10.1 Billion

The announcement came as the Oversight Board submitted a “compliant” $10.1 billion General Fund fiscal year (FY) 2022 budget for the commonwealth that allocates 72 percent of funding to the priority areas of education, public safety, health, economic development and pension payments.

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/ Wednesday, May 19, 2021

Evertec Sees Revenues Jump by 14 Percent in Q1 2021

Also helping to drive Puerto Rico’s future workforce

A Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

s digital payments continued to grow during the COVID-19 pandemic and federal stimulus aid spurred consumer spending, Evertec saw its revenues increase by 14 percent during the first quarter

(Q1) of 2021.

Evertec is a leading full-service transaction processing business in Puerto Rico, the Caribbean and Latin America.

Revenue increase in the quarter reflected sales volume growth with a high average ticket, as well as continued growth in its digital solutions in Puerto Rico. Evertec reported it is also benefiting from the shift to digital channels, as the higher volume of online users continues to drive growth over prior year as well as an increase in service volumes.

“We achieved strong results in the first quarter, driven by consumer demand as we lapped the one-year anniversary of the pandemic, as well as benefiting from the impact of new business contracts in Latin America. Given the Q1 results, the passage of the new [federal] stimulus bill, as well as our execution on our share repurchase program, we are raising our expectations for 2021,” Morgan M. Schuessler, president and CEO of Evertec, during the earnings conference call.

Evertec reported total revenue was $140 million for the first quarter, an increase of 14 percent compared to 2020. Adjusted EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization] was $69 million, an increase of 22 percent as compared to the prior year. And adjusted earnings per share was $0.62, an increase of 35 percent.

“We generated significant operating cash flow during the quarter of $35 million, and we returned approximately $80 million to our shareholders through dividends and execution of share repurchases. Additionally, our liquidity remains strong at $273 million as of March 31… [For Puerto Rico,] we continue to see significant transaction revenue growth as a result of the federal stimulus programs and increased consumer demand,” Schuessler said.

For example, he noted that merchant revenue

Evertec’s Mac Schuessler >Courtesy

growth in January and February was in the low science, technology, engineering and mathematics double digits and then surged in March to over (STEM) disciplines.

46 percent, as “we lapped the COVID-19 lockdown Since the inception of its Scholarship Program last year, for a total quarterly revenue growth of in 2015, Evertec has awarded 529 scholarships 23 percent. We also continue to for a total investment of more benefit from growth in our digital than $685,000 in six years. payment channels related to the During 2020, Evertec awarded ATH network. Our ATH Movil and 160 scholarships to university ATH Movil Business delivered 160 and post-graduate students with percent revenue growth,” he said. an investment of over $185,000.

The company’s The adoption rate of QR Aware of the importance of merchant revenue codes by both consumers and encouraging more women growth in January businesses has continued to in STEM professions, and in and February was in increase, Schuessler pointed partnership with women leaders the low double digits, out, referring to the twoin the technology and science and then surged in dimensional version of the ecosystem, Evertec received a 50 March to over 46 barcode, typically made up of percent increase in applications percent. black and white pixel patterns, by females, resulting in greater which are now ubiquitous in diversity and inclusion among the many eating establishments. “We program’s awardees. have expanded the contactless “The pandemic demonstrated functionality to almost 4,000 or approximately the importance of the use of technology and 13 percent of our merchants and have added QR science in the global economy and in our society. code payment functionality to pay at the table Both have played a crucial role in identifying, restaurants,” he added. addressing and finding a solution to the challenges In other news, Evertec also announced the brought about by the pandemic… We reiterate our launch of the seventh edition of its Scholarship commitment to students who concentrate their Program aimed at university students from Puerto studies in STEM since they will be an essential part Rico and Latin America who are focused on the of our future workforce,” Schuessler said.

In fact,

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/ Wednesday, May 19, 2021

Puerto Rican Insurance Co-Op Beats Projections, Aims High

New president outlines CSM’s 2020 gains and strategic growth plan

T Giovanna Garofalo

ggarofalo@wjournalpr.com

@giopgarofalo

he new president of the Cooperativa de Seguros Múltiples (CSM), Luis Cordero, affirmed that the entity has developed a short, medium and long-term growth strategy to add more value to its policyholders, employees, co-op movement and partners.

