[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 17 February 2005, 11:38 GMT
Puerto Rico's Viagra town
By Matt Wells
BBC News, Puerto Rico

On the surface, the US' Spanish-speaking island territory of Puerto Rico is the envy of the Hispanic world, with an economy that outshines any of its Caribbean neighbours.

Barceloneta's new shopping mall
A boom in foreign investment has changed the face of Barceloneta

Thanks to its unusual status as a US self-governing commonwealth, the island's four million residents elect their own government, while enjoying most of the economic benefits of being American.

Puerto Rico's currency is the US dollar; its citizens are entitled to US passports, but they do not pay most federal taxes. Thanks to long and historic ties to cities like New York, many are bilingual and feel as assimilated as they want to be with the US mainland.

But when it comes to the economy, it is clear that the real power to shape Puerto Rico's future often lies in the hands of multinational corporations and the US Treasury.

Barceloneta is a coastal town of just over 20,000 residents - about 40 minutes drive west of the capital San Juan. Twenty years ago it was best known for the juiciness of its pineapples, but now it is a pharmaceutical hub, and home to America's only factory making Viagra - Pfizer's impotence drug.

'Hi-tech community'

Taking the turning for Barceloneta it is clear from the skyline that things are booming. Apart from the landscaped factories, the town's colourful and gleaming shopping mall - which opened five years ago - stands out against the rich green of tropical forest on the horizon.

Bafceloneta's mayor Lisandro Reyes
We're bringing some happiness around the world for couples who enjoy Viagra as a means of getting their love life in order
Lisandro Reyes
Barceloneta deputy mayor

Walk into the huge restaurant area at lunchtime, and you find hundreds of well-heeled employees from the four multinational companies that have a base in the town.

"The good thing about having so many pharmaceutical companies on the same site is that we're a high-technology community here," said one Pfizer chemical engineer.

She was keen to steer conversation away from the little blue Viagra pills which have replaced pineapples as the town's best known export, but admitted that when she mentioned her employer's name, friends would smile and ask about the sex drug.

Pfizer's most vocal advocates in the town can be found in the mayor's office. I drove up to the gates of their plant on the outskirts of Barceloneta, in a shiny pick-up belonging to the deputy-mayor, Lisandro Reyes. He pointed out two new schools and row after row of new housing lining the route.

"Pfizer is a great partner here in Barceloneta. We're proud of all the drugs made here, including Viagra," he said.

"It's a resource for the elderly, or the young. We're bringing some happiness around the world for couples who enjoy Viagra as a means of getting their love life in order," he added with a grin.

The other Fortune 500 firms with plants here include Bristol-Meyers Squibb, Merck Sharp & Dome and Abbott Laboratories - making up a specialist workforce of around 8,000 people.

These firms located here thanks to tax incentives and duty-free access to the US market. Puerto Rico's import and export figures have doubled since the late 1980s, and the economy has transformed from agricultural to industrial in a generation.

Economic fears

But without any substantial natural resources of its own, the island depends on the business and investment it can attract from the mainland.

More than 90% of its exports go there, and many economists worry that beyond growth areas like Barceloneta sustainable development is not being encouraged enough.

The influential Caribbean Business journal sounded a terse warning last week:

"Slow economic growth, low personal income, inability to create jobs in the formal economy, a greying population, a growing fiscal deficit, high public debt-burden per capita, and huge government subsidies, further aggravate the issues that are plaguing the economy."

Downtown Barceloneta
Downtown Barceloneta shows a different face of the town

Pfizer's local-born vice president for manufacturing in Puerto Rico, Carlos del Rio, said he was proud the company had helped to forge a "middle class" in the Barceloneta area, creating around three jobs in the community for each job at the company.

Directly and indirectly, they have helped fund Barceloneta's entire infrastructure, from the fire department to a state-of-the-art sewage treatment facility.

The company's contributes around $12m to the town's annual budget.


While most people I spoke to were glad of the cash influx, which is about to manifest itself further with the widening of the town's high street, there were some sceptics.

Ivan Arocho, who runs one of the town centre's many pharmacies is one: "We make pennies, they make money," he said with a sigh. He's been in the town for more than 20 years, and liked it better in the old days, before the factories came.

"It's made jobs, but there's lots of air contamination. A lot of people complain," he added.

Mr Reyes says strict federal laws on emissions provide adequate safeguards for the environment.

A Viagra slogan in a restaurant
"With Viagra and tequila, grandma is happy," reads a restaurant slogan

A greater threat to the town's economic growth comes in the form of the macro-economic uncertainties that lie ahead. Mr Reyes said he was confident that attractive tax incentives and investment deals would help to deepen development for decades to come, but local executives cannot make guarantees.

"It's always being looked at. Puerto Rico is very competitive. We've tried to continually invest in our plants," said Mr del Rio, addressing the possibility that the corporate headquarters might make the decision to move on at any time, to keep costs low.

Viagra's patent will expire in a few years' time, and all the plant can do is continue to perform successfully.

"We're in a competitive environment, so the answer to all that is that our job is to try to remain as competitive as possible."

Regions and territories: Puerto Rico
07 Jan 05 |  Country profiles
Timeline: Puerto Rico
29 Dec 04 |  Country profiles
Ruling party wins in Puerto Rico
24 Dec 04 |  Americas
Patents set to hit Pfizer profits
20 Oct 04 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific