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“This Town is Dead”: the Long Decline of Arecibo, Puerto Rico

“I’m at the end of my wits,” “Everybody is in a tight spot,” “I’m running out of hope”: these are the words of the small business owners in the small city of Arecibo, Puerto Rico. As a child, I grew up with stories of Arecibo’s great industries and entrepreneurial spirit. Since 1995, business owners, merchants and residents have seen the drastic decay of the local economy. The lasting effects of the Great Recession and the recent implementation of the IVU agrandado (11.5% sales and use tax) has dissipated any hopes of an increase in commercial activities in the near future. Arecibo and many other municipalities across the island are veritable ghost towns, stuck in a disheartening state of social, economic and political stagnation. Now more than ever, people are migrating in greater numbers to the San Juan metropolitan area and the US mainland expecting to set up shop and start a new life.

Governor Alejandro García Padilla’s declarations on Puerto Rico’s inability to pay its debt have sparked an outburst of investigative reports and articles on the Puerto Rican crisis and its impacts, mainly, on the population of San Juan. However, these scathing reviews and articles fail to discuss Puerto Rico’s socio-economic crisis at a smaller scale, focusing on municipalities outside of San Juan. I sat down to talk to small business owners and workers to hear their stories and their opinions on the socio-economic situation faced by Arecibo. As in the case of this northwestern municipality, many others across the island have been enduring a drawn-out recession for the past twenty-five years. Shortsighted planning, irresponsible and corrupt municipal administrations, as well as foreign and commercial development, notably the gratuitous proliferation of shopping centers, have been the main cause for the decline of these municipalities.

In the 1950s, downtown Arecibo possessed many local, family-owned businesses and those that remain are now preemptively preparing to close their doors. Orriola, owner of a jewelry shop established by his father in 1957, says that inefficient city planning has hurt his fellow shopkeepers. He says that Expressway #22 diverts all traffic away from the downtown area and into the Plaza del Norte shopping center in Hatillo. Likewise, banks, post offices and municipal and district administrative offices have been removed from the downtown area: “If you want to cash a check, you’ll have to go elsewhere.” Papo, the owner of the local bakery, says that less traffic obviously means less business: “After four o’clock in the afternoon, the city is dead. There is nothing and nobody [left] here.” On weekends, he explains, business is incredibly slow and the clientele is mostly comprised of Sunday churchgoers. City planning has failed to provide space and easy access to these places of businesses, leaving the downtown area isolated and virtually abandoned.

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Big business, like Walgreens, Wal-Mart[1], Sears and shopping malls have dealt a deadly blow to the local economy. Business owners explained how malls offer better parking, facilities and unrivaled prices: “The IVU agrandado has been lethal [to the local economy]”, explained Enma who has been running her store for close to six decades. She explained that customers, now more than ever, are looking for cheaper prices and a highly discounted deals. Some shop owners, in my experience, have urged customers to pay by cash, instead of debit card, so to avoid the IVU. Enma, Orriola and Papo pride themselves in providing a quality service to customers, especially to fellow townspeople who have remained loyal. “My customers get love. That’s how I always treat them”, Enma confessed. The clerks at Orriola’s store greet every visitor by name as they walk in. Papo himself goes into great detail about training his bakers and prides himself in not using any additives, preservatives or harmful chemicals in the preparation of his product -the same way his father and grandfather taught him how to. “If things keep on like this, we will all have no choice but to close shop and leave,” he said, reminding me of how they are still outdone in profits by their competition.

 

Grocers and butchers face a similar problem as crops diminish island-wide and customers prefer cheaper, imported goods. Felo, a grocer at the Arecibo marketplace, remembers when Arecibo was an agricultural hub, but nowadays, he has to travel to the town of San Sebastián (a 1-hour drive, 26 miles) to buy products. Felo explained that this historic drought has been giving farmers a very hard time. The Ramirez family buys imported goods since they are cheaper and, as the amount of customers dwindles, they have needed to make significant cuts in their budget. Juan, the poulterer, drives to Aibonito (2-hour drive, 60 miles) to buy his meat and chicks. I asked Mr. Felo how this arrangement was working for him and if business had picked up: “Look…!”, he answered as he pointed to his empty store. Grocers and butchers explained that local supermarkets and retail stores (mainly Sam’s Club and Wal-Mart) are taking away their customers by offering imported, cheap products.

