The CEDS is a major step in the process of establishing an EDA approved Economic Development District.

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Economic Development

South Puerto Rico Municipios





Juana Diaz


A Diverse Region

Full of Opportunity

It is unlikely that any regional economy represented by an existing or proposed EDD has ever endured the multiple economic hardships over a longer period of time than the six municipalities comprising the Southern Puerto Rico Economic Development District (SPREDD). Starting in 2006, a key federal tax incentive for manufacturing in U.S. territories (section 936 of the Internal Revenue Code of the United States) was completely phased out, which coincided with the start of an enduring recession, where the GDP of Puerto Rico decreased from $103.9 billion in 2006 to $88.4 billion in 2019.¹ During this timeframe, Puerto Rico lost nearly 239,000 jobs, including 43,000 manufacturing jobs. In May 2017, the Commonwealth of Puerto Rico declared a form of bankruptcy by means of reorganizing under Title III of PROMESA, which was enacted because there was no provision for a U.S. territory to reorganize under the U.S. Bankruptcy Code.

This is the space for a summary in Spanish. 

This is the space for a summary in Spanish. 

Shortly after reorganizing under Title III, Puerto Rico was devastated by Hurricanes Irma and María in September 2017. Hurricane María was the most intense hurricane to make landfall in Puerto Rico since 1928.² Hurricane damage to the electrical grid, disruptions to telecommunications, and other infrastructure damage resulted in substantial business losses and negatively impacted Puerto Rico’s ailing economy. As noted in Chart 1, the Government Development Bank for Puerto Rico Economic Activity Index (GDB-EAI), which is highly correlated with GDP levels and growth rates, dropped from 122.1 (1980 = 100) in August 2017 to 98.8 in November 2017. By the GDB-EAI metric, the economy of Puerto Rico was setback almost 40 years because of Hurricanes Irma and Maria. In the last 40 years, based on the GDB-EAI, the economy of Puerto Rico has been stagnant, with a compound annual growth rate of only .36%.

Recovery was complicated by political instability³ and slow approval of hurricane recovery funds. As Puerto Rico was starting to make inroads to an economic recovery, by means of registering a 1.2% increase in GDP during 20194, in early 2020, the SPREDD region, as well as other areas in southern Puerto Rico, were plagued by a series of earthquakes, with the strongest registering 6.4 on January 7, 2020. The epicenter of the latter occurred in the offshore deformation zone bound by the Punta Montalva Fault on land and the Guayanilla Canyon offshore5. Although there is no official estimate of damages and losses as a result of the earthquake on the COR3 transparency portal, in March 2021 the AAFAF (Puerto Rico Fiscal Agency and Financial Advisory Authority) published a preliminary estimate of damages and losses of $782 million. Also in March of 2021, Puerto Rico, like the rest of the world, began to experience the widespread impacts of COVID-19. With 21.3% of Puerto Rico’s population 65 years and older6, COVID-related lockdowns were stringent.

Map 2: Preliminary map of the January 7, 2020 Mw 6.4 Puerto Rico co-seismic landslides. The impacted area shown in the map completely covers the SPREDD Region. Credit: Knoper, Clark, Medwedeff, Townsend, Gong (University of Michigan), Zekkos (University of California Berkeley, Kirschbaum (NASA GSFC)

Chart 1: Government Development Bank of Puerto Rico Economic Activity Index. 

1. Source: World Bank Metric: Constant 2010 US$

2. Homeland Security Operational Analysis Center (HSOAC)

3. Puerto Rico had three governors during the month of August 2019

4. World Bank


6. U.S. Census