Puerto Rico’s fragile economy dealt new blow by Maria

PUERTO RICO/NEW YORK (Reuters) – Chan Lo is racing against the clock to save thousands of dollars of supplies at his sushi restaurant in San Juan’s Condado beachfront community.

He has roughly $16,000-worth of perishable goods stored in his restaurant Nagoya Sushi & Tiki Bar – in jeopardy as the battered island waits for power and water to be re-established.

“I give it about three or four days maximum if the (power) doesn’t come back on and there are no generators available,” he said. “Everything will have to be thrown out.”

Puerto Rico’s economy was already fragile before Hurricane Maria barreled into the island, but the strongest storm to hit the U.S. territory of Puerto Rico in nearly 90 years could inflict heavy damage on the island’s health.

Small businesses like Lo’s will be a significant part of the recovery, as they account for 80 percent of all private sector workers, according to a New York Federal Reserve report. And getting energy to them, and to manufacturers and hotels and other engines of the economy will be crucial for the island’s ability to bounce back.

After Maria made landfall midweek on the island of 3.4 million people as a major Category 4 hurricane, the storm’s wind and water downed nearly all power and communications.

Governor Ricardo Rossello said the Puerto Rico Electric Power Authority’s grid was so severely hit by the storm that it could be months before electricity is restored to all customers. Making matters worse, PREPA has been in bankruptcy since July.

Disaster modeler Enki Research estimates damage to the island at $30 billion, with $20 billion in direct physical damage and $10 billion in economic impact.

“Puerto Rico is in a precarious state,” said Chuck Watson, a disaster modeler at Enki.

‘A MEASURABLE IMPACT’

Puerto Rico has none of the economic might of other places hit hard in this active hurricane season, like the states of Texas and Florida. The island has spent most of the last ten years in recession. Its GDP shrank by more than one percent for seven of the last 10 years through 2016, the poverty rate is over 40 percent and unemployment stands at 10 percent.

The chaos unleashed by the breakdown in basic services, a lack of cash and gas shortages has put many businesses into limbo, and the short-term effects are likely to be severe. Some Puerto Ricans are, however, already looking ahead to the economic boost that could be delivered by investment in the recovery.

The…

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