“One of the main strategies of this plan is diversification, having a growth of diversification in terms of the market of other lines. We are a company where 80 percent of our portfolio distribution has historically been personal lines insurance, which includes auto policies, personal residences, liability and personal public liability; and 20 percent in the area of other lines. Currently, our diversification is increasing in such a way that it is complying with the strategies of our plan,” Cordero told THE WEEKLY JOURNAL. According to the insurance expert, this plan was conceived in 2018 and covers the cooperative’s goals until 2023.

Despite the toll of the COVID-19 pandemic on commercial activities, Cordero revealed that CSM has managed to surpass the expectations outlined in its strategic plan so far. In fact, 2020 was a record year for the Puerto Rican co-op sector. Among the milestones that CSM marked last year was a capital increase of approximately $176 million compared to $142 million in 2019, representing an increase of $34 million, or 23.9 percent.

“In addition, it was the first time that [CSM] exceeded $300 million in written premiums. It’s been four months into the new year now, but we are still celebrating. Also, we reached a goal of $308 million at 100 percent,” he said, adding that they achieved an 89 percent business retention rate.

Innovative Practices

The new president said that the “reality of today’s market” implies that the insurance industry needs to boost its technological infrastructure to facilitate actions for both industry holders and clients. For this reason, last year CSM became the first insurance company in Puerto Rico and Latin America to integrate Alexa, Amazon’s virtual reality

Luis Cordero has 42 years of experience in the insurance industry. >Courtesy

easiest to do business with. We are extremely AI technology, into its customer service base. grateful for the support provided by our human “Through this, the insured can obtain multiple information and can take different types of actions, resource and the trust that the policyholders have placed in us. They are our such as establishing a claim, north and our commitment is to [more details] about their policies, meet your changing needs,” he the vehicles that are insured, affirmed. the expiration date of these, and receiving roadside assistance 2021 Goals services anytime they need it. It is Among the Cordero —who has worked a direct innovation in which there milestones that CSM in the insurance industry for is no middleman in handling marked last year was 42 years and most recently customer service,” he explained. a capital increase of served as CSM’s president While CSM initially projected to approximately $176 of Communications, Sales & obtain 1,000 interactions through million compared Marketing— affirmed that the Alexa in the first six months of its to $142 million in co-op plans to raise its written incorporation, they achieved over 2019, representing premiums to $323 million this 3,000 engagements. an increase of $34 year. “We already have the Moreover, the entity has an million, or 23.9 evaluations of the first quarter app where clients can apply for percent. of 2021 and the trend is that we policies, establish direct claims, must be exceeding it,” he said, issue payments and request adding that they also aim to career service assistance. CSM surpass $200 million in capital said it continues to be the only gains within one year or two. insurer on the island to offer “Express Service” “We are confident that we will achieve our with personalized inspection at the place of the sales goal for 2021. At the end of the first quarter, car accident or where and when the insured or written premiums exceeded $80 million, $5 claimant requests it, with 24/7 service. [million] more compared to the previous year; “We will continue to position [CSM] as the results that reaffirm that we are on the right track first insurer in the consumer’s mind, including and we are doing a great job,” Cordero asserted. providing the best service in the industry, the widest variety of products, and the one that is the

In fact,

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>Brandon Cruz González

/ Wednesday, May 19, 2021

Triple-S Reports Double-digit Revenue Growth in Q1 2021

Developing centers for chronic health conditions

T Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

riple-S Management Corp., a leading healthcare services company in Puerto Rico, reported its first quarter (Q1) 2021 results of “double-digit revenue growth,” led by a big increase in Medicaid members.

“Our performance was driven by strong Medicaid results coupled with another quarter of top and bottom line growth at Life and P&C [Property & Casualty]. And we continue to make steady progress scaling our chronic condition management programs, a key part of our value-based integrated healthcare strategy with a particular focus this year on patient participation levels,” said Roberto García Rodríguez, Triple-S president and CEO during the earnings conference call.

