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Companies in the United States have benefited from billions of dollars in vital federal recovery funds paid in Puerto Rico in the aftermath of Hurricane Maria, even as federal laws require local companies to award contracts to companies after a disaster scenario, reveals a new report.
"Ninety per cent of federal contracts are awarded to companies headquartered outside of Puerto Rico," said Deepak Lamba-Nieves, research director at the Center for a New Economy (CNE), a non-partisan think tank. "Although there are federal provisions that encourage local recruitment, especially after disasters, these provisions have not been fully met."
Experts from the Center for a New Economy (CNE) on Wednesday released a new report showing that of the more than $ 5 billion that Puerto Rico received between September 20, 2017 and August 22, 2018, nearly $ 500 million spent in Puerto Rico-based companies, while more than $ 4 billion has been allocated to companies based in the United States or other foreign companies.
Of the 45 federal agencies that signed recovery contracts in the aftermath of the hurricane, 24 have not awarded any contracts to Puerto Rico-based companies, said Raúl Santiago-Bartolomei, research associate at the CNE.
The Stafford Act, which is considered to be the centerpiece of federal disaster policy, states that "local businesses" should give preference, as far as possible and possible, to emergency contracts in the event of a disaster. or serious emergency.
The researchers also examined how the provision was implemented in New Orleans (Louisiana) after Hurricane Katrina and compared it to Puerto Rico. The data collected by CNE show that a similar pattern has occurred. Most federal collections funds were used to award reconstruction contracts to foreign companies.
The underlying idea is that a federal disaster response and recovery plan should help revive a depressed economy by injecting millions of public funds into the local economy, promote local investment and encourage growth. in the devastated territory.
"Everyone is talking about all the federal funds that Puerto Rico is about to receive and many view them as the salvation of the Puerto Rican economy, but if these funds do not have a real local impact, then Class, president and founder of CNE.
According to Resident Commissioner Jenniffer González, who represents Puerto Rico in the US Congress as a non-voting member, the federal government has allocated more than $ 44 billion in federal aid to help Puerto Rico recover from Hurricane Maria . post-Maria infrastructure transformation could cost nearly $ 130 billion; This includes upgrading the electrical infrastructure and upgrading the telecommunication and water systems.
While only $ 5 billion in federal funding was disbursed a year after Hurricane Maria, the CNE said there was still time to ensure that local businesses hold a significant share of the recovery funds. CNE believes that recovery can take at least a decade.
As CNE experts continue to study the economic impact of post-hurricane reconstruction in Puerto Rico, they also recommend that the Puerto Rican government be more transparent with contracts disbursed as funds federal governments are invested in the island. They urge that the island government publish collection contracts in existing databases as and when they are published.
"There is an avalanche of contracts to come in. We need to monitor this process and do due diligence," said Lamba-Nieves.
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