The history of the GDB is intertwined with that of Puerto Rico and its socioeconomic development. The following is a summary of GDB’s evolution within the context of the historic events of the last decades.
THE GDB: SEVEN DECADES OF SERVICE TO PUERTO RICO (1942-2012)
The Government Development Bank for Puerto Rico (GDB) has played a central role in the island’s economic and social development since its creation in 1942, contributing to Puerto Rico’s transformation from an economy based on agricultural products to a thriving modern industrial and services oriented society.
As Puerto Rico has evolved, so has GDB, adapting itself time after time to meet the island’s most pressing economic and social problems. Through its history, the Bank has proven to be a dynamic institution, with the flexibility and creativity required to generate alternative solutions to the island’s ever-changing needs.
During the early years, the Bank intervened directly in Puerto Rico’s development investing in projects that were needed to get the economy moving but which private investors found too risky. In its later years, GDB has emerged as a promoter and facilitator, helping to create a favorable environment for private sector investments that will generate economic growth.
The Bank has been the catalytic agent in Puerto Rico’s transformation from an agrarian framework into an economy that is competitive in multiple and diverse areas. From promoting, during a specific time in history, an ‘entrepreneur government,’ it came to understand that the government’s role should be more that of a facilitator of processes for private enterprise.
Act 252 of May 13, 1942 of the Puerto Rico Legislative Assembly created GDB for the purpose of attaining "the complete development of the human and economic resources of Puerto Rico.” But the Bank would not acquire its final form until the enactment of Act 272 of May 15, 1945, which authorized it to act as fiscal agent and financial advisor of the central government and its agencies; and Act 17 of September 23, 1948, which includes the Charter of the Bank and established all of its duties and powers.
Initially, GDB was little more than a section of the Puerto Rico Department of Treasury with a mere handful of employees. Today (2011), the Bank is one of the island’s most important and prestigious institutions, with total assets of $13.4 billion and 404 employees.
As now constituted, the Bank’s primary functions are to act as a fiscal agent and financial advisor for the Commonwealth and its agencies and to provide financing mechanisms to both public entities and private enterprises in order to boost the island’s economic development. Throughout its history the Bank has undertaken ventures that go well beyond the boundaries we normally identify with banking institutions. When circumstances require it, the Bank has pioneered in breaking new ground to advance Puerto Rico’s economic and social development.
Undoubtedly, GDB has been one of the engines of our economic development. It financed the first efforts of our government to promote industrialization, the first restorations, the first condominiums, the first office buildings, the first hotels, and the first bond issues of our public corporations and municipalities. It has contributed to the creation of job opportunities for our families. And as a fiscal agent, it has been instrumental in the task of providing our country with the infrastructure required to facilitate our economic development.