“Total operating revenue for the quarter increased 15 percent from the prior year period to $1.03 billion as we benefited from higher Medicaid membership and average premium rates,” he added. “As expected, in Q1 utilization of services rose from the unusually low levels we saw in the same period last year when the pandemic-related locked down depressed utilization significantly.

In the first quarter of 2021, members accessed more healthcare services that they had previously deferred because of the pandemic. Despite this increase in utilization, we remain confident in our outlook for the full year.”

As García noted, Medicare Advantage membership was relatively flat during the open enrollment period, while market shares remained steady among all

players. “Looking forward, we’re expecting modest bright, and that’s a big positive for Triple-S.” membership gains by year-end. Our Medicaid In terms of their plans for 2021, García segment has continued its healthy top line growth. highlighted that they are developing centers We added another 14,750 members in the first to address the principle chronic conditions on quarter and continued to benefit from the premium the island, led by diabetes, which makes up rate increases we received last year. We now have approximately 30 percent of their Medicare nearly 437,000 members Advantage population. reinforcing our position The new centers, expected as the dominant to being serving Triple-S Medicaid provider on the members in the second island,” he said. half of 2021, would also Two market cover hypertension and developments in chronic heart failure, November of 2020 kidney disease and caused their growth to respiratory illnesses. accelerate, according to “For full year 2021, Juan José Román, the we are reaffirming company’s executive our previous guidance VP and CFO. “First, the based on the current government assigned economic environment, the remaining members the continued impact of a Medicaid carrier of COVID-19, and the that was leaving the -Roberto García Rodríguez, president and CEO investment in and initial program. And the benefits from our strategic assignment resulted initiatives. We still expect in an additional 80,000 consolidated operating member months for revenue to be between us. In addition, in November 2020, the number $3.98 billion and $4.02 billion, which includes of people eligible for Medicaid increased by managed care premiums earned net between $3.58 approximately 63,000,” he said. billion and $3.62 billion.

“Our consolidated claims incurred ratio is still expected to be between 83 percent and 84 Positive Outlook for the Rest of the Year percent, while the Managed Care MLR [medical Taking a broader view of Puerto Rico, García loss ratio] is expected to be between 86 percent expressed optimism as a third of the island’s 3.3 and 87 percent. This reflects expected higher million population has received at least one vaccine utilization during 2021 elimination of the HIP dose, “suggesting we’re on the back end of the [health insurance provider] fee and increased pandemic. In addition, with a promising government membership in the Medicaid program, which has debt-restructuring proposal on the table, and then higher MLR than the commercial and Medicare expected rapid flow of federal and reconstruction businesses,” said the Triple-S chief. funds, the outlook for Puerto Rico’s economy looks

With a promising government debt-restructuring proposal on the table, and then expected rapid flow of federal and reconstruction funds, the outlook for Puerto Rico’s economy looks bright, and that’s a big positive for Triple-S.

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/ Wednesday, May 19, 2021

These silicone bags can be reused about 3,000 times and are microwave-proof. >Courtesy of VITAL

VITAL Aims to ‘Mainstream Green’ Local company promotes zero-waste lifestyle with sustainable products

W Giovanna Garofalo

ggarofalo@wjournalpr.com

@giopgarofalo

ith more customers aware of the effects of climate change and a growing consciousness to adopt sustainable lifestyles, VITAL is ready to cater to the Puerto Rican market and beyond with a variety of zerowaste essentials.

VITAL CEO and founder Laura Napoli had the idea to develop a sustainable brand after the onslaught of Hurricane Maria in 2017, and while earning her MBA in Barcelona, Spain, where she noticed that residents had more eco-friendly options instead of the single-use plastics that are commonplace in her native Puerto Rico. Noticing an opportunity to develop that market on the island, she launched VITAL last year, started selling last August, and has since reported exponential growth throughout her business journey.

In a one-on-one with THE WEEKLY JOURNAL, Napoli explained that the company’s goal is to lead its clients toward a path of eco-consciousness, or as she described it, to “mainstream green.” The company offers a range of products, from skincare and hygienic items, to kitchen appliances and other goods.