Arecibo has been known forever as a fishing town; however, fishermen seem to be the worst off amongst small business owners and merchants. I spoke to members of the Fishermen’s Association of Arecibo and they explained that their biggest challenges as far as production have been water pollution and the increasing scarcity of fish, without even factoring weather changes, crippling government regulations and foreign competition. When I spoke with them, they explained that they hadn’t gone out fishing in a month due to the high-pressure system bearing down from the north. The Islote Power Plant, the Water Treatment Plant and the Municipal Dump, all stationed around the Caño Tiburones National Reserve, have polluted their fishing grounds out at sea and in the river[2]. In order to find a good catch, these fishermen have travelled to Manatí and Vega Baja by sea (30 miles on rough waters) or driven out to Parguera (62 miles) and Culebra Island (95 miles) to fish. Moreover, some fishermen have spotted Chinese longliners fishing near the coast, sometimes as close as four miles. Customers don’t mind buying low quality products from supermarkets, especially Sam’s Club, for a cheaper price. Government subsidies are barely enough for these men to make a living, with fishing regulations severely restricting their practices. “Fishermen have no support”, explained a frustrated arecibeño: “In the past, you could make a living out of fishing”. They estimated that commercial fishing would be extinct by 2020.

 

In most of the interviews conducted, if not all, business owners and merchants complained that the municipal government has failed to protect local businesses. I sat down with the Vice-President of the Chamber of Economic and Industrial Development of Arecibo, Eduardo Moreda Cabán, in order to find out what this organization is doing for their fellow businesspeople. The Chamber is a non-profit organization founded in the 1990s with the task of representing businesses in the municipal government. “Back then, our fight was against big business. Now, we are unable to fight against them. Instead, we have to focus on tourism”, explained Moreda Cabán. Because of this, the Chamber has been working with the municipal corporation “Mi Arecibo, Inc.” and private investors[3], to fund and develop construction in Arecibo. With an increase in tourism as their ultimate goal and solution to the municipality’s economic problem, the Chamber and the municipality have been working to beautify and sell property to private investors. Guided by what seems like a reprise of trickle-down economics, the municipality is seeking to bring in foreign companies and investors in hopes that small businesses eventually thrive under tourist consumption.

The broad impact and the length of the Puerto Rican crisis hint at the systemic problem within the government and its sluggish bureaucracy, underscoring the island’s status as a colony. Arecibo has been enduring economic stagnation for at least the last quarter of a century, causing the slow but dramatic decay of its community. Across the island, big business contributes to this process by thwarting economic growth at a municipal and individual level, thus removing economic capital from the area. The central government is too weak to protect local businesses from American interests and development. My interview with the Chamber VP proved how disconnected this political mechanism and the municipal administration are from the everyday arecibeño. The municipality, corrupt and bankrupt, is seeking to enrich its constituents through the promotion of an underdeveloped tourism infrastructure and the seemingly empty promise of a long-lasting economic boon. After years of decay and stagnation, the Arecibo community has been almost left without the strength needed to organize themselves in order to meet these challenges. Accordingly, Enma told me “our voices aren’t being heard. We have to comply with whatever they decide”. That is the shared sentiment amongst Puerto Ricans, both in and beyond Arecibo.

Quick facts about Arecibo

Population: 100, 131 in 2000, and an estimate of 91,540 according to the US Census

Land size: 125.9 sq. miles

Per capita income: $8,867

Poverty line: 47.4%

Head of the District of Arecibo

Mayor: Carlos Molina

Municipal debt: $60 million

Notes.

[1] It should be noted that Puerto Rico has more Walgreens stores than anywhere else in the US and more Wal-marts per square mile that anywhere in the Planet. Cintrón Arbasetti, Cintrón. “Puerto Rico First in the World with Walgreens and Walmart per Square Mile.” Centro De Periodismo Investigativo. N.p., 7 May 2014. Web. 02 Aug. 2015. http://periodismoinvestigativo.com/2014/05/puerto-rico-first-in-the-world-with-walgreens-and-walmart-per-square-mile/.

[2] The EPA has investigated and fined the Arecibo municipality and private companies as a consequence of air, water, soil, human contamination and environmental irregularities. The EPA, however, is still deciding whether it will allow the construction of a trash incinerator (WTE) in Arecibo, even though it will certainly compromise air quality.

[3] José Gonzalez Freyre, owner of Pan American Grain is funding the construction of the Columbus Statue in Arecibo and other tourist attractions. CB Staff. “300-foot Columbus Statue Going up on PR Coast after Two-decade Odyssey.” Caribbean Business. N.p., 6 Apr. 2014. Web. 2 Aug. 2015. http://www.caribbeanbusinesspr.com/news/300-foot-columbus-statue-going-up-on-pr-coast-after-two-decade-odyssey-95570.html.

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Mario Mercado Diaz is a graduate student at Rutgers University.

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