Updated 03:11 PM EST, Mon, Jan 18, 2021

Puerto Rican Government Seeking to Attract Wealthy Investors Amid Economic Crisis

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Puerto Rico's economic crisis now has the government trying to talk wealthy investors into putting money into their country.

In a report from The Associated Press, officials promoted local tax incentives during the investors meeting on Thursday in a move to lure the wealthy into putting their businesses in the US Territory.

Speakers at the meeting included former New York City Mayor Rudy Giuliani and New York hedge fund billionaire Joh Paulson, who already bought some of the mist upscale resorts on the island to help with its economic slump. However, Paulson did note that to encourage more investment, the island itself should improve its fiscal situation.

Paulson is not the only billionaire to invest in the island, but critics still question the amount of jobs created by the people who put up businesses, questioning how much of a boost they actually have in the economy. Bloomberg Business noted that Belle Haven Investments, which oversees about $3.9 billion of Puerto Rican bonds and securities, is not confident about the government's proposals either. Matt Dalton, the chief executive officer said, "Without Congress passing a bill, all these proposals are worthless."

The Washington Post reported that Susheel Kirpalani, a partner at Quinn Emanuel Urquhart & Sullivan, and representing investors said, "Rather than be just another creditor group that's whining and complaining and saying -- 'we don't like, we won't give, we won't do,' -- we're trying to meet the commonwealth where they are."

Nader Tavakoli, CEO of Ambac, recently filed a lawsuit against the Puerto Rican government, saying that they shifted funds to meet their bond payments amid the difficulty.

However, Puerto Rican governor Alejandro Garcia Padilla said that the government is still trying to resolve their crisis, emphasizing the need for restructuring. He said, "Despite whatever you may have heard about doing business in Puerto Rico, our commitment to the costs of utilities will be the last of your concerns."

While there are a lot of concerns, there are also a few investors who are not bothered about Puerto Rico's economic crisis. Head fund manager Michael Tennenbaum, who recently moved to Puerto Rico from LA, said that citizens protesting and accusing the government of giving preferential treatment to wealthy investors have a point to their protest, but he thinks the island's default on their debt may be a good thing. He told investors at the meeting that "One of the reasons I came here is because I thought you'd hit bottom. When you run out of cash, I think that brings change."

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