Some of the products sold on its website include bamboo toothbrushes, zero-waste toothpaste, “thieves oil” soap—which lasts for months— reusable cups, face masks with a hole to insert a reusable straw, and silicone bags, which Napoli said may be reused up to 3,000 times, in stark

contrast to single-use items. “Something that we we took full advantage of it,” she commented on really try to have as part of our criteria for our the pre18 program. products is practicality. We are constantly looking In addition to the company’s brick-and-mortar to offer products that not only help you live more presence in SuperMax stores, Napoli revealed sustainably, but also help you live more easily in that there are other projects in the pipeline your daily life,” she asserted. with entities that have “much more of an online As for her clientele demographics, Napoli presence” in Puerto Rico. “So, we are also seeking reported that roughly 15 percent are male, and the a lot of these corporate partnerships and different rest are split between women in their 20s and 30s, retail partnerships to expand as much as we can,” and women in their 60s, showcasing a potential she stated. to reach broad audiences. “All we really want is to give an A Promising Horizon entry point into that sustainable Speaking about her plans lifestyle. We know that it has in the near future, Napoli said been difficult to mainstream that she intends to boost local green. If you’re able to find just production. To date, about The company one product that starts your two-thirds of VITAL products has registered journey, then we’re happy,” the are manufactured abroad while a 260 percent CEO affirmed. one-third are produced locally, monthly sales including their face masks and growth in the past Banner Sales Performance soaps. “We’re trying to kind of flip eight months.

According to Napoli, VITAL that proportion and have twohas registered an average of thirds of products manufactured in Puerto Rico, and then 260 percent month-on-month supplementing with overseas,” sales growth for the past eight she explained. months, and they expect to continue growing, Moreover, Napoli said that she would like thanks to partnerships with local commercial to expand her business to other destinations. establishments.

Currently, VITAL ship products locally and to the As previously reported by THE WEEKLY U.S. mainland, but she sees the potential to target JOURNAL, the company participated in the third specific markets and also export her products cohort of parallel18’s pre-accelerator program, internationally. known as pre18. During the Demo Event held earlier this year, Napoli outlined the company’s “We have our eyes wide open and we know that mission and offers before a number of business this is not a market that stays only in Puerto Rico.

We have big ambitions, we have global ambitions. leaders. Thanks to that presentation, she was We desperately want to succeed in our mission introduced to the president of the SuperMax to mainstream green, so that takes us likely to supermarket chain, José Revuelta, and Supermax the U.S., especially in major Latino markets, now sells VITAL’s products in the De Diego and such as Miami and Los Angeles, which have Plaza Guaynabo store locations, as well as in The been historically underserved with sustainable House establishments inside them. “We are in the process of expanding to another store next month. projects… That is certainly one way that we’re It has been absolutely critical to our growth, and going to expand,” she affirmed.

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< The Weekly Journal > Wednesday, May 19, 2021

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/ Wednesday, May 19, 2021

Linda J. Bilmes Harvard Kennedy School

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Putting a Dollar Value on Nature Will Give Governments and Businesses More Reasons to Protect it

resident Joe Biden calls climate change “the existential crisis of our time” and has taken steps to curb it that match those words. They include returning the U.S. to the Paris Agreement; creating a new climate Cabinet position; introducing a plan to slash fossil fuel subsidies; and announcing ambitious goals to cut U.S. greenhouse gas emissions.

But climate change is not the only global environmental threat that demands attention. Scientists widely agree that loss of wildlife and the natural environment is an equally urgent crisis. Some argue that biodiversity loss threatens to become Earth’s sixth mass extinction. But unlike efforts to fight climate change – which center on clear, measurable goals to reduce greenhouse gas emissions – there is no globally accepted metric for saving biodiversity.

As an expert on budgeting and public finance, I know that governments and private businesses alike pay much more attention to resources when they have a well-defined price tag. I believe that overhauling society’s concept of wealth to include “natural capital” – the value nature provides to humans – is a critical step for slowing and reversing the loss of precious ecosytems.

What is natural capital?

