The Weekly Journal - Wednesday, October 13, 2021

Puerto Rico and the Caribbean

Wednesday, October 13-19, 2021 - // no. 129

www.theweeklyjournal.com

Foreign Financial Institutions in Puerto Rico P6 FOMB at Loggerheads With Legislature P7

>Courtesy of BD Co.

Congress Demands Info from LUMA P9

Manufacturing in the 21st Century: Technology is Key Inteldot Marks 10 Years of Partnering With Global Life Science Companies

M

>Courtesy

Rosario Fajardo

Luquillo Jazz Club to Open P15

rfajardo@wjournalpr.com

@RosarioWJournal

anufacturing continues to be a key component of the Puerto Rico, but global trends in the 21st century mean that the industry is already changing with a focus on technology, increasingly capital intensive and generating fewer

jobs.

This was the assessment of a report by Estudios Técnicos in its monthly publication, “Perspectivas.” As

explained by José J. Villamil, the firm’s founder and principal executive officer, traditional manufacturing will not cease, but the industry will continue to undergo “profound transformations in technology.”

Among the global trends that he outlined include: • Production will increasingly be of intangibles, blurring the line between manufacturing and advanced services.

• New manufacturing companies are emerging GO TO PAGE 4

The Weekly Journal > Wednesday, October 13, 2021 > 2

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/ Wednesday, October 13, 2021

a week in review Puerto Rico to Host Show’s First New Year’s Eve Countdown in Spanish

>Archive

>Courtesy of T-Mobile

A Spanish-language countdown will be included for the first time in the “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest” show this year. The segment will be broadcast from Puerto Rico, where thousands are expected to gather at the Convention Center in San Juan.

The annual ABC special is broadcast from Times Square in New York City. The island’s government will invest $3.6 million in federal funds for the endeavor.

Puerto Rico to Install Free Internet in All Public Housing Puerto Rico’s government announced that it plans to offer free, highspeed internet to the more than 300 public housing projects across the island. Public Housing Administrator Alejandro Salgado said nearly all units will have internet access by the end of next year as part of the $11.8 million project. The service recently debuted in some of the island’s 78 municipalities, including Aguada, Arecibo and Isabela. Salgado said an internet connection has become an urgent need, especially for schoolchildren.

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Medalla Light Expands Exports to Two More States The Puerto Rican beer brand, Medalla Light continues to make its way into the U.S. market, adding the states of New Hampshire and Tennessee to its territories. For Marketing Officer of Cervecera de Puerto Rico, Jorge Bracero, the success of the expansion is due to the reception of Puerto Ricans residing in the eastern U.S. Now, Puerto Ricans in the diaspora will be able to get the beer in 13 jurisdictions: New Hampshire and Tennessee join Florida, Connecticut, Massachusetts, New Jersey, Pennsylvania, Virginia, Maryland, Washington, D.C., New York, Rhode Island and Wisconsin.

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Customer Service: 787-622-7480

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CONTINUED FROM PAGE 1 around technologies, as is the case of Tesla and many others, and this trend will not change. This is important to recognize because these new companies do not respond to market demand but create such demand.

• Companies will be characterized by high mobility and can be located practically anywhere, which has allowed a greater dispersion of industrial production and has generated a movement in the U.S. for North American multinational companies to return their production processes to the country.

• The organization of production is fragmented and requires integration of processes carried out in companies located in different jurisdictions.

Horizontal integration (“outsourcing” or subcontracting) replaces the vertical integration characteristic of traditional manufacturing.

• The very short useful life of products and technologies requires companies to have the flexibility to act with agility in the face of changes in technology, in the economic and geopolitical context and in consumer preferences.

“One priority must be to ensure that global manufacturing supply chains on the island are located in Puerto Rico to the extent possible and that they are predominantly made up of local companies. From promoting factories, we must move to promoting the creation of integrated production systems, the so-called ‘clusters,’ a concept that’s been with us since 2000…

“It is much more difficult to move an integrated production system than to move a production line, an important condition in a context in which capital moves with great ease. By encouraging internal linkages, the economic impact of global manufacturing would be much greater than it is today,” Villamil said.

An educated and well-trained workforce is also important for success. >Inter News Service

The implementation of technology has to be accompanied by the development of professionals who can maximize the benefit of investment in the industry.

- Reggy Agosto, founder and CEO of Inteldot

>Courtesy of Congar

A Success Story

Highlighting the importance of technology, local company Inteldot has reached a milestone: 10 years of collaborating with a number of global life-sciences company. Inteldot, a local system integration and outsourcing firm, has helped with the island’s digital transformation to increase efficiency, reduce costs and improve lead times that are key to attract new investments. Among the companies that Inteldot works with are Amgen, Johnson and Johnson, Takeda, BMS and Novartis.

Inteldot, founded in 2011, counts on a local staff that has experience in design, development, testing and validation solutions. They have been completing implementations for more than a decade for plant utilities, building management systems, bulk manufacturing facilities and vial

& syringe filling processes for local and global companies.

“In Puerto Rico, for the past decades, the elimination of tax incentives has forced the life sciences sector to invest in technology to maintain its competitive edge over other jurisdictions, where energy and labor costs are lower. Therefore, we are aimed at strengthening the local ecosystem to allow the implementation, operation and maintenance of these technologies so that our clients can focus on shipping quality products out of their warehouses,” said Reggy Agosto, founder and CEO of Inteldot.

By implementing Manufacturing Execution Systems (MES) and other enterprise systems, Inteldot has met the business needs of global leading companies, having a direct influence in the manufacturing process and quality assurance for three of the top-20 selling medications in the world, he indicated.

Some of the main challenges that companies have during technology implementation are data integrity, limited business resources as well as getting and keeping quality groups and management’s attention and commitment. “Our focus with the services and solutions that we create is not only to address those challenges, moreover they have to be agile, scalable and flexible enough to transform and meet the everchanging business needs,” Agosto said.

As per the company, Inteldot is the first service provider from Puerto Rico to provide MES solutions for commercial CAR T-cell therapy manufacturing processes and supports client operations in California, New Jersey, Germany,

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COVID-19 pandemic has generated, manufacturing Switzerland and Japan. With more than 40 staff is one of the sectors that has managed to keep its members, they are the local service provider with activity afloat on the island and is one of those that the largest number of employees assigned to MES has had the least impact. implementations.

