Sunday, September 24, 2017

The Impact of Hurricane Maria on Puerto Rico and the Global Economy

After Hurricane Maria barreled through the Caribbean Islands, it left the island of Puerto Rico devastated. Some 3.5 million of the world's population live on the island, and according to the BLS, this small islands accounts for about $20 billion in exports each year. This most recent hurricane to pass through the island knocked out Puerto Rico's entire power grid along with a lot of their infrastructure. Recent estimates of the damage have left the island without electricity for months. This will hamper their productivity and heavily reduce their net exports.

The island of Puerto Rico has export an estimated $20 billion, accounting for a large part of their economy. Pharmaceuticals and medicine manufacturing play a big role in their economy, accounting for between 60%-70% of their exports. The largest rum distillery in the world, Bacardi's "Casa Bacardi", is also located in San Juan, Puerto Rico. This distillery produces around 100,000 salons of rum in a day. These industries will potentially have trouble operating at full capacity until they have recovered from the storm. This could cause a shortage of their primary exports such as pharmaceuticals, medicines and rum, temporarily driving prices up to account for the current quantity.

https://www.nytimes.com/2017/09/22/us/hurricane-maria-puerto-rico-power.html

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