Natural capital can be defined as the world’s stocks of natural assets – soil, air, water, grasslands, forests, wetlands, rocks and minerals – and all of its living things, from mammals and fish to plants and microbes. Conservation experts estimate that these resources contribute more than $125 trillion to the global economy every year.

Humans depend on nature’s contributions for survival. For example, forests absorb carbon and

filter the water we drink. Wetlands and coral reefs mitigate flooding.

Bees and other insects pollinate crops, enabling us to grow food.

But human societies don’t formally recognize the economic value of these services. This oversight encourages people to recklessly deplete the natural environment.

A recent review of the economics of biodiversity, commissioned by the U.K. government and led by Cambridge University economist Sir Parth Dasgupta, warns that human prosperity is growing at a “devastating cost to nature” and estimates that it would take 1.6 Earths to maintain the world’s current living standards. The report calls for the world to treat nature like an asset to be reported in financial statements and national accounts.

The Capitals Coalition, a global consortium of 380 initiatives and businesses, is trying to “change the math.” The organization seeks to persuade at least half of the world’s businesses, financial institutions and governments to incorporate natural capital into their decisionmaking by 2030.

Valuing ecosystems

Current accounting methods used by corporations and governments largely ignore what ecosystems and their services contribute to the economy and to human social well-being, jobs and livelihoods. As a consequence, modern societies spend far more on investments that deplete or exploit natural assets than they do to preserve them.

Under the current model, shortterm economic gains typically win out against longer-term ecological benefits. For example, failing to maintain forests can spark wildfires.

Constructing homes on fragile coastal wetlands can erode soil and reduce fish stocks, destroying local communities.

A recent study by the Paulson

Institute, a research institute founded by former U.S. Treasury Secretary Henry Paulson, estimated that global investments that degrade nature exceed conservation efforts by $600 billion to $824 billion per year.

Natural capital accounting would require businesses and governments to calculate how human activity affects nature, much as they assess depreciation of buildings or machinery. Analyzed in this way, nature is a financial asset, and damage to it becomes a liability.

This approach creates incentives to conserve natural resources and restore others that have been degraded or depleted.

Global recognition of this issue is growing. In March 2021 the United Nations updated a statistical framework for standardizing ecosystem accounting, which was first published in 2012. These guidelines help countries track changes in ecosystems and their services and provide leaders with a baseline with which to compare their stocks and flows when making policy decisions.

Some 90 countries have adopted this System of Environmental Economic Accounting and produced baseline “national capital accounts.”

They include European Union members, Australia, Canada, the U.K. and more than 40 developing countries. The U.S. is planning to implement this approach but has not done so yet.

Assessing nature’s value

Placing values on natural assets is really no different from government assessments of the benefits of new roads, bridges and other infrastructure. People intuitively understand that natural resources are precious. The COVID-19 pandemic has made clear how closely human health is intertwined with the health of the planet.

In response to the biodiversity crisis, Biden has aligned the U.S.

with the global 30x30 campaign, a plan to protect at least 30% of the planet’s land and oceans by 2030. Multiple scientific studies have shown that achieving this goal would conserve species, store carbon, prevent future pandemics and boost economic growth.

The year 2021 marks the start of the U.N. Decade on Ecosystem Restoration, which aims to prevent, halt and reverse the degradation of ecosystems worldwide. Today, according to a recent study, less than 3% of the world’s land remains ecologically intact with healthy wildlife populations and undisturbed habitat.

The U.S has lost decades of potential progress since Congress suspended fledgling efforts by the Bureau of Economic Analysis to develop environmental accounting methods in 1995. Researchers at the U.S. Geological Survey and other federal agencies are now urging the U.S. to adopt national capital accounts using the U.N. framework.

In contrast, the U.K. created public environmental accounts and set up a Natural Capital Committee in 2012, led by its finance ministry, to help corporations develop natural capital accounts. Today, the U.K. maintains these accounts, which capture data on the size, condition, quantity and value of habitats and ecosystem services.

Biden could empower the Treasury Department to spearhead a similar initiative.