For example, in July, the PMI was at 55.8, with To accelerate the digital transformation most of the sub-indexes registering increases, as of the life science industry, Inteldot will be reported by the Puerto Rico Statistics Institute. sponsoring an educative forum in November. “The In the case of New Orders and implementation of technology Employment, both rose to 53.8 has to be accompanied by the and 55.8, respectively, after development of professionals having been below the threshold who can maximize the benefit in the previous month. Delivery of investment in the industry. to Suppliers reached 71.2, while Undoubtedly, the creation of Factors company Inventories remained forums that allow the discussion affected by the at 50. and knowledge development pandemic in the However, the PMI decreased to paves the way for our island manufacturing 53.8 in August. The Employment to be the preferred center at sector were: and Own Inventories sub-indexes international level for talent a reduction in decreased with respect to the search,” he said. suppliers’ deliveries previous month. On a positive (21.2%), a reduction note, the Production, New Orders in demand (9.4%), Good News, Bad News and Suppliers Deliveries suba reduction in staff There has been some indexes were above the threshold (18.8%), a reduction mixed news regarding the level of 50. in inventory (0%), manufacturing sector in the past According to the report by and others (18.8%). month. Manufacturing in Puerto the Statistics Institute, factors - Puerto Rico Statistics Rico has been hovering around affected by the pandemic in the Institute the mark of 50, as measured manufacturing sector were: a by the Purchasing Managers’ reduction in suppliers’ deliveries Index (PMI), which represents (21.2 percent), a reduction in the expansion in the activities demand (9.4 percent), a reduction generated by this economic sector compared to the previous month. A reading in staff (18.8 percent), a reduction in inventory (0 percent), and others (18.8 percent). Meanwhile, 50 above the threshold level suggests an expansion percent of the respondents were not affected by in the manufacturing sector with respect to the the government measures due to the pandemic. previous month.

The PMI had remained above the threshold of This positive trend occurred, despite the 50 since Dec. 2020, with the months of February economic and operational complications that the

In fact,

Technology is key to success in manufacturing. >Archive

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and March as the ones with the highest growth, exceeding the threshold of 60.

Another bit of good news came from an expansion announcement by Prime Air Corp.

With an investment of $1.4 million, the Puerto Rican global transportation and logistics services company began the construction of its second controlled temperature warehouse in the cargo area of the Luis Muñoz Marín International Airport to supply the growing demand for pharmaceutical companies and medical devices on the island.

Prime Air Corp. offers air, sea or land transportation services for cargo, storage and delivery of machinery, equipment or products to any destination in the world. Specialized in the handling of air and maritime services for the manufacturing, pharmaceutical and device industries, Prime Air also transports heavy and large equipment, sensitive and refrigerated cargo, hazardous materials, as well as chartered aircraft, among others.

On the downside, Microsoft Operations Puerto Rico LLC announced that it will maintain a remote workforce in Puerto Rico and the other employees will be relocated in the different offices they have globally. This reorganization will be done gradually and will culminate in 2024.

“Microsoft plans to reduce its activities and decommission its facility in Humacao, Puerto Rico.

This process will take place over a period of several years and even after its completion, Microsoft will maintain sales and support personnel in Puerto Rico to support its customers. There is no immediate change in the roles of the employees at the Humacao facilities,” the company said, adding that its offices in Guaynabo will remain unchanged.

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Strong Presence of Foreign Financial Institutions on the Island Total capital reaches $64.4 billion

T

Brenda A. Vázquez

bvazquez@elvocero.com

here are 80 foreign financial institutions – listed among the International Banking Entities and the International Financial Entities - which are those that export financial services to non-residents, with a total capital of $64.4 billion.

These institutions came to the island, attracted by the tax benefits of Law 52 of 1989 and Law 273 of 2012 that promote Puerto Rico as an international financial center, explained Natalia Zequeira Díaz, Financial Institutions commissioner.

She heads OCIF, as the agency is known by its Spanish acronym, the government entity in charge of supervising foreign banking institutions.

Of the 80 foreign institutions that operate on the island, 27 do so under Law 52 - known as the International Banking Center Regulatory Law - which was created as an instrument to turn Puerto Rico into an international banking center with zero taxes - and they represent the majority of total capital at $63 billion. These institutions are the oldest, most robust and capital-intensive companies, Zequeira said in an interview.

There are 53 others that are under the provisions of Law 273 - known as the Regulatory

Law of International Financial Entities, which pay 4 percent in taxes - with a capital of $1.4 billion, belonging to smaller and younger companies.

“The decrees that could be granted by these laws expired in December 2019, but the Puerto Rico Incentives Code (known as Law 60) includes provisions with a 20 percent tax rate, from January 2020 onward,” she reported.

The issue of tax havens came to light after a report detailing how some of the world’s wealthiest people hide their riches. As a result, the release of the “Pandora Papers” has drawn new scrutiny on the growth of tax havens in the United States. The report by the International Consortium of Investigative Journalists has shed light on the financial dealings of the elite and the corrupt and how they have used offshore accounts and tax havens to shield trillions of dollars in assets.

How Offshore Accounts are Established

Zequeira assured that these corporations must apply for a license from OCIF and when they start operations, they must have a startup capital of $250,000 and $5 million to operate - or provide a capitalization plan - in addition to undergoing a rigorous evaluation. They need to have local staff, submit quarterly reports and verification of compliance.

She said these companies - with many coming from Mexico, the Dominican Republic, Colombia, Venezuela, Israel, France and the United Kingdom - are legal and represent an economic benefit for the island.

“A tax haven is not a crime. It has been given a

bad connotation... the global statement is not fair.

They are tax measures to stimulate the economy and help deposits in banks. These measures and incentives greatly contributed to the fact that we are no longer in recession. Puerto Rico encourages investors to establish themselves on the island for legitimate purposes,” she said.

“These corporations also have a presence in the United States. In South Dakota, there are more than 200. On the island, they must recruit four or more employees (for each entity) and the 80 companies have created close to 1,000 direct jobs and over 2,000 indirect jobs - such as lawyers and accountants - in addition to leasing commercial properties,” Zequeira added.

She assured that OCIF fulfills its oversight responsibilities, but accepted that they work with financial and personnel limitations. “For international depository banks, we only have eight examiners but we are about to get more resources. The entities are audited and if there are deficiencies or they are not in compliance, an action plan is sought or ends with its liquidation.

