The invisible island
Martha Quiñones Dominguez1
Observatorio de la Deuda en la Universidad de Puerto Rico
The archipelago of Puerto Rico is part of the Caribbean, is owned by the United States as an unincorporated territory, or better defined as a colony, since 1898, and is populated by people who theoretically possess US citizenship. It is a people in resistance to the processes of assimilation and to the process of colonization, its resistance manifested in its use of the Spanish language and in its Caribbean social- cultural structures. The systemic issues that we face in the economy and society are due to our colonial condition that imposes foreign agendas and a model of dependent capitalism and industrialization by invitation. The island adopts policies for accelerated economic growth based on foreign investment- that is, industrialization by invitation, and in the production of goods for export, that is, dependent capitalism.
Political situation
In 2016, the United States Congress approved HR 5278, called the Puerto Rico Oversight Management, and Economic Stability Act (PROMESA). Through this, Congress provided for the appointment of a Fiscal Control Board, through which the control of the handling of the fiscal situation of Puerto Rico by said Board in relation to its public debt is assumed. The Fiscal Control Board imposed by Congress culminates the efforts of the hegemonic financial capital of the United States, to consolidate this model of dependent capitalism as an economic-political-social structure through the PROMESA law, for its acronym in English.
PROMESA proposes a comprehensive adjustment of public finances, labour reform, public policy reform; its objective is to pay the debt and, in that scenario, the economic development of Puerto Rico and social tensions are not important, contrary to what was a process of social stability. What we expect is more fiscal adjustment policies, more budget cuts, more job layoffs, less job stability and the suspension of other social and labour guarantees. Although we are supposed to be a Commonwealth, with the PROMESA law of 2016, fiscal autonomy is eliminated, and it is through the Fiscal Control Board (JCF) that government actions are guided from a neoliberal perspective. Thus it recommends:
- Reduction of State priorities on security, justice and infrastructure;
- Establishment of a regressive tax system
- Reduction of public expenditure on social investment;
- Reduction of pensions;
- Trade liberalization;
- The privatization of government activities and assets, the deregulation of the economy;
- The elimination and privatization of schools and hospitals;
- Reduction of public spending and support to our public university system and the increase in their enrollment.
The Fiscal Control Board, with all its powers above those of Government, imposes fiscal adjustment that tend to increase social inequalities, while maintaining or increasing public expenses that in no way benefit the society, without establishing policies to combat public corruption. It denies recognize the shared responsibility of the United States with the crises of Puerto Rico by maintaining the colonial system. This JCF returns Puerto Rico to its colonial state at the beginning of the 20th century where the USA determined everything related to the Island, with a Government imposed by bankers and the economic-political power of the United States, in order to take profits from the Island.
Economic activity
The dependent capitalist economy and its industrialization by invitation has found its crisis in the 21st century, making capital accumulation impossible and restricting economic growth.2 This crisis is aggravated by ongoing corruption in the public policy processes that have caused the public debt. The loss of the capacity to direct the process of growth arose from the actions of the political and economic class of Puerto Rico, by the dynamics that they established and by favouring the control of the economy by the United States that has eliminated the few tools and instruments that affect development.
In September 2017 the most damaging hurricane that had touched this land in more than 80 years passed through Puerto Rico and some people point to it being the worst hurricane to have passed through the Atlantic since 1950, affecting its economy, its infrastructure, the environment and society in general. There are estimates of economic, environmental and social damages (psychological, loss of life, days of work lost, days of lost classes, and more) that exceed US$ 200 billion.3 The hurricane brought with it the collapse of the country’s electrical network, its communication and transportation systems, its hospitals and its fuel and food supplies as well as the lack of foresight. Puerto Rico faced a humanitarian crisis, due not only to hurricanes Irma (6 September) and María (20 September), but of a limited economic and financial situation, which has weakened its infrastructure for years. The diversion of funds to pay off the debt has caused the deterioration of the island's infrastructure and the living conditions of its citizens.
