[14][15] The main drivers of Puerto Rico's economy are manufacturing, which primarily includes pharmaceuticals, textiles, petrochemicals, and electronics; followed by the service industry, notably finance, insurance, real estate, and tourism.

[b][c] The geography of Puerto Rico and its political status are both determining factors on its economic prosperity, primarily due to its relatively small size as an island; its lack of natural resources used to produce raw materials, and, consequently, its dependence on imports; as well as its relationship with the United States federal government, which controls its foreign policies while exerting trading restrictions, particularly in its shipping industry.

Academically, most of Puerto Rico's economic woes stem from federal regulations that expired, have been repealed, or no longer apply to Puerto Rico; from its inability to become self-sufficient and self-sustainable throughout history; from its highly politicized public policy which tends to change whenever a political party gains power; as well as from its highly inefficient local government which has accrued a public debt equal to 66% of its gross domestic product over time.

They inhabited the island for centuries before the arrival of the Spanish in 1493 marked the beginning of their extinction.History The Taíno captured and ate small animals, such as mammals, earthworms, lizards, turtles, and birds.

Livestock husbandry was not practiced as there were no large animals native to Puerto Rico that could be raised in an agricultural setting in order to produce commodities such as food, fiber or labor[citation needed].

In 1935, United States President Franklin D. Roosevelt launched the Puerto Rican Reconstruction Administration, which provided agricultural development, public works, and electrification of the island.

[44] During fiscal year (FY-2012), the Consolidated Budget for the archipelago, including both direct transfers from federal programs (Social Security and Medicare benefits for workers, Veteran's benefits, Pell Grants and student loan's interest subsidies and miscellaneous temporary appropriations -e.g. American Recovery and Reinvestment Act of 2009 grants totalling $2.6 billion-) represented more than $28.7 billion, or approximately 30% of its GDP, while revenues surpassed $31 billion.

[22] In late January, the federal control board gave the Government of Puerto Rico until 28 February to present a fiscal plan (including negotiations with creditors) to solve the problems.

[50] A review of the economic situation in May 2017 by the Official Monetary and Financial Institutions Forum, an independent think tank, led to a warning that the planned "draconian budget-tightening" would cut up to 6% of the island's GNP over the next four years, leading to continuing decline.

"Puerto Rico urgently needs an International Monetary Fund-style programme involving debt relief in return for a commitment to far-reaching reforms ... that will facilitate growth", the group concluded.

Puerto Rico's geographical location within the Caribbean exacerbates these issues, making the scarce existing crops vulnerable to the devastating effects of Atlantic hurricanes.

Common fish consumed by residents include cod (bacalao), mahi-mahi (pez dorado), marlin (marlín), salmon (salmón), snapper (chillo), trunkfish (chapín), and tuna (atún).

Almost all wood used on the island is imported even though a study conducted more than two decades ago by the U.S. Forest Service concluded that local soil could sustain a lumber industry if the proper species were used.

[69] Expired patents, cheaper manufacturers (such as those in Brazil, China, India, and South Korea), the rise of generic drugs, and high production costs now also pose a challenge to the industry.

[74] The following includes some public and private projects aimed at increasing the tourism industry in Puerto Rico: The gambling sector is also important to the economy (employing 3,409 people, 2017 [75]), and it encompasses 20 casinos all attached to hotels and resorts acting as tourist destinations.

This is mandatory, according to Laws of Puerto Rico, casinos must be attached to hotels and resorts, and must be located within "zonas históricas, antiguas o de interés turístico" – historically important zones of tourism.

Thanks to this abundance of junior colleges—and the presence of other institutions of higher education— the percentage of Puerto Ricans with bachelor's degrees, at 18.3% according to the 2000 Census, is roughly comparable to the lower tier of American states.

To meet energy demands, Puerto Rico must import oil at a rate of 8.0 billion kWh and about 1,499,196 km3 of natural gas per year as well as a very large amount of coal.

Several communications service providers offer triple play (Internet + television + telephony) on the island with Claro Puerto Rico, and Liberty Media being the most prominent.

Because of this, Puerto Rico controls neither its money supply nor its interest rates, being subject instead to the monetary policy of the United States; particularly to the operations performed by the Federal Reserve System.

[104] In early 2017, the Puerto Rican government-debt crisis posed serious problems for the government which was saddled with outstanding debt of $70 billion or $12,000 per capita[19] at a time with a 45 percent poverty rate and 14.2% unemployment that is more than twice the mainland U.S.

Newly elected governor Ricardo Rosselló discussed the situation in an interview with the international Financial Times in mid January and indicated that he would seek an amicable resolution with creditors and also make fiscal reforms.

They also said that "Congress must enact measures recommended by both Republicans and Democrats that fix Puerto Rico's inequitable health care financing structure and promote sustained economic growth.

"[107] In late January, the federal control board created under PROMESA gave the government until 28 February to present a fiscal plan (including negotiations with creditors) to solve the problems.

[21] Governor Rosselló hired investment expert Rothschild & Co in January 2017 to assist in convincing creditors to take deeper losses than they had expected on Puerto Rico's debts.

[ab] Puerto Rican consumers ultimately bear the expense of transporting goods again across the Atlantic and Caribbean Sea on U.S.-flagged ships subject to the extremely high operating costs imposed by the Jones Act.

[55][56] Similarly, when looking at forestry, even though a study conducted more than two decades ago by the U.S. Forest Service concluded that local soil could sustain a lumber industry if the proper species were used, almost all wood used on the island is imported.

[59] Higher education suffers the same fate: Puerto Rico spends almost $800M per year on its state university even though none of its programs and schools appear in any prestigious ranking whatsoever[according to whom?].

[ak][149][150] The Treasury department also tends to publish its comprehensive annual financial report (CAFR) late, sometimes 15 months after a fiscal year ends, while the government as a whole constantly fails to comply with its continuing disclosure obligations on a timely basis.

Starting soon after World War II, poverty, cheap airfare, and promotion by the local government caused waves of Puerto Ricans to move to the mainland United States.