Adopting metrics to measure and track the benefits people receive from wildlife and ecosystems would clarify how human activities affect nature and show how much investment is needed to reverse humanity’s current destructive trajectory. Conservation advocates will be much better positioned to protect our planet’s resources with a strong balance sheet to back it up.

- This article is republished from The Conversation under a Creative Commons license.

/ Wednesday, May 19, 2021

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Scientists Offer Look Into Life as Caribbean Volcano Erupted

On the eastern Caribbean island of St. Vincent

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The Associated Press

he three scientists credited with helping save lives ahead of a recent explosive volcano eruption in the eastern Caribbean island of St. Vincent are known to locals simply as Richie, Rod and TC. The team huddled indoors for weeks on little sleep to study and alert the government about activity at La Soufrière, whose eruptions last month displaced nearly 20% of the population and prompted the United Nations to seek $29 million to help the island recover from the devastation.

More than 16,000 people fled the ash-covered hills and homes in northern St. Vincent while the scientists stayed behind. They filed two reports a day and worked in shifts to keep a constant eye on the temperamental volcano as ash kept falling from the sky, blanketing the island’s lush green environment in monotone gray.

“You get kind of used to having ash in your food, in your hair, in your nose. You sleep in a fine layer of ash. It gets very uncomfortable,” said Richard Robertson, a geologist and volcanologist with the University of the West Indies’ Seismic Research Center who oversaw the team in St. Vincent.

The observatory, built about 6 miles from La Soufrière, was located close enough to the volcano to give scientists a full view of it but far enough so that they remained out of danger. It is divided in two: the air-conditioned office where all data including recordings from a seismometer were analyzed and compiled and a room also sealed off from ash that lacked air conditioning and served as the bedroom for all three.

Like many of those affected by the eruptions, the scientists ate a lot of dried and canned goods, although people would drop off donations including fresh fruit, homemade smoothies and even a lasagna from the wife of Prime Minister Ralph Gonsalves, while local residents came by with buckets of water when the team lacked running water for about a week.

“There were two days in which we were a bit smelly,” Robertson said with a laugh. “It was an intense period. We were focused on what we were doing, so we didn’t notice as much.”

A minor eruption in December allowed scientists to set up monitoring stations that helped them collect enough data to recommend evacuations less than a day before the April 9 explosive eruption that

Plumes of ash rise from the La Soufriere volcano as it erupts on the eastern Caribbean island of St. Vincent, as seen from Chateaubelair, Friday, April 9, 2021. >AP Photo/Orvil Samuel

shot a plume of ash 32,000 feet (10 kilometers) into the sky as lightning crackled through it.

No deaths or injuries were reported as eruptions continued on St. Vincent and the

Grenadines, an island chain of more than 100,000 people, thanks partly to the life-saving evacuation order based on data collected by Roderick Stewart, a volcanologist and seismologist who goes by “Rock Star” since he shares names with British singer Rod Stewart, although not his vocal ability.

He said recommending the government evacuate the area was an easy decision given the rapid changes in seismic activity.

“I’ve seen wrong warnings and hesitancy,” Stewart said. “In this situation, it was actually the other way around... We came to this sort of feeling that we would not be happy going into the night if there wasn’t an evacuation, and that things could change quickly.”

On the afternoon of April 8, the government ordered all those living close to the volcano to evacuate. Thousands of people grabbed whatever belongings they could fit into suitcases, backpacks or plastic bags and headed to government shelters or the homes of friends or family.

Some people, however, refused to leave their homes, worrying Robertson, Stewart and their colleague, Thomas Christopher. They knew people could die for insisting on staying or returning to their homes like they did in nearby Montserrat, where the Soufrière Hills volcano has erupted continuously since 1995, destroying the capital of Plymouth and killing at least 19 people in 1997.

Both Robertson and Stewart said they force themselves to not think about what impact their decisions might have on people.

“You try to focus on what the volcano is doing and less on what the implication is for people,” Robertson said. “If you don’t do that, you’re not going to be doing as good a job as you could.”

