Puerto Rico and Recurring Hurricanes

Author: John R. Mousseau, CFA and Alex J. Pollock, Post Date: November 17, 2017
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Last Monday, November 6th, I was privileged to serve on a panel discussion at the American Enterprise Institute in Washington DC, where the topic was Puerto Rico after Hurricane Maria. The discussion covered a wide range in topics that included the damage to Puerto Rico as well as issues of finance, law, and markets.   The proposed solutions to the problems ranged from a Marshall Plan-type of approach to direct Federal oversight.  Included in the discussion were the social issues that are also affecting Puerto Rico and in some cases are obstacles to progress.  The link to see this panel discussion is here:

http://www.cumber.com/john-mousseau-panelist-at-american-enterprise-institute-puerto-rico-discussion/

One of the panelists at AEI was Alex Pollock. Alex is a distinguished fellow at the Washington-based R Street Institute, where he provides thoughts and policy leadership on financial issues.  Here is the link to his bio:

http://www.rstreet.org/people/alex-j-pollock/

Alex has written a terrific piece on the meteorological conditions that affect Puerto Rico, and hurricanes in particular. His analysis has implications for the rebuilding of Puerto Rico near-term, as well as longer term-implications on issues running from federal intervention to possible future statehood.  With Alex’s permission we present it here.

John R. Mousseau, CFA
Executive Vice President & Director of Fixed Income
Email | Bio

 


Puerto Rico has a long history of many disastrous hurricanes, as once again this year with the devastating Hurricane Maria.  These disasters recur frequently, historically speaking, in an island located “in the heart of hurricane territory.”   Some notable examples follow, along with descriptions excerpted from various accounts of them.

-In 1867, “Hurricane San Narciso devastated the island.”  (Before reaching Puerto Rico, it caused “600 deaths by drowning and 50 ships sunk” in St. Thomas.)

-In 1899, Hurricane San Ciriaco “leveled the island” and killed 3,369 people, including 1,294 drowned.

-In 1928, “Hurricane San Felipe…devastated the island”–“the loss caused by the San Filipe hurricane was incredible.  Hundreds of thousands of homes were destroyed.  Towns near the eye of the storm were leveled,” with “catastrophic destruction all around Puerto Rico.”

-In 1932, Hurricane San Ciprian “caused the death of hundreds of people”—“damage was extensive all across the island” and “many of the deaths were caused by the collapse of buildings or flying debris.”

-In 1970, Tropical Depression Fifteen dumped an amazing 41.7 inches of rain on Puerto Rico, setting the record for the wettest tropical cyclone in its history.

-In 1989, Hurricane Hugo caused “terrible damage.  Banana and coffee crops were obliterated and tens of thousands of homes were destroyed.”

-In 1998 came Hurricane Georges–“its path across the entirety of the island and its torrential rainfall made it one of the worst natural disasters in Puerto Rico’s history”—“Three-quarters of the island lost potable water”– “Nearly the entire electric grid failed”—“28,005 houses were completely destroyed.”

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