In this jurisdiction there is no space for noncompliance,” she pointed out.

Puerto Rico’s tax benefits, combined with the protection and strict regulations of the U.S., were outlined by Juan Lorenzo Martínez, a CPA and attorney. “These institutions think about the guarantee and security of the U.S. dollar, which is a world exchange currency. Many countries have currency devaluation problems and [people] can lose a lot of money. Another factor is that every American citizen has to pay taxes to the IRS, except Puerto Rico [residents]. If you are a [local] resident, you pay all the money on the island, you do not pay federal taxes,” he explained.

He added that in the U.S. and Puerto Rico, any person who has more than 5 percent in shares in a company must report their identity to the federal government, which is why some entrepreneurs prefer to transfer their money to anonymous accounts in other destinations.

“Anonymous corporations are allowed in Aruba, Panama and the Cayman Islands. Nobody knows who owns the shares, they [make] deposits and nobody knows who owns the money. It is a way to avoid paying taxes and protect yourself from spouses and heirs. In the Cayman Islands they only give you a key and a number and whoever has it is the person who gets the money,” he explained.

“Many prefer these little islands if they want to hide a lot of money, but they risk political changes or currency devaluation. But if you are looking for the safety of the U.S. dollar, you can come here,” he said, after acknowledging that Puerto Rico has some characteristics of a tax haven.

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House Finance Commission Hopes to Meet With the FOMB on Plan of Adjustment To discuss the enabling law, after the Board rejected the Senate version

F

Yaritza Rivera Clemente

yrivera@elvocero.com

@yaritzaclemente

aced with the statement issued by the Financial Oversight and Management Board (FOMB) objecting to the amendments made by the Puerto Rico Senate to the bill on the enabling law of the Puerto Rico government’s Plan of Adjustment (POA), the head of the House Finance Committee Jesús Santa, said that a meeting could be held between the Legislature and the FOMB to discuss the matter.

The Board issued a statement last Friday stating that House Bill 1003 would make the seventh version of the adjustment plan unsustainable for Puerto Rico, as they understand that it conditions the issuance of bonds on provisions that would cost tens of billions of dollars, which Puerto Rico does not have as the island government is bankrupt, and it would prevent public pensions from being frozen and the system reformed.

“A space is being made so that the technical groups of the House, Senate and the Board can sit down to go into detail on each of the proposals made by the Senate and clarify the cost that they entail. I know that (Senator) Juan Zaragoza’s group has those numbers and they are not as scandalous as they (the Board) intended to exemplify in the letter we received,” Santa told EL VOCERO, the sister publication of THE WEEKLY JOURNAL.

The FOMB’s Position

As per the Board’s statement: “Puerto Rico House Bill 1003, as amended and approved by the Senate, conditions the issuance of the bonds on provisions that would cost tens of billions of dollars. In addition to preventing any cuts to government retirees’ pension benefits, the Senate’s bill would prevent the freezing and reforming of the insolvent pension plans that previous Puerto Rico governments underfunded for decades. It adds costly mandates and massive spending increases as a condition to implementing the Seventh Amended Plan of Adjustment.

“The Oversight Board has been working for five years in good faith with retirees, unions, bondholders and other creditors to negotiate a Plan of Adjustment that is fair and sustainable, and with the Legislature and the Governor to pass the legislation to issue new bonds. The Oversight Board is convinced that the legislation passed endangers Puerto Rico’s ability to come out of bankruptcy and repeats the unsustainable spending practices and policies that drove Puerto Rico into bankruptcy in the first place.

“The outrageous costs of the amendments to House Bill 1003 taken together would make the confirmation of the Seventh Amended Plan of Adjustment impossible. Therefore, the Oversight Board would be forced to withdraw the proposed Plan of Adjustment from the U.S. District Court.”

Lawmakers Speak Out

The Board’s rejection of the measure was issued just hours after House Speaker Rafael “Tatito” Hernández announced that the Chamber would not consider the bill until the FOMB guarantees in writing that it would comply with the agreements

established so that there are zero cuts to pensions, and funds earmarked for the island’s municipalities and the University of Puerto Rico.

Rep. Lourdes Ramos, author of the measure that gave way to Act 7-2021, known as the Dignified Retirement Law, alleged that the “threatening” letter from the Board reflects that it wants to guarantee money for large interests.

“How good it is when you can tell people: ‘I told you so.’ In my speech in the Chamber, when the bill was being discussed, I warned them that this was a measure that gave a blank check to the Board because what was contained there did not guarantee anything that the Board would accept it,” Ramos said.

For his part, pro-independence representative Denis Márquez said that the measure is “terrible for the country… The Board has been consistent in its terrible and neoliberal policies. Each and every one of their communications, their expressions, their positions in court are in defense of their POA and their terrible policies for the country, which impoverish people and workers, and eliminate and mutilate public services to the benefit of great interests,” he charged.

For the spokesperson of the Movimiento Victoria Ciudadana in the Senate, Ana Irma Rivera Lassén, the FOMB letter corroborates her position that the Board had to be blocked in such a way that it had to go to the Legislature to negotiate the Plan of Adjustment. “We will be very vigilant about what is happening because I think the Legislature should take advantage of this time is to tell the Board: ‘Well, we are not going to do anything to issue the bonds and we have to sit down and talk about the POA,’” Rivera said.

-Managing Editor Rosario Fajardo contributed to this story.

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Developers Diversified PR is Bullish on Puerto Rico $550 million deal to oversee nine shopping centers islandwide Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

Shopping centers and other brick-and-mortar establishments have suffered during the COVID-19 pandemic, due to lockdowns and other measures to prevent the spread of the coronavirus. However, as the Puerto Rico has reopened, with local vaccination rates now at 85 percent, according to the Puerto Rico Health Department, shoppers are once again flocking to stores.

For example, Plaza Las Américas announced the early opening of new stores and restaurants between October and November for the beginning of the 2021 Christmas season. As reported by THE WEEKLY JOURNAL, these include the Springfield and Pashon stores, the Mañanitas and Smash Burger restaurants, an MCS service center and a Shopping is a sport for many Puerto Ricans. >Carlos Rivera Giusti, Archive Tesla car showroom. shopping center company known today as Site Meanwhile, the construction of The Square at San Patricio Plaza is ongoing and expected to open Centers.