The synthetic effects are sharpened in the colony, in the absence of political powers and control of the Island through the Fiscal Control Board. The diversion of funds to pay off public debt, adjustment plans, austerity measures, the reduction of the public sector and privatization has compromised the Government's capacity to respond to the immediate crisis and other structural problems. The initial response of the US Government was slow, erratic and centralized and continues in the same way today. The US Congress has shown no rush to provide aid to Puerto Rico, given the debate over corruption and how to manage the funds. Bureaucratic inefficiency, lack of urgency, corruption and flashes of neocolonial attitudes have been part of the response to the situation. The crisis will continue, given the financial situation of the island, austerity measures and corruption, the island has been without electricity for several months affecting its economy and society to which is added that the Department of Finance reports that the amount of resources that are available and collected has also been affected.
Puerto Rico is a big business for the United States because for every trillion of investment to pay for social services, they get an additional 6 trillion, which is the net amount of annual earnings reported, obtained mostly by the US industry and deposited in banks. A fall is expected in the Gross National Product in this fiscal year 2018 that will be 11 percent (according to the draft tax plan) although some economists say it will be 8 percent.4 The absence of electricity and telecommunications brought loss of jobs and income. Between the months of September and October 2017, some 31,600 jobs disappeared, non-agricultural salaried jobs, according to data from the Department of Labor and Human Resources. The Government says that there is low labour force participation, about 40 percent of the working age population is employed, but we do not talk about the conditions of jobs, the lack of them in the formal economy or the labour rights eliminated with the Labour Reform that drive many to find themselves in unreported jobs that are found in the informal economy. To survive, some square their budget with economic aid and others with three jobs, one formal and two informal, others only survive. We definitely have a problem of work and social inequality.
Hurricane winds destroyed nearly 70,000 homes and another 250,000 suffered significant damage, according to data provided by the Department of Housing of Puerto Rico. There were very large losses also in public buildings, roads, bridges, dams, forests, parks, whose recovery will be a gigantic effort for families and for the Government.
Poverty has the face of women and the elderly
The Puerto Rican population is 3,411 million on the Island and a similar number in the USA. Some 18 percent of the population is 65 years old or older, almost 450,000 are retirees who receive Social Security and 150,000 are Government retirees. Some 21 percent of the non-institutional civilian population is disabled and most are 65 years of age or older. There are more and more women than men, especially in the elderly population. Females over 18 years old comprise 53 percent of the population.
Nearly half of the population lives below the poverty level, and after the hurricanes this increased to 52 percent, according to the Census Information Center of the University of Puerto Rico. It is important to note that the percentage of people below the poverty level remains low due to the continuous migration of the population. It is highly likely that many more people cross the threshold and fall below the poverty level if the recovery process is as slow as it has been until now. Women heads of family, the poor, saw their houses damaged by the hurricane and have no way to rebuild or recover everything lost. Many of these women had two jobs, many of them in the areas of services and commerce, which suffered the most in the hurricane and thousands of them closed.
Several studies have found that more than 40 percent of the elderly have incomes at the level of extreme poverty, scarce resources to maintain an adequate standard of living. More than 24 percent of the nuclear families are headed by women. Of this group, 47 percent live below the poverty level. Of the entire population, women constituted 78 percent of those living below the poverty level. Of the participants of the Nutritional Assistance Programme (PAN), 57 percent were women, while 35 percent were children between 0 to 18 years of age. Moreover, 62 percent of children ages 1 to 5 years old live in extreme poverty; 83 percent of families led by women (even those who work and do not receive financial assistance), with children under six years of age, have suffered food insecurity, affecting the ability to improve the quality of life of the family.
The population in general is affected by the high rates of unemployment and underemployment, low rates of economic growth, lack of access to education, health services and, lack of decent housing, and this manifests itself especially in vulnerable populations--young people, seniors, women heads of families with children and people with functional disability.
Emigration
Emigration has always been an escape valve for those facing lack of employment and poverty. Public policy has encouraged the population to migrate to the United States since the 1950s, having several waves of migration and return.5 We found that from 1950 to 2000 in net terms, about one million people (equivalent to 45% of the population of the Island in 1950) moved from Puerto Rico to the USA. For the 21st century before the loss of jobs and a recession, some decided to seek better living conditions and a new wave of migration began, where some 211,000 people left the island between 2000 and 2010.
