Remarks to Chamber of Commerce

June 4, 2015
Nicholas Prouty

President Izquierdo, Members of the Chamber, and distinguished guests. I am

humbled to stand before the leadership of Puerto Ricos private sector.
I usually tend to speak to offshore investors and try to convince them to
relocate their operations to Puerto Rico so it was particularly gratifying to
receive an invitation to speak to you given that I brag about your talents all
the time.
My family and I moved here at a time of great fiscal uncertainty and as a serial
entrepreneur, I know what it is like to be down: you have your great days as
well as your dark days,
But I have always believed that when adversity strikes you must remember the
following words:
That greatness comes not when things go your way but only when you are really
tested when you take some knocks, some disappointments, when sadness
comes, because only if you have been in the deepest valley can you ever know
how magnificent it is to be on the highest mountain.
Anyone recognize that quote? If you did not, it came from Richard Nixons
farewell address on August 9, 1974, arguably a pretty tough day in his life not to
mention the nations.
We are definitely in the valley but I see the mountain top. We must re-imagine
Puerto Rico; rebuild it, shape it into a form that allows our people to compete
magnificently in the knowledge based economy. We must develop businesses
that play upon our greatest strengths. Concurrently we need to bring in as much
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outside capital as possible equity capitalno more debt. We have already

mortgaged our great grandchildrens future.
So what makes me such a passionate believer in Puerto Rico? What makes me
look past the headlines and see what I think what John Paulson thinks could
be one of the great economies of all time?
Perhaps it takes people coming from outside to see possibilities others do not
I remember being at a dinner party in Paris and listening to a group of great
thinkers discuss the United States economy. I was floored by their sensitivity
and insight and quickly came to the conclusion that I had lost site of the forest
through the trees that my pre-conceived notions had blinded me to the
possibilities.
This is the Moment of Puerto Rico, and I believe Puerto Rico will not only
successfully emerge from its current situation but that it will thrive that it will
become one of the world's most iconic places to visit, live, and work.
That is why I said yes to this speaking engagement because the audience is
you, a gathering of local executives, entrepreneurs and investors, looking to
invest in the emerging sectors that will drive the island's future economy.
Law 22 residents are moving here, investing capital and beginning to spend
money in the local economy, and although I would like to see this group become
even more engaged to be the new venture capital providers to our tech
startups to be the benefactors of our museums and performing arts centers
to endow surgical suites in our hospitals we all need to allow this program to
work perhaps in the future the program could be amended to require grantees
to make local investments or to raise the rate a bit, but for the time being I
think we should all allow the Department of Economic Development to have the
tools it needs to bring in as many of these people as we possibly can.

But it is you, my friends, who have been here longer you are born and bred
boricuas, you have invested your entire life on the island, and as others have
fled, you have stayed, with an unwavering commitment betting on the future
of Puerto Rico -- a future you will shape.
You're like Don Chago in La Carreta his whole family moves to New York, and
yet he stays put, glued to the land he loves. Don Chago deserves our honor and
respect.
Because like him, your soul still rises at the thought of that new and amazing
Puerto Rico the prospect of being part of the magnificent recovery you see
right on the horizon.
That is why you're here today you are here to explore investment
opportunities in the emerging sectors.
You have committed. You want to be part of that future, inside the ring, and I
want to recognize you today for your vision, for your valor.
You are the agent of change and the engine of hope, you will make the
difference for your children and for the people of Puerto Rico. And I want you to
know that I stand shoulder to shoulder with you in this fight. Those are not just
words, I have invested hundreds of millions of dollars because I believe in you.
So how do we get there? Sometimes it can seem daunting. Sometimes even I
read Barrons and say to myself: what am I doing here?
But let me tell you a quick story. In early December, I received a call from
President Clinton inviting me to join him in Miami to celebrate the 20th
Anniversary of The Summit of the Americas.