A native Vincentian, Robertson recalled the previous eruption of La Soufrière in 1979. He was around 18 years old and helped evacuate people, managed a shelter for two weeks and even provided entertainment to those displaced, playing tenor pan in a steel band at shelters. At the time, he was considering studying physical planning and geography, but the eruption led him to become a geologist and volcanologist.

The team he led during the most recent eruption has since disbanded and gone back to their home base, but not before the scientists praised the director of the seismic research center, Erouscilla Joseph, in a blog: “No man is an island, so it makes sense that our director, Dr. Joseph, is a woman adept at rallying the troops.”

The scientists are still in touch online as they continue to monitor La Soufriere.

“We are currently discussing, ‘Is the eruption finished?’” said Stewart, adding that while scientists expect it to go quiet in upcoming months, it’s not guaranteed. “Volcanoes in their nature are unpredictable.”

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>Courtesy

/ Wednesday, May 19, 2021

New Letras Boricuas Fellowships for Puerto Rican Writers Grants aimed at supporting authors across genres

T

The Weekly Journal Staff

he Andrew W. Mellon Foundation and the Flamboyán Foundation’s Arts Fund announced the establishment of the Letras Boricuas Fellowship—a fellowship aimed at supporting emerging and established Puerto Rican writers of poetry, fiction, creative nonfiction and children’s literature, both in Puerto Rico and from across the diaspora in the United States.

Created to help nurture the continuation of Puerto Rico’s rich and often under-resourced literary lineage, the fellowship will provide 30 writers with an unrestricted grant of $25,000 each.

The first cohort of 15 writers will be announced in November 2021. Fellows from both cohorts will be invited to a gathering in San Juan—tentatively scheduled for Spring 2023—to meet, share their work and discuss their process and fellowship experiences.

Home to a rich literary tradition, Puerto Rico has produced some of today’s most celebrated writers, yet there are few dedicated platforms for the elevation and amplification of Puerto Rican literary voices, including funding to support artists in the field. In addition to providing unrestricted funds to support writers, the Letras Boricuas Fellowship will identify and connect writers from diverse backgrounds and identities who embody the vastness, diversity and complexity of Puerto Rican experiences.

“The literature of Puerto Rico—poems, memoirs, broaden and deepen the range of how and where the stories of our histories and communities are fiction, nonfiction and creatively mixed genres told. Since 2018, the foundation has committed is an open window into Puerto Rico’s rich and more than $11 million as part of a multi-year complex cultural lineages, on the island and initiative to sustain and enrich in the diaspora,” said Mellon Puerto Rico’s vibrant cultural and Foundation President Elizabeth humanities ecosystem and ensure Alexander. that the arts and humanities “At Flamboyán Foundation, will continue to flourish there, we can’t think of a better way The two especially in the wake of ongoing to honor the rich heritage foundations natural disasters and economic and diversity of Puerto Rican worked together difficulties. literature in the archipelago in coordinating an For the past two years, the and the diaspora than creating immediate response Flamboyán Foundation has a fellowship that lets writers to the COVID-19 worked to preserve, amplify and do what they know how to do pandemic by strengthen the arts in Puerto Rico. best. Our Flamboyán Arts Fund providing $1 million In response to the devastating recognizes the existing lack in emergency effects of hurricanes Irma and of support for this particular relief to 89 art sector and the absence of Maria in 2017, the foundation organizations and has committed over $10 million funding opportunities for them 450 individual and has provided critical support in Puerto Rico and abroad,” artists in Puerto to 541 artists and 106 arts said Carlos Rodríguez Silvestre, Rico. organizations including museums, executive director of Flamboyán theaters, arts education programs Foundation Puerto Rico. “This is a and concert venues to maintain first of its kind fellowship on the the integrity of their programming, island and we thank the Mellon increase their visibility, and sustain their impact.

Foundation for their commitment to our writers The two foundations also worked together and our literary tradition.” in coordinating an immediate response to the Lin-Manuel Miranda of “Hamilton” fame, who is Puerto Rican, was among those who welcomed the COVID-19 pandemic by providing $1 million in news. “[This is] an important means of supporting emergency relief to 89 art organizations and 450 Puerto Rican artists in their journey to tell more individual artists in Puerto Rico. stories. This collaboration to amplify the work and Writers interested in applying can visit www. voices of these creators, both in Puerto Rico and letrasboricuas.org for more information and to across the U.S. diaspora, will further enrich and submit applications in Spanish or English. The enhance the literary experience for all of us,” he deadline for applications is June 20. said.

