Economic empowerment solves.

C. Economic Empowerment Zones The Territories and their advocates should seek to have Congress temporarily designate each of the Territories as a special economic empowerment zone for a period of ten years. This would create a slate of economic incentives across multiple federal agencies, ideally designed to respond to the unique strengths and weaknesses of each Territory, to help stimulate the economies of the Territories. Similar to the extended temporary waivers of the Jones Act and most-favored state appropriations, this temporary designation can bring significant near-term economic relief and stimulus for the Territories while the larger issues about political status and political power are being deliberated by various stakeholders. In general, economic empowerment zone designations and their accompanying programs are designed to encourage investment activity and business development in economically distressed communities through a combination of favorable tax laws, grants, subsidies, jobs programs, regulatory easing, and other economic incentives. In the past, Congress and various States have used such programs to help improve rural and urban communities. For instance, some of the most economically developed portions of present-day Baltimore, Maryland, and Harlem, New York, were due in part to economic empowerment zone programs. Some of these programs have had remarkable successes following implementation, while others have been less fruitful. That said, it is often difficult to establish a clear causal link between the empowerment zone programs and their economic effects, as is the case with many economic incentive programs. Historically, empowerment zone programs have had bipartisan political support, thus making them a more politically feasible idea. Both Democrats and Republicans have found some appeal in using government incentives and deregulation to stimulate market-oriented, localized community economic development. The most prominent federal and state empowerment zone programs found their origins in the 1980s under the Reagan administration and the 1990s under the Clinton administration. More recently, as part of the Tax Cuts and Jobs Act of 2017, areas of each of the Territories were designated as “qualified opportunity zones,” entitled to certain tax incentives and benefits intended to spur investments. As proposed herein, each of the Territories would be designated a special economic empowerment zone for a period of ten years. This designation would help attract investment and business activity to the Territories, each of which has had stagnant growth and higher unemployment rates compared to national figures over the last decade. Ideally, the designating legislation and accompanying programs would be designed with the input of key stakeholders from the Territories who are most knowledgeable about each Territory’s strengths and needs. If designed properly, economic empowerment zone programs coupled with smart local efforts would help foster near-term economic growth in the Territories, create local job opportunities, improve the daily lives of the people living there, and decrease each Territory’s reliance on uncertain funds from the federal government. For instance, in the aftermath of two catastrophic hurricanes in 2017, the government of Puerto Rico has made modest efforts to attract entrepreneurs and investors in businesses related to filmmaking, financial technology, and cannabis to the island. While the efficacy of these modest local efforts remains to be seen, additional incentives provided via a special federal economic empowerment zone designation could make the island more attractive to entrepreneurs from the American mainland and around the world in the near term. In addition to helping the Territories, these programs can create “new markets” for businesses, entrepreneurs, and investors from the mainland. Such programs for each of the Territories may be particularly appealing because they are nimble enough to aid each Territory according to their own specific strengths and needs; the programs are ultimately localized and market-oriented in their design, implementation, and effects to attract a wide and diverse population of investors with different investment preferences and outlooks. While businesses have become more socially conscious and more willing to engage with distressed communities to enhance social and business value, economic incentives nonetheless play a significant role in attracting large, long-term private investments in the first place. Understandably, the Territories may be reluctant to rely on federal, market-oriented incentive programs following the harrowing experience of Puerto Rico with the enactment and subsequent repeal of the section 936 tax incentive. While this type of skepticism and reticence is warranted, policymakers in both Washington and the Territories will have the benefit of learning from Puerto Rico’s previous experience (and hopefully will make better decisions to avoid similar pitfalls). However, even if similar mistakes are made with the economic empowerment zone programs, the near-term positive impact would likely outweigh the long-term uncertainties associated with such programs, especially since the Territories are all in need of some economic stimulus in the immediate and near future. None of the three new pathways proposed here will solve all or even most of the complex and diverse set of problems confronting the Territories, collectively or individually, including complex, deep-seated issues involving the indigenous people of the Territories. Furthermore, drafting, passing, implementing, and executing these three new proposals may prove difficult. Nevertheless, these proposals offer a pragmatic trio of politically feasible policies to bring about immediate benefits to the people of the Territories while progress is being made on the longstanding, larger political issues. These proposals can hopefully move the conversations and plans of action beyond the well-traveled, but unsuccessful, paths of the past towards a more promising direction of real, tangible progress for the Territories.