“I am a big believer in the retail on the island. I in Dec. 2022 after an investment of $15 million, see the value in the properties and in the group aimed at transforming part of the shopping of people that manage them, and I am committed center into modern, open spaces for shops and to its success,” Wolstein said in a entertainment. statement sent to THE WEEKLY In recent months, another JOURNAL. company has now joined the Wolstein is an investor and the ranks of those who are bullish manager on behalf of a broader on Puerto Rico. A $550 million group of private investors. real-estate deal in Puerto Rico Anchor stores According to the company, he is brings developer Scott Wolstein include Walmart, responsible for the day-to-day back to the island to oversee a Sam’s Club, Bed operations of the portfolio that nine-shopping center portfolio, Bath & Beyond, is 93 percent leased. Developers now owned and managed by JCPenney, Best Diversified PR’s anchors include Developers Diversified PR. Buy, Caribbean Walmart, Sam’s Club, Bed Bath The shopping centers are: Cinemas, The Home & Beyond, JCPenney, Best Buy, Plaza del Sol, Plaza del Norte, Scott Wolstein of Developers Diversified PR >Courtesy Depot, TJMaxx and Caribbean Cinemas, The Home Plaza Río Hondo, Plaza Escorial, Marshalls Mega As part of the acquisition, Developers Diversified Depot, TJMaxx and Marshalls Plaza Isabela, Plaza del Atlántico, Stores PR retained all the employees from the previous Mega Stores, among others.

Plaza Cayey, Plaza Fajardo and management company. “The management team Under Wolstein’s leadership, Plaza Walmart. at the shopping centers bring important value Developers Diversified PR aims Wolstein has returned to the to the continuity of the operation and business to bring new business and island with the new Developers plans. Besides, there is not a better team than the development opportunities to the island. “We are Diversified PR, acquiring the properties he first one that already knows the shopping centers,” really excited with the expansion potential at our purchased more than 15 years ago. He and his shopping centers. It is a great moment not only for expressed Francis X. González, vice president of father founded the original Developers Diversified property management for Developers Diversified the centers but for our visitors, tenants, suppliers Realty in 1992 and expanded into Puerto Rico PR. and employees,” he added. in 2005. At the time, Wolstein was CEO of the

In fact,

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The U.S. Congress >Archive

U.S. Lawmakers Probing Puerto Rico Power Outages Demand Data LUMA stays mum on issue AP and THE WEEKLY JOURNAL Staff

A

U.S. House committee has demanded that LUMA Energy, in charge of the transmission and distribution of power in Puerto Rico, release key data amid widespread outages in the U.S. territory that have outraged and

frustrated many.

The Committee on Natural Resources ordered LUMA to submit by Oct. 22 information including the number of maintenance workers it employs, the estimated amount of time one generation unit will be inoperable and the compensation packages and titles of employees who earn more than $200,000 a year. Other documents requested include the number of voltage fluctuations that resulted in personal property damage for customers, and the cause(s) of each service disruption that occurred between June 1, 2020 and Sept. 30, 2021.

The letter came two days after officials, including LUMA CEO Wayne Stensby, testified at a hearing held by the committee to learn more about the ongoing outages in Puerto Rico.

“Many of your answers were incomplete. You refused to answer others,” stated the committee, which oversees U.S. territorial affairs.

LUMA previously was sued by Puerto Rico’s House of Representatives for similar information,

with the island’s Supreme Court ordering the company to turn over the data, although that hasn’t occurred. At the time, Stensby said the company is private and the information confidential. LUMA has continued to reaffirm these statements.

LUMA issued a statement on Friday saying its more than 3,100 employees are working hard despite “the numerous and very difficult challenges from those that oppose the transformation,” adding that much misinformation has been spread. However, the company did not address the questions and concerns raised by the committee.

Selective Outages Impact Economy

The selective outages, due mainly to several powerplant units under the purview of the Puerto Rico Electric Power Authority (PREPA) being damaged or offline, have forced schools and workplaces to close and sparked concern for those who depend on insulin or oxygen. The lack of power also has led to losses at thousands of businesses across the island, including a small store that Carmen Lydia de Jesús owns in the central mountain town of Ciales.

She estimates she has lost $6,000 as a result of not being able to open her business, noting that power surges also sparked a fire at her house and caused more than $4,000 in damage. “It’s a miracle I wasn’t burned,” she said. “We can’t continue like this. This is abusive.”

LUMA took the reins of Puerto Rico’s transmission and distribution on June 1 and has faced sharp criticism ever since. The U.S. House committee letter said that in some cases, conditions have worsened since LUMA took over.

Legislators demanded information including the number and length of outages, the causes behind every service disruption and the number of voltage fluctuations that caused property damage.

Current and former government officials have blamed the outages on the retirement of experienced employees and a lack of maintenance of generation units owned and managed by PREPA. They also note the power grid remains fragile after Hurricane Maria struck the island in September 2017 as a Category 4 storm, and that reconstruction has yet to start.

Last week, the power authority’s governing board approved a declaration of a state of emergency to speed up contracts and the purchases of costly equipment, although Gov. Pedro Pierluisi said he didn’t feel it was needed since the authority was already authorized to do that.

During the congressional hearing, Stensby testified that “the Puerto Rico electric system is arguably the worst in the U.S., and has been for some time, even prior to the tragic hurricanes of 2017. For context, the frequency and duration of outages is more than twice the next worst performer in the U.S., customer service scores are 50 percent worse than the average electric utility, and OSHA safety recordable incidents were approximately five times the industry average,” he said.

“Our operational efforts are focused not just on restoring outages, but fixing infrastructure so we can prevent the outages in the first place. Our rate of pole replacement has nearly doubled, and we’ve reconnected or replaced a number of substations and lines – some of which had not been operational since Hurricane Maria,” he added.

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Business Opportunities in the U.S. Hispanic Market Not just for products, but also for banking services

A Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

s part of the company’s expansion plans, Medalla Light, the well-known Puerto Rican beer, will now be available in 12 states and the District of Columbia. Agribusiness Lettufresh, through its alliance with Walmart Puerto Rico, is now exporting its locally grown lettuce Walmart’s stateside stores.

Meanwhile, Marvel International’s “El Gordito” hamburger doubled its presence from 100 establishments stateside to 200, in such states as Florida, New Jersey and Connecticut.

