Puerto Rico Economic Outlook. Long permitting processes and a dilapidated and expensive electrical grid, which collapsed during the hurricane, are among the many factors that have caused investors to shy away. Puerto Rico is now shrinking at a 6% annual pace, and that number is probably going to get worse before it gets better. Puerto Rico’s problems are large and interdependent, which makes solving them a complex and difficult task. Puerto Rico faces a severe fiscal crisis, but this is merely a symptom of Puerto Rico’s primary disease: a lack of economic growth. Kudos, then, to Gabriel Sterling, a GOP election official in Georgia who at an anguished presser ripped Trump's incitement and his toadies' complicity. A few months after Hurricane Maria, Puerto Rico’s government proposed significant changesto the fiscal plan put in place in 2017 by the federally appointed financial management board that has run Puerto Rico’s economy since its bankruptcy. Because of people like you, another world is possible. Second, the 2017 post-Hurricane Maria devastation and lack-luster recovery efforts under Republican President Donald Trump and the equally complicit Governor Rosselló eventually resulted in at least 2,950 casualties, as per a George Washington University study, or more according to other reports. Puerto Rico's massive government bureaucracy and regulatory structure have been repeatedly cited as barriers to investments and growth. "Fortunately for Puerto Rico that process is in place.". "There’s no way for Puerto Rico to be able to rebuild, let alone recover, unless the debt is canceled," said Eric LeCompte, executive director of Jubilee USA Network, a religious coalition that's fighting for Puerto Rico debt relief. Levels of debt in Puerto Rico became untenable, as the tax advantages of holding Puerto Rico's bonds expired, and Hurricane Maria wreaked additional havoc on the island's floundering … Common Dreams is not your normal news site. San Juan, Puerto Rico/USA in July 2019 (Photo: © Osvaldo Olmos / Shutterstock). The Supreme Court declared the swearing-in of Pierluisi unconstitutional since he had not been confirmed by both chambers of the Puerto Rico legislature, as required by the island’s constitution. We need you. Yet Vázquez is sitting under a cloud of suspicion as well because of her clashes with various feminist groups over women’s rights, her own history of alleged corrupt activities, numerous fund mismanagements post-Hurricane Maria and her long-term strained relationship with Rivera Schatz. In September 2017, these economic problems worsened with the devastating impact of Hurricane Maria, which will require extensive rebuilding. First, the so-called PROMESA Act of 2016, the anti-democratic austerity measure signed by Democratic President Barack Obama to oversee Puerto Rico’s debt crisis, basically dictates what the US territorial government can and cannot do. Thousands of Puerto Ricans have been forced to leave Puerto Rico … The review shows that most Americans — this author would include those US citizens in Puerto Rico — have lost “confidence in the functioning of public institutions.” Mistrust in US political institutions extends to not only Congress and President Donald Trump, but also to the federal agencies responsible for post-hurricane recovery efforts. Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey. Please help keep Common Dreams alive by making a contribution. "This would increase the migration from the island and generate growing risks of protests and looting.". A Puerto Rican default would be the largest in the history … The protests come after decades of complaints of … Expanding on that argument, Meacham posits that the government-debt crisis … Puerto Rico's debt should be wiped out. Puerto Rico is expected to receive $13 billion in Covid-related federal funds, according to the Financial Oversight and Management Board, the agency that has managed Puerto Rico’s finances … This fact alone should place doubts on the minds of those who maintain the position that the US is a democratic state. "This all has to stop," he raged. Puerto Ricans struggle in aftermath of Hurricane Maria. In other words, Puerto Rico’s social and political problems are rooted in the territorial government’s dependency on the economic policies of the US federal government. - Craig Brown, Co-founder. Puerto Rico, which filed for the equivalent of federal bankruptcy protection in May, owes $74 billion in debts and more than $53 billion in unfunded pensions. Biden Could Cancel Student Debt. Common DreamsP.O. Chapter 5 provides policy and historical background about Puerto Rico… Thank you. Rosselló’s actions are similar to the kinds of insalubrious and hateful mocking President Trump has engaged in for years over social media. The net result was to leave the majority of people in Puerto Rico without a hopeful future, and that was all before Hurricane Maria hit our shores.”