Migration movement for decades
|
Year |
Emigration |
|
1940-50 |
151,000 |
|
1950-60 |
470,000 |
|
1960-70 |
214,000 |
|
1970-80 |
45,000 |
|
1990-00 |
95,517 |
|
2000-10 |
311,198 |
Source: Department of Health and Vital Statistics 1980-2006.
In the 21st century the Island begins to show signs of the population's decline, but we forget that in the 20th century the campaign was that we had to lower our population claiming that "we were poor because we were many" and now the official discourse changes to "we are poor because we are few."
Emigration after hurricanes Irma and Maria has increased, either for health reasons (seeking appropriate medical services), for reasons of education (closed schools) or looking for a job (due to the loss of jobs) and especially as US policy (from the Federal Emergency Management Agency - FEMA) "stimulating migration". It is estimated that around 100,000 people left the island from September to mid-November 2017. The pace of this emigration may be higher, but we lack appropriate estimates.
Every day more people are forced to leave, owing to the closing of schools, the higher cost of university education and the plans of adjustments, elimination of public jobs and concentration of jobs in the hands of US residents. In addition to the fiscal plans of the JCF and the Government, it is contemplated that the population will leave at a rate of 1 percent per year. The hidden agenda is to depopulate the Island of Puerto Ricans, especially those from the centre of the Island and replace the population with Americans, as the new form of colonization and assimilation. That's why our people in the centre of the island have limited rights to electricity and other essential services so that they are forced to migrate.
Militarization
It is necessary to call attention to the problem of militarization in the Island, justified by the crisis provoked by Hurricane Maria. Troops are located in the towns that possess strategic resources, water, minerals and land. The US military controls the aid that must be offered, the rescue process acts as an ideological and propaganda tool that motivates people to normalize their presence. It is embedded in the depth of the citizens' psyche that aid comes from the Army and that is the reason for all military activity, with propaganda activities that function as "psychological operations". Given the lack of communications in these areas, the overwhelming technological and military superiority of the USA was presented in some villages as needed to clean, deliver supplies and control violence (not criminality) and propaganda with the purpose of influencing the opinions, emotions, attitudes and behaviours of opposition groups.
Human rights violations
To this we must add the problem of persecution and political and social reprimands to those who protest: environmental, student, labour and community groups. The problems of human rights violations on the part of the Governments - local and of the United States - were aggravated during the handling of the emergency after the impact of hurricanes Irma and María. These violations were shown by the inaction in preventing, addressing and repairing the human rights violations that have already occurred and that have worsened after Irma and María, with a humanitarian crisis caused by our economic bankruptcy, our public debt, the PROMESA law and the implementation of austerity measures imposed by our Government and by the Fiscal Control Board. These violations are aggravated for the people of the centre of the island, the islands of Vieques and Culebra and with protests of environmental pollution.
Environmental pollution
One of the Island’s main problems is the environmental pollution that has been caused by the extraction of resources, the damage of ecosystems, the use of agro-toxins, the deposit of pollutants in poor communities, the development of polluting projects, military experiments to test the impact on people of close-range missile testing (such as those conducted in Vieques in the 1960s and 1970s), the use of our lands and waters for military practices and other forms of environmental exploitation or privatization. These environmental problems have become cases of violation of human rights and damage to health and the environment.
Debt
The so-called "fiscal crisis" created by the huge public debt is one of the problems we face due to its exponential growth. This was the result of the application of the policies of the United States towards their territories and local governments, therefore it is important that the USA assume its responsibility to properly solve it. With the PROMESA law, the USA moves away from the problem and assumes that it is the exclusive responsibility of the colonial administration, but imposes as a solution a supra authority of the Fiscal Control Board.
The Constitution of Puerto Rico contains provisions that were designed to maintain the fiscal and financial health of the Commonwealth. The order in the payment of debts is particularly problematic, as payment to creditors by the Government of Puerto Rico is placed above the payment of the ordinary expenses of the Government that directly benefit the population, causing a problem of human rights.
According to the Commission for the Comprehensive Audit of Public Credit of Puerto Rico (2016), the Constitution of Puerto Rico requires that the Commonwealth maintain a balanced budget and prohibit the Government from borrowing to cover the budget deficit. Puerto Rico has borrowed since 1979, without authorization to do so, with the consequence that future credit is limited and that debt can be declared void. But Puerto Rico is also spending between 14 percent and 25 percent of internal revenue on the debt, although the Constitution states that it cannot assume any debt that requires spending more than 15 percent of the internal revenue of the Department of the Treasury.
