Puerto Rico by Jorge Duany

Author:Jorge Duany
Language: eng
Format: epub
Publisher: Oxford University Press
Published: 2017-06-15T00:00:00+00:00

How did Operation Bootstrap transform the Island’s economy?

In the two decades after the end of World War II, Puerto Rico’s rates of economic growth were among the highest in the world, averaging 5.3 percent during the 1950s and 6.8 percent during the 1960s. In the immediate postwar period, the Island offered US businesses the highest profit rates in the Americas. As a result, hundreds of US factories relocated to Puerto Rico. In 1956 the net income generated by manufacturing ($175.3 million) for the first time surpassed the share in agriculture ($162.1 million). At its peak during the 1950s, on average, one factory was set up every day. By 1958, Puerto Rico’s Economic Development Administration had promoted 494 factories, employing 36,900 workers. By 1969, it had attracted 1,785 factories with 106,977 workers in Puerto Rico.

The Island’s postwar industrialization led to impressive socioeconomic successes. Per capita Gross Domestic Product (GDP), measured in current dollars, practically quintupled, from $278 in 1950 to $1,353 in 1970. Less dramatically, unemployment declined from 12.9 percent in 1950 to 10.8 percent in 1970. Meanwhile, manufacturing employment grew from 55,000 workers in 1950 to 141,000 workers in 1970. Real wages, measured in 1984 prices, nearly quadrupled, from a weekly average of $41.64 in 1952 to $153.18 in 1972. The annual reports of the Puerto Rico Planning Board documented the constant growth in the local production of cement, the number of motor vehicles and telephones, and the consumption of electrical power. Such figures were widely considered indicators of economic development, along with average life expectancy and the number of teachers and physicians, which also increased significantly.

Progress in wages, employment, and living standards was directly related to the free movement of labor between the Island and the US mainland. During the 1950s, an estimated 325,000 Puerto Rican workers migrated to the United States, mostly to the East Coast. Had such mass migration not taken place, the Island’s unemployment rate would have been 22.4 percent in 1960, almost double the actual rate of 13.2 percent. Exporting surplus labor thus became part of the government’s economic development plans, helping to stem population growth and unemployment levels. As government planners predicted in the 1940s, migration became a survival strategy for thousands of Puerto Rican families.

For two decades, Operation Bootstrap served as a model of economic development for poorer countries in Asia, Africa, and Latin America. Thousands of foreign observers—from Haiti and Ecuador to India and Iran—visited Puerto Rico to learn firsthand about “industrialization by invitation” under the Point Four Program (created in 1950 by the Truman administration). Formerly dubbed “the Poorhouse of the Caribbean,” the Island became increasingly known as a “Showcase of Democracy.” The living conditions of most Puerto Ricans undoubtedly improved as a consequence of Operation Bootstrap. Whether the Island’s postwar industrialization experience could be exported to other countries was a more dubious proposition.

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