As reported by THE WEEKLY JOURNAL, these are just some of the Puerto Rican companies who have been exporting successfully in recent years to the U.S. market, some with a focus on the Puerto Rican diaspora and the larger Hispanic market. But a study points out that these business opportunities for locally made products are also relevant for the island’s savings and credit cooperatives, as they can also capture part of the Hispanic market that does not yet have banking services.

Other growth opportunities for Puerto Rican cooperatives are to use technology to expand their customer base, diversify digital products and penetrate millennial and Generation Z markets, without neglecting services to older adults.

These were the main recommendations of economist Leslie Adames, director of the Economic Policy and Analysis Division of Estudios Técnicos Inc., during a recent presentation to the Puerto Rico Credit Union Executives Association.

“Although the Puerto Rican diaspora has been growing, it represents only 9 percent of the 61 million Hispanics residing in the United States in 2019. By 2040, the population of Hispanics is projected to reach 87.6 million, 23 percent of the United States population. The Hispanic market represents an opportunity for cooperatives. 21 percent of the Hispanic population is underbanked and 9 percent is unbanked, according to a 2020 Federal Reserve report. A personal treatment and focus on customer service would position cooperatives as attractive financial institutions in contrast to commercial banks,” Adames said.

Only 4.2 million Hispanics are cooperative customers in the U.S.; this is a penetration of only 6.8 percent in the market, he indicated. “This population has an average income of less than $25,000 and an education level of high school or less, so financial inclusion is important since many opt for other alternatives of financial services such as pawn shops, check cashing services and PayDay Loans,” Adames added.

Growing Puerto Rican Diaspora

In the case of the Puerto Rican diaspora, they have greater purchasing power than other Hispanics, but many live in rented housing, he said.

Since 2000, people of Puerto Rican origin born in the United States increased to 5.6 million. The number of Puerto Ricans born on the island who emigrated grew by 27 percent to 1.6 million. The

states with the highest Puerto Rican populations are Florida, Texas, Pennsylvania, New York and Massachusetts, where there would be more opportunity for Puerto Rican cooperatives to offer them banking services.

In considering what services cooperatives could provide, Adames noted that consumer and auto loans have been the fastest growing products within the Hispanic population in the U.S. In 2017 and 2018, the percentage growth in the use of Hispanic financial services was 22 percent in personal loans, 18 percent in auto loans, 9 percent in mortgages, 8 percent in credit cards and 4 percent in checking accounts.

“An expansion in the use of digital financial services is expected, especially after the pandemic.

The digital evolution in the financial sector along with changes in demographics mark differences in usage and perceptions between generations.

One in three Gen Zers and one in five millennials obtained a loan online, which represents an increase of 1.5 times since 2018. Cooperatives and other financial entities are active in managing internal changes to adapt to the new competitive reality,” Adames said.

He recommended that cooperatives in Puerto Rico: strengthen the capital base to achieve financial flexibility; invest in alliances focused on closing the digital divide; and use technology to expand their customer base and diversify products and services with instant payments, personal finance solutions and various payment methods. Likewise, they must penetrate markets across generations: conquer millennial and Gen Z markets, while developing accessible services for older people.

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AT&T Mobility en Puerto Rico ahora es Liberty Mobile, con la red, cobertura y servicio en los que confías.

Llama al 888.996.3112 Visita tiendas y kioskos Liberty o agentes autorizados.

Crédito de hasta $1,000 con trade-in: Válido hasta 14/10/21. Requiere la activación de línea nueva o actualización (upgrade) de una línea existente para recibir hasta $1000 de descuento (equipos elegibles con trade-in elegible de Smartphone elegible con valor mínimo de $180, hasta $700 con valor mínimo de $95 o hasta $350 con un valor mínimo de trade-in de $35. Requiere compra de Smartphone nuevo elegible en un plan de pago a plazos con 0% APR que calique (36 meses de $27.78/mes o hasta $66.67/mes basado en el equipo comprado). Otras opciones de pago pueden estar disponibles y varían según la localidad. Si compra en el plan de pago en cuotas de AT&T con Next Up, el cliente es responsable y no recibirá ningún crédito por $5 /mes adicionales para la función de actualización Next Up. $0 de pago inicial solo para clientes bien calicados. Es posible que se requiera un pago inicial y depende de una variedad de factores. El descuento máximo no excederá el costo más bajo del dispositivo o el crédito máximo para el que es elegible según esta oferta. Smartphones elegibles: Luego de todos los créditos obtén el iPhone 13 Pro (precio de hasta $1,500) y iPhone 13 Pro Max (precio de hasta $1,600) con hasta $1,000 de descuento. Impuesto sobre el precio total pagadero al momento de la venta. Servicio móvil requerido: Servicio de voz y data ilimitados postpago (mínimo $65/mes si es nuevo con descuento por pago automático y factura electrónica. Paga $75/mes hasta que el descuento comience en la 2da factura. Clientes existentes pueden agregar al plan ilimitado actual si son elegibles, que puede ser menor). En planes ilimitados el video puede limitarse a velocidades standard. Aplican otras restricciones de velocidad y uso. Visite att.com/unlimited para planes ilimitados existentes. Si cancela el servicio, los créditos cesarán y adeudará el balance del plan de pago a plazos del equipo comprador. Para líneas nuevas, si cancela el servicio en cualquier otra línea dentro de 90 días luego de activación de la línea de esta oferta, los créditos cesarán. Aplica cargo por activación upgrade de $30. Devolución: Devolución dentro de 14 días (30 días para clientes FirstNet con equipos pagados por Agencias), (30 días para clientes corporativos). Puede aplicar cargo de restitución de hasta $55. Trade-in solo en Smartphones elegibles. Ver att.com/trade-in para lista de equipos elegibles.

El trade-in debe estar en buenas condiciones de funcionamiento. Requiere valor mínimo de trade-in de $180 para créditos de hasta $1000 o valor mínimo de trade-in de $35 para créditos de hasta $350. Requiere cumplir con los requisitos del programa de trade-in de AT&T. Debes hacer el trade-in del Smartphone elegible en una localidad participante y completar el intercambio dentro de los 30 días posteriores a la activación del nuevo teléfono. Este no es un programa de actualización temprana. Trade-in no puede estar en plan de pago a plazos existente. Otras obligaciones: El trade-in no alivia las obligaciones del plan de pago a plazos a AT&T u otros programas de devolución y cambio de AT&T, incluidas las devoluciones de dispositivos adquiridos recientemente, la garantía o la garantía extendida. Los dispositivos que se devolverán a través de estos programas de AT&T no se deben intercambiar a través de esta oferta. Si el valor de intercambio del equipo es mayor que el crédito para el que es elegible en virtud de esta oferta, puede recibir un crédito de intercambio único (valor mediante crédito instantáneo o tarjeta de promoción) en lugar de esta oferta de crédito de factura.

