Puerto Rico’s Bankruptcy Leaves US Island Facing Hard Times

Elodie Cuzin, Yahoo, June 6, 2017

Puerto Rican Flag

In San Juan, chants of “the debt is illegal” and “colonial dictatorship” fill the morning air, as students from the University of Puerto Rico block a palm-lined avenue.

Across the street, a board of overseers imposed by Washington is meeting with student representatives to hear their demands as they mull ever deeper cuts to pull this “Greece of the Caribbean” out of bankruptcy.

To some, it’s a necessary corrective to get a stumbling Puerto Rico back on its feet.

But to others like Mariana de Alba, a 27-year-old law student at the protest, it all smacks of colonial subjugation.

“What they’ve come to do is to cut back the public budget and the island’s public services to give it to the big bond holders, to pay off a debt that we don’t even know whether it is legitimate,” she says.

The Financial Oversight and Management Board for Puerto Rico — made up of seven members appointed by the US president and one by the island’s governor — is tasked with getting a handle on the territory’s crushing $74 billion debt.

But in an island proud of a cultural identity expressed in its language, food and music, the board is widely seen as having an intolerable stranglehold on Puerto Rican life.

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On Sunday, its inhabitants will vote on its relationship with the United States, in a non-binding referendum.

They can choose from three options — statehood, independence or another form of so-called “free association” or the status quo.

Even though Puerto Ricans are American citizens, they cannot vote in the US presidential elections.

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As unemployment rose and recession set in, Puerto Ricans left the island in droves. One in 10 Puerto Ricans emigrated over a 10-year period.

The exodus — a massive population shift that has left more Puerto Ricans in the United States than in Puerto Rico –aggravated the debt crisis by siphoning off the island’s tax base.

Unable to repay its creditors, Puerto Rico declared bankruptcy in early May.

The bankruptcy — the largest ever by a local US government — caused barely a ripple in the United States, but in Puerto Rico, it has fueled joblessness and protests.

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Governor Ricardo Rossello — who took office in January, and now lives in La Fortaleza, an imposing walled palace overlooking San Juan’s harbor — has presented an austere 10-year plan to rescue the economy.

But the 38-year-old governor was unable to persuade creditors to lower debt payments to a “sustainable level.” So he declared bankruptcy.

It’s now up to the US courts to resolve the matter.

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But relaunching the island’s economy is likely to be more difficult under US President Donald Trump, who is pushing for deep cuts in food assistance and medical insurance programs for the poor. And Trump has spoken out on several occasions against bailouts for Puerto Rico.

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