Operation Bootstrap

For other uses, see Bootstrapping and Bootstrapping (law).

Operation Bootstrap (Spanish: Operación Manos a la Obra) is the name given to a series of projects which transformed the economy of Puerto Rico into an industrial and developed one. The federal government of the United States together with what is known today as the Puerto Rico Industrial Development Company set forth a series of ambitious economical projects that evolved Puerto Rico into an industrial high-income nation. Bootstrap is still considered the economic model of Puerto Rico as the island has still not been able to evolve into a knowledge economy.[lower-alpha 1]

History

The island's traditional economy was based around sugarcane plantations. By the middle of the twentieth century it remained one of the poorest in the Caribbean, and in 1942 the United States government began Operation Bootstrap, which invested millions of dollars into the Puerto Rican economy. Envisioning that a densely populated island like Puerto Rico with now over 1000 persons per square mile could not subsist on an agrarian system, the government's Administration of Economic Development —today known as the Puerto Rico Industrial Development Company (PRIDCO)— encouraged the establishment of factories.

The US government in Puerto Rico enticed US companies by providing labor at costs below those on the mainland, access to contiguous US markets without import duties, and profits that could transfer to the mainland free from federal taxation. The Administration of Economic Development invited investment of external capital, importing the raw materials, and exporting the finished products to the mainland. To entice participation, tax exemptions and differential rental rates were offered for industrial facilities. As a result, Puerto Rico's economy shifted labor from agriculture to manufacturing and tourism. The manufacturing sector has shifted from the original labor-intensive industries, such as the manufacturing of food, tobacco, leather, and apparel products, to more capital-intensive industries, such as pharmaceuticals, chemicals, machinery, and electronics.[2] Through this project, a rural agricultural society was transformed into an industrial working class.[3]

Although initially touted as an economic miracle, by the 1960s, Operation Bootstrap was increasingly hampered by a growing unemployment problem.[4] As living standards and wages in Puerto Rico rose, manpower-intensive industries faced competition from outside the United States. It also faced criticism from civil rights groups and the Catholic Church, who perceived the government promoting birth control, encouraging surgical sterilization, and fostering the migration of Puerto Ricans to the United States.[5]

As of 2005 the continental United States remains Puerto Rico's major trading partner, received 86% of Puerto Rico's exports and providing 69% of its imports.[6]

Effects

Salaried employees in Puerto Rico during Operation Bootstrap
Decade Jobs in fishing & agriculture Decade-over-decade ratio Jobs in manufacturing Decade-over-decade ratio Employment net loss[lower-alpha 2] Employment net loss ratio
1940s
Steady 230,000
Steady N/A
Steady 56,000
Steady N/A
Steady N/A
Steady N/A
1950s
Decrease 216,000
Decrease 6.08%
Decrease 55,000
Decrease 1.79%
Decrease 15,000
Decrease 5.24%
1960s
Decrease 125,000
Decrease 42.13%
Increase 81,000
Increase 47.27%
Decrease 65,000
Decrease 23.99%
1970s
Decrease 68,000
Decrease 45.60%
Increase 132,000
Increase 62.96%
Decrease 6,000
Decrease 2.91%
Total
Decrease 162,000
Decrease 70.43%
Increase 76,000
Increase 135.71%
Decrease 86,000
Decrease 30.07%
Chart demonstrating how the economy of Puerto Rico shifted from agriculture to manufacturing by showing how the salaried employees during Operation Bootstrap significantly increased manufacturing jobs (green line) while decreasing agricultural jobs (blue line).

See also

Further reading

Notes

  1. ↑ FPH (in Spanish) "[...] nuestro actual modelo económico continúa fundamentado en los principios establecidos por Operación Manos a la Obra."[1]
  2. ↑ While the total sum of employment in fishing, agriculture, and manufacturing did experience a net loss, it should be noted that the industrialization process created jobs in other sectors. The net loss portrayed in this table only takes into account direct jobs associated within these industries without taking into account the indirect jobs associated with them such as those in the service industry and government. The financial sector grew from 10% of GNP in 1950 to 14.4% in 1980, and the governmental sector grew from 10% in 1950 to 17.1% in 1980.[4] Regardless of all this, Puerto Rico did experience an overall net loss due to Bootstrap. The data show that the new economic model generated growth but no employment. New jobs created in manufacturing did not fully compensate for jobs lost in agriculture.[7]

References

  1. ↑ "Operación "Manos a la Obra" (1947)" (in Spanish). Fundación Puertorriqueña para las Humanidades. Retrieved October 6, 2013.
  2. ↑ "Bootstrapping". NiN. Retrieved 2010-07-15.
  3. ↑ United States Department of Agriculture. "Democracy at Work in Rural Puerto Rico (ca. 1940s)". Prelinger Archives. Retrieved 2010-07-15.
  4. 1 2 "Operación "Manos a la Obra" (1947): Industrialización y crecimiento". Fundación Puertorriqueña de las Humanidades & National Endowment for the Humanities (NEH.GOV). Retrieved 2010-07-15.
  5. ↑ "Women in World History". Center for History and New Media, George Mason University. Retrieved 2009-08-08.
  6. ↑ "Operation Bootstrap". about.geography. Retrieved 2009-08-08.
  7. ↑ "Aspectos sociales de Manos a la Obra" (in Spanish). Fundación Puertorriqueña de las Humanidades. Retrieved October 6, 2013.
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