SAN JUAN, Puerto Rico (AP) — A federal control board overseeing Puerto Rico's finances amid a dire economic crisis announced Thursday that it appointed Ukraine's former finance minister as its executive director.
The board's chairman said Natalie Jaresko served during a critical time in Ukraine's history from 2014 to 2016 as it faced a deep recession.
"Ukraine's situation three years ago_like Puerto Rico's today_was near catastrophic, but she worked with stakeholders to bring needed reforms that restored confidence, economic vitality and reinvestment in the country and its citizens. That's exactly what Puerto Rico needs today," said chairman Jose Carrion.
He said Jaresko was born in Chicago to Ukrainian immigrants and was chosen out of a group more than 300 candidates during a four-month search. She previously worked in various economic positions at the U.S. State Department and also co-founded private equity fund manager Horizon Capital, where she served as CEO. As Ukraine's finance minister, she maintained a strong reputation with Western governments and investors and helped negotiate a deal to restructure the country's $15 billion debt after its economy contract by nearly 18 percent in the first quarter of 2015.
Jaresko said in a statement that she will pursue a decisive and successful recovery for Puerto Rico.
"I realize this goal may seem daunting if not impossible to many, but I accepted this position because I am optimistic we can achieve it together," she said.
Jaresko will be paid $625,000 a year, an amount Carrion acknowledged would likely cause an outcry on an island mired in a decade-long economic slump and seeking to restructure some $70 billion in public debt. He said Jaresko will commute from the Ukraine once a month until June, with all flights and hotel stays to be paid for by Puerto Rico's government.
Carrion said Jaresko will be responsible for ensuring that Puerto Rico achieves a balanced budget within four years and is granted re-entry into the capital market after credit rating agencies downgraded the island's debt to junk status.
"She dealt with an extremely challenging economic situation that is very, very similar to the situation she's confronting in Puerto Rico," Carrion told reporters during a conference call.
He said Jaresko also will make sure that federal funds slated for Puerto Rico are administered correctly: "We have a credibility problem in Washington," he said.
The board was created last year by U.S. Congress and recently approved a 10-year fiscal plan for Puerto Rico that contains numerous austerity measures.