Operation Bootstrap
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Operation Bootstrap ("Operación Manos a la Obra") is the name given to the ambitious projects which industrialized Puerto Rico in the mid-20th century. Teodoro Moscoso is referred to as the architect of Operation Bootstrap. Under this program, which began in 1948, the island became increasingly industrialized. Envisioning that a densely populated island like Puerto Rico with now over 1000 persons per square mile, could not subsist on an agrarian system, the government Departamento de Fomento encouraged the establishment of factories. Puerto Rico enticed US companies by providing labor at costs below those on the mainland, access to US markets without import duties, and profits that could enter the country free from federal taxation. Fomento invited investment of external capital, importing the raw materials, and exporting the finished products to the U.S. market. To entice participation, tax exemptions and differential rental rates were offered for industrial facilities. As a result, Puerto Rico's economy shifted labor from agriculture to manufacturing and tourism. The manufacturing sector has shifted from the original labor-intensive industries, such as the manufacturing of food, tobacco, leather, and apparel products, to more capital-intensive industries, such as pharmaceuticals, chemicals, machinery, and electronics.
Through this project, a rural agricultural society was transformed into an industrial working class. Although initially touted as an economic miracle, by the 1960s, Operation Bootstrap was increasingly hampered by a growing unemployment problem . As living standards and wages rose, manpower-intensive industries faced competition from outside the United States.