Visita att.com/trade-in para conocer los términos. CRÉDITO EN LAS FACTURAS: Créditos comenzarán dentro de 3 facturas. Recibirá créditos para ponerse al día una vez que comiencen los créditos. Aplicados en cantidades mensuales iguales durante el término completo del contrato de pago a plazos.

No excederá el menor del costo del dispositivo o la cantidad máxima de crédito elegible como se dene anteriormente. La línea inalámbrica debe permanecer en vigencia, activa y la cuenta en buen estado por 30 días para cualicar. Plan de pago a plazos comienza el día que el equipo es enviado. Para obtener todos los créditos, el dispositivo debe permanecer en vigencia durante todo el período y debes mantener el servicio elegible en el equipo durante todo el plazo del contrato. Si actualizas (upgrade) o pagas anticipadamente un contrato con descuento en un dispositivo con descuento tus créditos pueden cesar. Límites: Un trade-in por compra elegible y un crédito por línea. Puede no ser combinable con otras ofertas, descuentos o créditos. Aplican límites de compra, nanciamiento y otras restricciones. Esta oferta puede hacer que tu cuenta no sea elegible para otras ofertas seleccionadas (incluidas las ofertas de crédito de facturas) durante 12 meses. Visita tienda participante para detalles de la oferta. Términos generales de servicio: Sujeto a contrato de servicio del cliente (att.com/wca). Requiere aprobación de crédito. Límites: De compra y líneas podría aplicar. Otros cargos mensuales por línea: Un cargo de recobro de costos reglamentarios de hasta $1.50, $1.99 cargo administrativo y otros para ayudar a sufragar los gastos incurridos en el cumplimiento de las obligaciones y cargos impuestos por regulaciones de telecomunicaciones estatales y federales, un cargo variable por contribución sobre propiedad inmueble Estatal de hasta $1.00 y cargos por Servicio Universal federal y estatal. Estos cargos no son impuestos o cargos requeridos por el gobierno. El servicio de AT&T está sujeto a las políticas de manejo del network de AT&T. Ver att.com/broadbandinfo para detalles.

Precios y términos están sujetos a cambios y pueden ser modicados o terminados en cualquier momento sin noticación. ©2021 AT&T Intellectual Property. Todos los derechos reservados. AT&T, el logo tipo de AT&T y todas las otras marcas de AT&T contenidas aquí son marcas comerciales de AT&T Intellectual Property o compañías aliadas a AT&T. Todas las otras marcas son propiedad de sus respectivos dueños.

< The Weekly Journal > Wednesday, October 13, 2021

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/ Wednesday, October 13, 2021

Ricardo Álvarez-Díaz,

Licensed Architect and co-founder of the architectural firm Álvarez-Díaz & Villalón www.advfirm.com

The Federal Eviction Moratorium - What’s Next?

A

ccording to The Center on Budget and Policy Priorities (CBPP), over 11 million renters in the U.S. are behind on their rental payments. This puts them at risk of eviction if they don’t get emergency rental assistance.

Housing attorneys have said that there has already been a rise in eviction filings, while housing advocates expect the wave of evictions to build slowly over the coming weeks and months.

What to do?

The Centers for Disease Control and Prevention (CDC) recently announced it extended the federal eviction moratorium. It is their understanding that the new moratorium will give state and local governments more time to distribute Emergency Rental

Assistance (ERA) to people in need and help keep them safely and stably housed. They also believe that the moratorium enables selfquarantine and keeps people who become ill or who are at risk of transmitting COVID-19 out of congregate settings and in their own homes. It is important to note that the moratorium DOES NOT relieve renters from their obligation to pay rent.

Even though the moratorium allows for renters to continue to have a home, it creates problems for both tenants and landlords.

In the case of tenants, rental assistance is NOT automatic. Most do not know they can apply or how to apply for it. Even when tenants know the program, the application process is difficult. You must be tech-savvy and have internet access to fill it out. Additionally, the application isn’t mobile-friendly

and not everyone has a desktop computer that they can use to easily navigate and fill out the application.

In turn, landlords lose revenue since they rely on rent money to maintain their properties.

Due to this rent money deficit, landlords have had to change their operations. Some have had to leave apartments empty either because they’re fearful of nonpaying tenants or because they can’t pay for necessary repairs and renovations.

Additional challenges for low-income tenants once the moratorium lifts is the decreasing affordable housing availability. As more and more tenants get evicted, investors might chose to renovate and rent at higher market rates, making it impossible for affordable housing tenants to stay.

On the other hand, there’s

research that shows that while eviction rates are likely to increase, a wave of evictions does not appear likely. Even though eviction risk is higher for lower income properties, the risk should be mitigated by the rollout of federal emergency rentalassistance programs.

Nevertheless, emergency rental relief has been very slow to be distributed since only $3 billion out of the $46 billion in rental relief has been allocated by the federal government. The number of evictions will depend on the pace of the relief distribution, economic recovery, and the decisions landlords make during and after the moratorium lifts.

Therefore, it is essential that assistance gets to people as soon as possible and with less bureaucracy, so that the economic balance and housing rental market can continue to benefit all.

Víctor Rodríguez,

Public Affairs Specialist (Puerto Rico and the USVI) at the Social Security Administration

Social Security Supports Small Businesses

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he COVID-19 pandemic has been testing small businesses.

Running a small business can be a 24-7 endeavor.

Managing employees, inventory, scheduling, services, and marketing can be challenging even in normal times.

If you’re a small business owner, or you work for one, our online suite of services can help make your life

easier. Our business services allow you to file W-2/W-2Cs online and verify your employees’ names and Social Security numbers against our records.

Our online services at www.ssa. gov/employer will save you valuable time when you need information on filing electronic W-2s and verifying Social Security numbers.

