The current drought and water rationing scenario in Puerto Rico demonstrates a lack of planning and foresight by those in charge. With only a 3 month supply of water in reserve, many municipalities are left with water 1/3 days. Of course, in the tourist areas, this policy doesn't apply.
The sad part is that with a little capital investment, the whole problem could be avoided. Yes, the carribean is experiencing its worst hurricane and rainfall drought in 9 years, but that doesn't excuse the island from only capturing 20% of rainwater. International reports indicate a strategically placed dam would alleviate the island of its water shortage problem. The project would cost upwards of 350 MM USD and obviously PR lacks the fuss to engage such a capital intensive project.
The Bad
It's official. Moodys has downgraded the island and labeled them as default on their obligations. Now what? More people are going to leave for th mainland. The tax base will continue to erode. The underground economy will continue to grow as a result of fewer industry level jobs. The government will be in a worse position to negotiate debt. The only answer is foreign direct investment, whether it be mainland US or elsewhere.
The Good
Tourism. Luckily the island is still flush with tourists. Real estate opportunities are increasing as people have to leave their homes and move to where the jobs are. Acquiring a distressed asset in Condado is my best bet. You can always rent it out to tourists of the rest of th island is a ghost town.
