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.

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 1948 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. Through this project, a rural agricultural society was transformed into an industrial working class.

Although initially touted as an economic miracle, by the 1960s, Operation Bootstrap was increasingly hampered by a growing unemployment problem. 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.

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.

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	Employment net loss ratio
1940s	230,000	N/A	56,000	N/A	N/A	N/A
1950s	216,000	6.08%	55,000	1.79%	15,000	5.24%
1960s	125,000	42.13%	81,000	47.27%	65,000	23.99%
1970s	68,000	45.60%	132,000	62.96%	6,000	2.91%
Total	162,000	70.43%	76,000	135.71%	86,000	30.07%

File:Salaried-employees-in-puerto-rico-during-operation-bootstrap.png

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

• United States Department of Agriculture
• Commonwealth Oil Refining Company, Inc.
• Progress Island U.S.A.
• Puerto Rican Pottery

Further reading

• Teodoro Moscoso and Puerto Rico's Operation Bootstrap by A.W. Maldonado. Gainesville: University Press of Florida, 1997. ISBN 0-8130-1501-4
• Las campañas de control de la natalidad contra las mujeres, by Gloria Arimón en Servir al pueblo, número 233, 1984.
• Economic History of Puerto Rico: Institutional Change and Capitalist Development, by James L. Dietz. Princeton, NJ: Princeton University Press, 1986.
• The Disenchanted Island: Puerto Rico and the United States in the Twentieth Century, by Ronald Fernández. 2ª ed. Westport CT: Praeger, 1996.
• Factories and Food Stamps: The Puerto Rico Model of Development, by Richard Weisskoff. Baltimore, MD: Johns Hopkins University Press, 1985.

External links

• Democracy at Work in Rural Puerto Rico (ca. 1940s)
• A Puerto Rican resource
• Young Lords in Lincoln Park