Small business owners can also take advantage of our Business Services Online at www.ssa.gov/bso/ bsowelcome.htm. You must register

to use this free service, which also offers fast and secure online W-2 filing options to Certified Public Accountants, enrolled agents, and individuals who process W-2s and W-2Cs. For more information about electronic wage reporting, please read our publication at www.ssa. gov/pubs/EN-05-10034.pdf.

Due to the COVID-19 pandemic, we could not receive visitors at our field office except for previously arranged appointments on special

limited critical situations. However, we continue providing our services by phone and internet.

If you have questions on Social Security benefits and services, please access www.socialsecurity. gov. You could also access our automated services at 1-800-7721213 or call your local Social Security office Monday to Friday from 9 a.m. to 4 p.m. To locate the telephone number of your local field office, please input your residential zip code at www.ssa.gov/locator/ .

/ Wednesday, October 13, 2021

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Don’t Forget: It’s Flu Vaccine Time

Even if you’ve had your COVID shots

mid all the focus on COVID-19 vaccinations, U.S. health experts have another plea: Don’t skip your flu shot.

Flu cases have dropped to historically low levels during the pandemic. The U.S. and Europe experienced hardly any flu last winter, and the Southern Hemisphere just ended its second flu season of the coronavirus pandemic with little to report.

But with U.S. schools and businesses reopened, international travel resuming and far less masking this fall, flu could make a comeback. The big question is whether it will trickle in or roar back and put extra pressure on hospitals already struggling with COVID-19 surges.

“People are sick to death of hearing about having to roll on out and get vaccines of any sort,” said flu specialist Richard Webby of St. Jude Children’s Research Hospital in Memphis.

Yet after 18 months of little influenza exposure, “we probably as a population don’t have as much immunity against this virus as we typically might,” Webby said. “It makes absolute sense to go on out and get that vaccine and at least prepare for something that, you know, could be quite severe.”

Here are some things to know:

Q: Who should get a flu vaccine?

A: The Centers for Disease Control and Prevention says just about everybody needs an annual flu vaccination, starting with 6-month-old babies. Influenza is most dangerous for adults over age 65, young children, pregnant women and people with certain health conditions, such as heart or lung disease.

Q: Why do I need one this year, since flu hasn’t been a threat during the pandemic?

A: COVID-19 restrictions including masking and staying home — especially for children, who are flu’s biggest spreaders — clearly had a side benefit of tamping down influenza and other respiratory bugs. But as soon as masks started to come off, the U.S. experienced an unusual summer surge of children hospitalized with a different virus, named RSV, that usually strikes in the winter. That’s a

>AP/LM Otero, File

A

The Associated Press

worrying sign of what to expect if flu returns.

Q: What’s the forecast for flu this winter?

A: Flu is notoriously difficult to predict. But there’s a little more circulating in some countries this fall than last, including a recent uptick in China, said Webby, who directs a World Health Organization flu center. And people may be a little more vulnerable: Before the pandemic, 15% to 30% of the population was exposed to flu each year, a missing bump in immunity, he said.

“If flu does at least get a foothold in, it’s going to have more opportunity of spreading this season,” he said.

Q: When should I get a flu vaccine?

A: Now. The CDC encourages people to get their vaccine by the end of October. Doctors’ offices, retail pharmacies and local health departments have millions of doses in hand. And most Americans with health insurance can get it with no co-pay.

Q: I already got a COVID-19 vaccine. Do I really need a flu shot, too?

A: COVID-19 vaccines prevent the coronavirus and flu vaccines prevent influenza. They don’t overlap. But you can catch both viruses at the same time, or one after the other.

“Avoid the double whammy” and get both vaccines, advised the American College of

Emergency Physicians. For now, COVID-19 vaccines are available for anyone 12 and older.

Flu vaccines aren’t as powerful as vaccines against some other diseases but if people do get influenza anyway, they tend to have a much milder illness.

Q: Can I get a flu vaccine and a COVID-19 vaccine at the same visit?

A: Yes, the CDC says it’s fine to pair a flu vaccine with either a primary COVID-19 shot or a booster dose.

Q: What’s the best flu vaccine to get?

A: Flu constantly evolves, and each year’s vaccine is made to fight the strains that international experts deem most likely to circulate.

This year all the flu vaccines offered in the U.S. offer protection against all four of those strains.

Options include traditional shots or a nasal spray vaccine. There also are shots specifically designed to rev up seniors’ age-weakened immune systems, either with a higher dose or an added immune booster. There are also options for people allergic to eggs, which are used to make some flu shots.

Q: How much flu vaccine is available?

A: The CDC expects vaccine manufacturers to deliver 188 million to 200 million doses. Nearly 194 million doses were distributed last winter, a record.

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>Inter News Service

>Courtesy of Discover Puerto Rico

/ Wednesday, October 13, 2021

Coral Loss of 14 Percent Worldwide Due to Climate Change Some coral showing resilience, offering hope for recovery

T

THE WEEKLY JOURNAL Staff

he “Status of Coral Reefs of the World: 2020” report documents the loss of approximately 14 percent of the world’s coral since 2009. The report, the sixth edition produced by the Global Coral Reef Monitoring Network, provides the most detailed scientific picture to date of the toll elevated temperatures have taken on the world’s reefs.

This, the largest analysis of global coral reef health ever undertaken draws on data: spanning 40 years, in 73 countries, across 12,000 sites, collected by more than 300 scientists, and through 2 million individual observations.

Corals reefs across the world are under relentless stress from warming caused by climate change and other local pressures such as overfishing, unsustainable coastal development and declining water quality. An irrevocable loss of coral reefs would be catastrophic, scientists warn. Although reefs cover only 0.2 per cent of the ocean floor, they are home to at least a quarter of all marine species, providing critical habitat and a fundamental source of protein, as well as lifesaving medicines. It is estimated that hundreds of millions of people around the world depend on them for food, jobs and protection from storms and erosion.

However, the report also found that many of the world’s coral reefs remain resilient and can recover if conditions allow, providing hope for the long-term health of coral reefs if immediate steps are taken to stabilize emissions to curb future warming.

Paul Hardisty, CEO of the Australian Institute of Marine Science: “This study is the most detailed analysis to date on the state of the world’s coral reefs, and the news is mixed. There are clearly unsettling trends toward coral loss, and we can expect these to continue as warming persists.

Despite this, some reefs have shown a remarkable ability to bounce back, which offers hope for the future recovery of degraded reefs... Climate change is the biggest threat to the world’s reefs, and we must all do our part by urgently curbing global greenhouse gas emissions and mitigating local pressures.”

