11 August 2006

Making Economic Growth Happen

---As predicted, on the workday before school starts next week, a measly work brigade with a battered digger began tearing up Carbonell Street again. Five fat guys in bulging safety vests wriggled across the dirt, accomplishing nothing except the creation of a dust cloud. Woo-hoo.

The Jenius has a file called "Stuff 101." It's a collection of odds and ends found while surfing the Web. Here's one such piece, from late January, 2006:

Almost every study on government support for entrepreneurial activity aimed at economic growth cites the following three policy actions as key factors:

1) - Cut regulation of small business
2) - Cut and simplify taxes
3) - Educate entrepreneurs on the basics of business formation and growth management

Now guess how many of these Puerto Rico is actually doing?

You got it: None. Zero. Zip, zilch, nada, el big-o goose-egg-o.

The list is from a post in The Entrepreneurial Mind. The blog's title is interesting because as an entity, the government of Puerto Rico doesn't have an entrepreneurial mind. It used to have a laborer's mind, all muscles and machines, but lately, going back to that mentality would be an improvement because Our government has simply lost its mind.

Can a government have an entrepreneurial mind? Of course it can. In fact, it might be the only viable state of mind (pardon the pun) that a government can have. Forward-thinking, a vision for opportunities, minimizing risks, hell-bent on making a difference, striving for growth, aiming for satisfied customers, bold and self-confident...These are the traits of the entrepreneur, as well as that of a government on the fast-track to success.

Consider the alternatives:

--- Complacent government: Nothing new is attempted, the past reigns supreme, don't make waves. Stagnation follows. Think Cuba.

--- Belligerent government: Destroy rather than create, gains are wrenched from others (even from citizens), shoot first ask questions later. Chaos ensues. Or another election is stolen like U.S.A. 2000 and 2004.

--- Selfish government: Politicians as parasites, centralized power struggles over minor issues, corruption. Stupidity ensues. Bienvenido a Puerto Rico.

Are there entrepreneurial governments out there? What would you call Singapore, Hong Kong, Ireland, New Zealand and Australia? Almost every month one or more of them sets a new standard for business and economic growth, whether it's lowering taxes for export-based businesses or streamlining regulations to cut processing time by 90% or launching a website to coordinate business development with long-range economic policies. And aren't We tired of hearing how these competitors are righteously kicking Our butts? Well, We keep hearing it because Our butts keep getting kicked.

What has Puerto Rico done lately in this arena? Think "Bizarro World," where the opposite of reality is commonplace:

--- Regulations for small busineses have increased since 1998, despite a much-trumpeted "fast-track" system for permits and licenses. By many accounts, it takes the same time to fast-track something as it took to do it "normally" before, except that now you have to (legally) pay more money to get things to happen.

--- Taxes have gone up and will do so again. Enough said.

--- What passes for entrepreneurial education in Puerto Rico is like learning about the ocean by watching SpongeBob SquarePants: it is laughable, childish and a squirrel (from Texas!) is smarter by far.

Okay, enough with the bashing. What can We do?

1) Disband the local Retailer's Union (Centro Unido de Detallistas). They purport to represent small and medium-sized businesses, but they are a nothing but a whiny, incestuous canker sore masquerading as a business group. Why do I start here? Because getting rid of them opens a long-closed door to effective ideas and competent people.

2) Draft legislation aimed at three major targets: simplifying the permits and licenses procedures; reducing the tax burden for self-employed and small (under 25 employee) businesses and establish incentives for knowledge-based businesses that generate at least 33% of their revenue from non-local markets.

3) Throw The Fools out. Elect candidates who, even if they don't really understand what it is to be an entrepreneur, understand that over 65% of Our economic wealth is generated from small and medium-sized businesses. If they can understand that (a big "if" in My mind), We have a chance to gain some ground.

Okay, Let's get it done.

The Jenius Has Spoken.

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