. Thus, the recent resignation of Governor Rosselló based on his corrupt and degenerate behavior — as exposed by the leaked Telegram chats — should be understood within the larger framework of a flawed US democratic state that continues its economic stranglehold over Puerto Rico. Although Trump's proposal to slash all of Puerto Rico's liabilities may not be financially or politically realistic, it's increasingly likely that financiers and individuals who lent money to Puerto Rico will suffer huge losses as political momentum mounts for action. There are at least two reasons Puerto Rico’s political problems persist. "The challenges of generating economic growth and resolving Puerto Rico's debt problems will worsen if the federal government does not approve a major reconstruction package," IHS Markit analysts Paula Diosquez-Rice and Carlos Cardenas said Monday in a research note. History. As this author previously argued, the policy response of the Trump administration after Maria hit was wrongheaded, and the Federal Emergency Management Agency (FEMA) efforts were ineffective at the time. As Nelson A. Denis recently reported, two “University of Puerto Rico economists found that the Jones Act caused a $17 billion loss to the island’s economy from 1990 through 2010. https://t.co/UgFz358Ovs. Yet these two major storms revealed much about the disorganized and corrupt nature of Puerto Rican politics, alongside the flawed US federal system as both inappropriately dealt with these national disasters. Beyond its current debt and inability to pay its bills, Puerto Rico’s root problem is lack of economic growth. Puerto Rico has a long and often frustrating relationship with the mainland United States. The economy likely remained downbeat at the outset of the new fiscal year—which began in July—after economic activity started to … Treasury Secretary @stevenmnuchin1 should follow his boss this time. Our Mission:To inform. About 40% of its residents live in poverty, and the median household income in 2017 was $19,775. For example, between mid-September and early October 2017, the category 4 Hurricane Maria devastated Puerto Rico, which at that time was recovering from Hurricane Irma. Every donation—large or small—helps us bring you the news that matters. Is there any hope for Puerto Rico becoming a … But the lending continued well into the 2010s, when the island was careening toward economic chaos. The governor expected the US government to allocate comparable resources similar to what it had already provided Texas and Florida after their own hurricane disasters, and not allow for questionable contracts to be handed out to inexperienced construction companies. Puerto Rico's debt should be wiped out," Summers said. For instance, the Puerto Rico Teachers Union had been fighting against the closure of hundreds of public schools and the privatization of education for years. Common Dreams brings you the news that matters. When economies fail, people leave for jobs and to make money they can send home … Another example of a flawed U.S. democracy is the enduring Jones Act (or Merchant Marine Act) of 1920. "President @realDonaldTrump is right. CPI revealed almost 900 pages of vulgar email exchanges between high-ranking NPP members, including Rosselló himself showing misogynistic, homophobic and immoral statements about political opponents, the Puerto Rican LGBTQ+ community, and victims of Hurricanes Irma and Maria. In 2006, Congress ended special tax breaks that historically aided the Puerto Rican economy. The exodus of those residents, who are U.S. citizens, to the … Over the past decade, as Puerto Rico’s debt has expanded … Bond holders are nervous. Economic Impact of War on Puerto Rico External Trade and the War Shortage of Ships The war has had more disastrous effects upon the economy of Puerto Rico than of any other area now under the United … The exodus of those residents, who are U.S. citizens, to the mainland has deepened the island's revenue crisis, leaving less money to pay for essential services and to repay debts. In the end, history attests, "our Vichy Republicans," a silent gutless cult sunk in "the stink of (their) cowardice," will own it all. Before Maria, IHS Markit projected GDP declines of 3.6% and 2.8% in 2017 and 2018, respectively, for Puerto Rico. Puerto Rico’s problems are symptomatic of irresponsible budgeting and careless overspending, and the only remedy is long-term financial reforms. How Puerto Rico's financial crisis erupted: Puerto Rico has lost about 10% of its population over the last decade, sparking an economic crisis that worsens by the day. But the board asked for emergency funds Tuesday in a letter to Congressional leaders, saying that "your immediate and bold assistance is urgently needed to minimize loss of life, support critical emergency response efforts, and provide tools to support the island’s recovery.". The island's job market has been ailing ever since. The island has lost more than 20% of its jobs since 2007. Because of the quirks of budgeting and political implications, Puerto Rico receives proportionately less Medicaid funding than U.S. states. Aid