The analysis, which examined 10 coral reefbearing regions around the world, showed that coral bleaching events caused by elevated sea surface temperatures (SST) were the main driver of coral loss, including an acute event in 1998 that is estimated to have killed eight percent of the world’s corals, which, to put this in context, is more than all the coral that is currently living on reefs in the Caribbean or Red Sea and Gulf of Aden regions. The longer-term decline seen during the last decade coincided with persistent elevated SSTs. The analysis investigates changes in the cover of both live hard coral and algae. Live hard coral cover is a scientifically based indicator of coral reef health, while increases in algae are a widely accepted signal of stress to reefs. Since 1978, when the first data used in the report were collected, there has been a 9 percent decline in the amount of hard coral worldwide. Between 2010 and 2019,

the amount of algae has increased by 20 percent, corresponding with declines in hard coral cover.

This progressive transition from coral to algaedominated reef communities reduces the complex habitat that is essential to support high levels of biodiversity.

The report also highlighted that although during the last decade, the interval between mass coral bleaching events has been insufficient to allow coral reefs to fully recover, some recovery was observed in 2019 with coral reefs regaining 2 percent of the coral cover. This indicates that coral reefs are still resilient and if pressures on these critical ecosystems ease, then they have the capacity to recover, potentially within a decade, to the healthy, flourishing reefs that were prevalent pre-1998.

Key findings:

• Large scale coral bleaching events are the greatest disturbance to the world’s coral reefs.

The 1998 event alone killed eight percent of the world’s coral, the equivalent of about 6,500 square kilometers of coral. The greatest impacts of this mass bleaching event were seen in the Indian Ocean, Japan and the Caribbean.

• Between 2009 and 2018, the world lost about 14 percent of the coral on its coral reefs, which equates to 11,700 square kilometers of coral, more than all the living coral in Australia.

• Reef algae, which grows during periods of stress, has increased by 20 percent over the past decade. Prior to this, on average there was twice as much coral on the world’s reefs as algae.

• Sharp declines in coral cover corresponded with rapid increases in sea surface temperatures, indicating their vulnerability to spikes, a phenomenon that is likely to happen more frequently as the planet continues to warm.

/ Wednesday, October 13, 2021

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The C-Note: Luquillo’s First Jazz Club to Open Life in Puerto Rico: Good things are happening

uquillo is about to open its first jazz club with an iconic name: The C-Note. Construction began months ago on an existing threestory building located on Calle Fernández García, with dramatic views of Luquillo beach.

The façade is adorned with a mural painted

by Puerto Rican artist Frank Andújar, whose art is infused with Spanish, African and Creole influences. Located on a prominent corner just off the town square, the colorful club stands out among its neighbors.

The C-Note is a concept devised by Charlie Sepúlveda, Puerto Rico’s Latin Grammy winning trumpeter, his wife Natalia Mercado, who sings with Charlie, and Lori Bluett, part owner of Wicked Lilly in Condado and longtime realestate developer. Érika Suárez, an award-winning Puerto Rican chef and former executive chef of Wicked Lilly and El Conquistador, rounds out the concept’s ownership.

A true jazz club has long been a goal for Charlie.

“Having my own jazz club is a dream for me,” Charlie said. After hearing Charlie’s music with his band, The Turnaround, Bluett sought out Charlie to play the grand opening night of Wicked Lilly and its bar Tryst two years ago. Bluett and Charlie shared their dream of having a jazz venue on the island.

The C-Note was born that night.

Since Lori and Charlie both live in Luquillo, they decided their town was the right location.

“Luquillo needed some musical energy,” she said.

Lori sought an ideal building for a jazz club on the beach. She also has more real-estate projects in the works in Luquillo and around the island.

Jazz is integral to Bluett’s family, who is from California. Her father was a jazz musician and was trained on the clarinet. He gave up being a

>All photos are courtesy

L

Damian R. LaPlaca

professional musician to support his family and he became an engineer on a full scholarship at the University of California, Berkeley. Lori’s son shares the same musical passion, and he wrote an essay on jazz that he shared with Charlie to seal the deal of opening a jazz club with his mother.

Lori’s father’s 1940’s era clarinet will be a permanent part of the C-Note. It will hang on the third floor behind Andújar’s painting of a clarinetist. Charlie was awed at the sight of the family treasure when Lori unveiled it during a promotional event.

Charlie’s last big gig, just before the pandemic, was a sold-out three-night run at the famed Dizzy’s Club at Lincoln Center in New York, where one reviewer foretold the need for a jazz club in Puerto Rico. “The performance was historic for several reasons. It dispelled the misconception that Puerto Rico lacks a robust jazz scene. Also, the sold-out performances demonstrated there is a demand for Puerto Rican Jazz that is not being filled (club owners, take heed!).”

The C-Note will offer live music throughout the week. Charlie has commitments from local jazz greats Nestor Torres, James Williams, Henry Cole, David Sanchez, Randy Brecker, William Cepeda and Miguel Zenón. Charlie will also play his jazz, at times solo, with his quartet, and with The

Turnaround. A beautiful Baldwin piano, cello and drum set are permanent features of the second floor.

Fridays and Saturdays will feature two shows with different bands, one show in the afternoon, and one in the evening. Charlie is considering jamming with students from the Puerto Rico Conservatory of Music, where he teaches. Sundays will be devoted to a Jazz Brunch. They plan on offering fresh oysters on Sundays, along with other delicacies.

The first floor will serve tapas and will include a wine and cigar store. The second floor is devoted to the live music and will have a seating area. It will also host a recording studio. The top floor, with a commanding view of the undulating waves of Luquillo beach, will be a cigar smoking area with a whisky, bourbon, scotch and wine bar.

Recently, Charlie gave a free jazz concert in the street in front of the C-Note, and Chef Suárez cooked a delicious New Orleans style gumbo. The C-Note will be a complement to the existing live music venues in Puerto Rico, including the piano bar at the Cannon Club and Carli’s Bistro and Piano Bar, both in Old San Juan.

Charlie and Lori are targeting November for their first opening gig. Plenty of parking exists in the large free parking lot off the town square.

More information about the club can be found at C-Note’s website at www.cnotepr.com, where tickets can be purchased.

Good things are happening in Luquillo.

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