The First Summit was held in 1994 and was historic for many reasons. First: It
was attended by the Presidents of over 34 nations in what at that point was the
greatest assemblage of hemispheric leadership ever gathered.
Second: Never before had an American President taken the time to organize
such an event and to create an agenda that specifically addressed the key issues
confronting the region.
And third: Never before had an American President showed that degree of
interest or frankly that degree of respect to his southern neighbors.
The tangible outcome of the event was the creation of a document called the
Declaration of Principles which established a pact for development and
prosperity based on the preservation and strengthening of democracies in the
Americas.
From an intangible perspective, the summit was even more powerful in that the
traditional east/west paradigm was challenged by a new North/South dynamic.
I had the opportunity to spend time with President Santos of Colombia. The
President was keenly aware of the economic challenges we confront in Puerto
Rico.
He told me that Puerto Rico had everything it needed to be a powerhouse.
He was aware of our great intellectual tradition, our sweetness of nature and of
our creativity. He wanted me to relay the message that if Colombia could turn
itself around in just a few short years so to could Puerto Rico. He added
however, that for that to happen, traditional infighting would have to stop and
Puerto Ricans would have to start thinking of themselves as brothers and sisters
and not pawns in a political game.
So you are here today not just to attend the annual meeting of the Chamber of
Commerce

No, you are here today to bear witness to hope to bear witness to a brighter
future you are here because you embrace a sacred belief: that Puerto Ricos
best days her very best days are yet to come.
I know the challenges seem overwhelming, but I also know that it is darkest
before dawn.
What we are going through today is exactly what New York City went through in
the mid-1970s and the solutions to New Yorks woes were simple. Reign in
government spending, reorganize the debt, privatize failed agencies and cut red
tape from government. It is that simple and dont let anyone convince you
otherwise.
Puerto Rico is now my home it is where I live with my wife and daughter it is
where we laugh, it is where we do homework it is where we dream it is
where my daughters fondest memories will be created.
Maybe that is the reason I fly through the night to meet with companies who
want to invest in Puerto Rico maybe it is because there are so many
misconceptions that need to be addressed maybe it is because I want
everyone to know what I know that Puerto Rico is magical.
I was asked by Pepe and his team to frame your search for those opportunities
in the context of the island's business climate.
But let me tell you something: We can no longer have that conversation, or any
conversation in Puerto Rico, without placing at the very heart of that reflection,
an honest and blunt discussion of who we are as a people.
Who is that person we call puertorriqueo? What is the core purpose that
moves him? What gets her up in the morning?
The answer to these questions, takes us to the very essence of our business
climate and straight to the action agenda we must execute.
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The great Puerto Rican poets, songwriters and novelists have spoken of this for
ages. But in my research, I have not found any who has effectively connected
the dots and looped this fundamental nature back to the island's economic
model.
But before we dive into that, allow me a moment to dispel some misguided
thinking.
The fiscal crisis does not prohibit investment. It makes our job more difficult,
but with risk comes greater reward. I believe everyone will look back upon this
moment and kick themselves for not investing more.
Second, we HAVE an economic model. Stop talking and acting as if we don't.
Because we do. The problem is that we are too skeptical and fail to embrace the
model and rally behind it.
Third, and hear me out on this thought before passing judgement. We do not
need a change in status to stimulate the economy. Puerto Rico has been using
its fiscal autonomy to offer incentives for decades, under both parties. Today is
no different.
It is to everyone's benefit for Puerto Rico to prosper whether you are an
Estado librista, estadista or an independentista, the more prosperous the island
becomes, the better it will be for EVERY status option later on.
I was recently asked how I define success, and my answer was simple. Success
gives you options. We need to be successful in order for our fellow countrymen
to pursue every possible status option.
Status is far more an issue of justice and democracy than it is of poverty and
prosperity.
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So now that I have offended everyone, let me continue.