to help ease Puerto Rico's financial crisis could take the form of a change to the federal law governing the case to make it easier for the island to restructure, Fabian said. These expectations for a thriving social, political and economic life were based on Puerto Rico’s relative autonomy under an expansive US federal constitutional system or what others may call American imperialism that dates back to 1898. Flynn touts martial law, Trump spews 46 minutes of lunatic lies, Stop the Steal cranks echo him, poll workers face nooses. Kelly Straub, MPA, Staff Writer, Brief Policy Perspectives In the wake of Hurricane Maria’s devastation, Puerto Rico’s economic and political future looks increasingly uncertain. More: Trump: Puerto Rico's massive debts should be wiped out, More: Why you can't ignore Puerto Rico's bankruptcy, More: Puerto Rico declares bankruptcy. Puerto Rico is set to file by May 1 a status report to the court on the effects of the virus on the economy. This measure says that any goods shipped between US ports are supposed to be transported by US-built, owned and operated ships. Subsequently, Puerto Rico Justice Secretary Wanda Vázquez — also of the pro-statehood New Progressive Party — was sworn in on August 7 as a replacement for both Rosselló and Pierluisi. These economic … "Someone is going to get killed." For years, bond holders extended credit to Puerto Rico, capitalizing on federal, state and municipal tax advantages. This is a federal law regulating maritime commerce in the US, including its non-contiguous and unincorporated territories such as Puerto Rico. After Hurricane Maria obliterated the island's infrastructure, including power and communications, damage estimates range from $40 billion to $80 billion, according to catastrophe risk modelling software company AIR Worldwide. "They owe a lot of money to your friends on Wall Street, and we're going to have to wipe that out," Trump told Fox News. Without Your Support We Simply Don't Exist. Puerto Rico Oversight, Management, and Economic Stability Act, The Petty Revenge of a Soon-to-Be-Ex-President, 'Heartlessness Mixed With Political Power': Trump Admin Rejected Plan to Provide Mental Healthcare to Separated Families, Alarmed by 'Rapidly Worsening' Pandemic, Top Health Experts Urge GSA Administrator to Immediately Begin Presidential Transition, (Click to see more comments or to join the conversation). Tourism is down, employment is low, poverty is high, and the island has … Hurricane Maria left a path of destruction in Puerto Rico, leaving most of its citizens without access to electricity and clean drinking water. Box 443Portland, ME 04112-0443USA, Common Dreams is a small nonprofit with a big mission. November 10, 2020. The chances of the island’s economy actually growing at any point in the foreseeable future seem remote: indeed, the country has essentially been in one long and nasty continuous recession since 2006.. Puerto Rico … She has become only the second woman to serve as governor in the island’s history. Will He? If ever there was a case for a full debt write off, it's Puerto Rico. This dual dependency must end for the sake of ever achieving any kind of real democratic future in either Puerto Rico or the US. Ricardo Rosselló sought to ease some cuts to education and public services while still paying down Puerto Rico’s $73 billion debt. Every day of the week, we publish the most important breaking news & views for the progressive community. Lawrence Summers, a former economic adviser to President Obama, backed up Trump's proposal in a series of tweets Wednesday. Most recently, the Economist Intelligence Unit (EIU), in its annual review of countries adhering to democratic values around the world, found US democracy to be flawed even without considering its vast overseas territorial possessions. Even the conservative Cato Institute recognizes the antiquated and undemocratic nature of the Jones Act and its negative impact upon Puerto Rico’s economy: “Puerto Rico’s recovery in the aftermath of Hurricane Maria has reinvigorated debate about a relatively unknown law that has hampered its recovery efforts and bogged down its economy. For instance, Rosselló, in May 2017, filed for what amounts to federal bankruptcy protection in order to “restructure about $120 billion of debt and pension obligations,” despite opposition within and outside his own party. To inspire.To ignite change for the common good. There may be some truth to this claim, considering the recent revelations made public by the leaked Telegram chats surrounding Rosselló’s regime. In this case, the US federal government expected Puerto Rico to keep its promise of paying “back” its loans on time and with interest. America's Past Has Shown the Power of 'We.' Puerto Rico has lost about 10% of its population over the last decade, sparking an economic crisis that worsens by the day. In light of Puerto Rico’s post-disaster needs, Gov. Puerto Rico's debt is huge -- about $70 billion. 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