To learn more about the Letras Boricuas The Andrew W. Mellon Foundation’s work in Fellowship and to submit an application, visit www. letrasboricuas.org.

Puerto Rico is part of its ongoing commitment to

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/ Wednesday, May 19, 2021

The Rise of the Sneaker An important fashion staple for every occasion

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The Weekly Journal Staff

neakers have become an essential part of every person’s wardrobe, whether it’s a pair of Nike Air Force 1s or Stan Smiths by Adidas. Once worn purely for sports activities, the sneaker now features at every occasion: nights out, weddings have become a staple piece and even black-tie events. in many men’s wardrobes, with Initially, we have tennis to their iconic red and green stripe thank for the popularization of placed diagonally across the Sotheby’s the sneaker. Players began to white surface, which incidentally announced last wear comfortable athletic shoes have become very popular in the month that Kanye for their matches, and the trend fashion black market with many West’s so-called soon seethed into other sports fakes copying the simple yet “Grammy Worn” such as basketball, athletics and effective design. The same goes Nike Air Yeezy 1 football during the 20th century. for Balenciaga trainers, a celebrity fetched $1.8 million Sneakers are a crucial part of favorite that has also been ripped in a private sale. any sports uniform, with brands off by many companies for a The sale marks the collaborating with star players much cheaper price. highest publicly to drive sales and promote their A variety of sneakers produced recorded price for latest product. by brands such as Converse, a sneaker sale and Perhaps the most iconic Adidas and Nike have made the the first pair of collaboration between a sports transition from casual to formal, sneakers to top $1 superstar and sneaker design is with Converse being a favorite million greatest-of-all-time basketball to pair with a suit, and Nike’s Air player Michael Jordan and mega Jordan’s now representing slick sports retailer Nike. In 1984, Nike style in the office.

With that said, designed the Air Jordan sneaker sneakers are worn day in and day out by the for Chicago Bulls’ number 23 and released the population, whether it’s popping out to the design to the public the following year. The highshops or for what they were once top sneakers, originally meant for the court, have made for: exercising. Sneakers gained huge popularity since their release and can now be purchased for are no longer exclusively worn for basketball. specific sports, from Forbes estimated Michael Jordan’s net worth at $1.6 billion, with a huge percentage of his earnings powerlifting in the gym, to rock coming from his collaboration with Nike. climbing Sneakers have become the sole focus of many or brands in the past decade or so, with fashion houses such as Alexander McQueen, Balenciaga and Gucci producing fashionable sneakers that emit a cool and casual style. Retailing at more than $400, McQueen’s classic white sneakers are made with excellent materials and care, creating a long-lasting investment piece that can be worn on any occasion. Luxury giant Gucci’s sneakers

In fact,

CHI Footwear >Courtesy

competing in a triathlon. While it is clear that sneakers are a necessity for the sporting activity of choice, they have almost become a collector’s item, with the average designer sneaker retailing at more than $500 a pair.

Believe it or not: A pair of prototype Nikes worn

by Kanye West during his performances of “Hey Mama” and “Stronger” at the Grammy Awards in 2008 has shattered the record for a pair of sneakers ever sold.

Sotheby’s announced last month that West’s so-called “Grammy Worn” Nike Air Yeezy 1 fetched $1.8 million in a private sale, reported The Associated Press. It was acquired by RARES, a sneaker investment marketplace. The sale marks the highest publicly recorded price for a sneaker sale and the first pair of sneakers to top $1 million.

Whether it’s a pair of Jordan’s, McQueen’s or Stan Smiths, the sneaker is an essential part of the modern-day wardrobe and can be worn anywhere, anytime, no matter what the occasion.

The limited edition Nike AIR MAX 90 in a black, orange and silver color-way >Courtesy of Afterpay

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