The new model must be based on who we are as a people.
Because no matter who you are in Puerto Rico -- whether you are from the city
or el campo, whether you hold a Ph.D. or have no formal education at all,
whether you are corporate bosses or rank-and-file workers, rich or poor, male
or female, young or old, famous or anonymous -- no matter who you are in
Puerto Rico, you tend to share some basic traits as a people.
These are the traits that explain not only what you love most, but also what
outsiders love most about you -- what people tend to say when they visit Puerto
Rico, what Corporate executives tend to highlight.
Your essence, in other words, IS your big competitive advantage.
Is it surprising that Germans dominate the world of high precision
manufacturing given their exacting nature? Or that the glamorous French
basically own the high end luxury products vertical? Or that Chinese given their
low labor costs are the world's largest manufacturers of inexpensive items? All
those countries identified their core essence and played on their strengths. We
must do the same.
And, unless we are clear about what Puerto Ricans love and are really good,
defining an investment climate and agreeing on a path forward will remain an
exercise in frustration.
So at the risk of overgeneralizing or simplifying, and in the interest of sparking a
broader discussion, let me tell you how I see it.
There are four primary traits that stand out most, and they are all beautiful and
powerful at the same time and reinforce one another, and I mention them here
in no particular order.
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One is humility. You are humble. Perhaps it is the Tano and the Catholic in you,
all wrapped up into one.
You don't showboat or brag. Your ego is generally in check. And when one of
you gets out of hand, the overwhelming social and peer pressure pulls you back
down to earth.
You know that genuine smile, the eyes that disarm on sight, the look of sublime
sweetness on your face?
It is a deep-seeded trait captured by poets across time, from Gautier Benitez in
the 1850s to Santos Febres today.
In his excellent book on Tano society, Francisco Moscoso traces the very root of
your humility several hundred years before the arrival of the conquistadors.
A second and related characteristic is community. Puerto Ricans live and work in
clans. It is what you love most. You live for family and community, to be there
when you are needed, to help and serve others, or just to hang out.
It makes you so hospitable, so welcoming to strangers. You are willing to bring
others into your circle of friends. So open, so inviting.
And that brings me to a third defining characteristic: joy. You are the happiest
people I have ever seen.
I have never seen a place with so many parties going on at the same time. In
restaurants, at school, even in funeral parlors -- wherever there are Puerto
Ricans gathered, there are Puerto Ricans laughing and singing and having a good
time.

Spontaneous conversations among strangers break out in elevators,

supermarket lines and buses. It is wonderful, it is contagious, and it is the best
thing that has ever happened to this uptight New Englander.
The final characteristic -- creativity. You are among the most creative people on
the planet.
For 3.6 million people inhabiting a 35 by 100 mile island, you are bursting with
creativity.
So there you have it. Humility. Community. Joy. Creativity.
It does not take a genius to see how these come together to turn Puerto Rico
into one of the very best places to visit as a tourist, to move to as a resident, to
study as a student, or to set up a company to export.
For you in this room, it is a roadmap that provides exciting opportunities. For
example, we have some of the greatest ABA accredited law schools in the world
and because of the low cost of education, the Inter American University is
implementing a JD program in English. Young attorneys will now be able to
graduate with manageable student debt loads as opposed to $200,000 in the
continental United States.
We have some of the greatest doctors in the world and we ought to be fully
engaged in medical tourism. Medical treatment is significantly lower here. This
one is a no brainer. The infrastructure is already built.
We have to stop doubting and start acting.
Stop insisting on the return of an economy fueled by big government,
construction, manufacturing and the old traditional consumer economy, and
start engaging deeply and smartly in the new economy fueled by this new
generation of big capital from abroad, centered increasingly on the island's cool
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neighborhoods, all based on and driven by that beautiful, powerful core essence
that makes us who we are as boricuas.
Because that which makes you humble, communal, joyful and creative, also
makes you an amazing place to visit, an amazing workforce to hire, amazing
local partners for any 22er or foreign company -- simply, an amazing market
that is headed straight to stardom, with a singularly powerful place in the global
economy.
You are El Josco, the proud bull in the story by Diaz Alfaro, who found strength
in his race, stood tall for all that was Puerto Rican, and through it all, through
the hardships remained firm to his core essence.
Because that's what the core does: it stays strong, it refuses to weaken, it
defines who you are, and looking ahead to the coming decade and beyond, it
will be the very core of your success. Of our success.
Thank you so much it has been an honor to stand before the business leaders of
Puerto Rico.

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