The Commonwealth has developed a pattern of debt deferral ("scoop and toss") so when the debt was about to expire, instead of paying it, another loan was made and the debt was refinanced. The Constitution states that Puerto Rico cannot issue any debt for more than 30 years, so any debt that is refinanced is nil-- in addition to violations that are made by the non-disclosure of audited financial information and issuing debt that does not contribute to economic growth. There are several reasons for the integral audit of the debt, especially after knowing all the null debts that exist.
The growth of public debt involves many factors, including a financial market and US institutions that induced Puerto Rican governors to take loans, diverse corrupt processes, false information, among others about which we were never consulted. From the citizenship we demand that this public debt be audited, in a process of citizen audit, to determine its origin and legality and how we can obtain a pedagogical tool that helps us understand it and look for alternatives to avoid falling into the same trap. The public debt is illegal for the most part and must be cancelled, given the usurious interest that its payment requires and the way in which it was generated, and after the emergency that has generated the hurricanes Irma and María have joined voices for the reclamation of the cancellation. The people of Puerto Rico are clearly not in a position to assume it, although the alternatives that have been offered to them are more public debt.
It is odious debt for being colony debt, but also because it is much more than a money problem, it is women's debt when it takes away our rights and reproductive health; it is the debt of children when it takes away the right to educate us and closes schools; it is workers' debt when it takes away our labor rights and exploits them; it is environmental debt for all the environmental damage; it is illegal debt for all acts of corruption that divert our resources for uses that do not benefit society; it is exploitation debt when our country is violated and the colony is imposed on us; It is health debt when they pollute our waters, air, land, food and deprive us of health services; It is a military aggression debt when they use our floors and air for military practices and attack neighboring towns. For many more things that debt must be canceled and allow the people the process of self-determination and independence.
We demand
- That human rights in Puerto Rico are guaranteed before payment of the public debt.
- That public policies that foster the creation of decent jobs, safe housing, comprehensive health, gender equality, quality public education at all levels be developed. That the dignified treatment of our elderly (respect for their pensions) be adopted as conditions to combat poverty.
- That social investment versus political spending be defined, and policies be adopted to fight corruption and make good use of public funds, along with the cancellation and public audit of the public debt.
- That the PROMESA law and the Fiscal Control Board that attempt against citizenship and human rights be eliminated.
- That the case of Puerto Rico be made visible so that the colonial situation enters the international discussion.
References
Alameda Lozada, Alameda (2017). Hurricane Maria costs, Presentation at the UPR. Bulletin of the Association of Economists, September to December, 2017.
Figueroa Rodríguez, Raúl (2015). “Profile of the population of Puerto Rico: Main demographic characteristics”; available at: https://es.slideshare.net/rafigueroa/perfil-de-la-poblacin-de-puerto-rico-principales-caractersticas-demogrficas
Planning Board (2000) Demographic and socioeconomic profile of the population disaggregated by gender; available at: https://estadisticas.pr/files/BibliotecaVirtual/estadisticas/biblioteca/Perfil_demogrfico_y_socioeconmico_de_la_poblacin.pdf
Planning Board (2000). Sociodemographic and Economic Profile of Puerto Rico Census 1990-2000; available at: http://www.gobierno.pr/NR/rdonlyres/442C7575-1184-428A-AD5D-F84953E8A5BE/0/Prensa_Muestra.pdf
Planning Board (2015). Socioeconomic Profile of Women in Puerto Rico, developed by the Planning Board (JP).
Quiñones Domínguez, Martha (2014). “The ‘Revolving Door’ of the coming and going of Puerto Ricans”; available at: http://www.pressreader.com/dominican-republic/el-caribe/20141018/282402692637653
Quiñones Domínguez, Martha (2018). Notes on the Brief Economy of Puerto Rico. Work documents.
Quiñones Domínguez, Martha (2017). “Disasters are not natural,” Bulletin of the Association of Economists, September to December, 2017.
Sutter, John D. and Hernández, Sergio (2018). “María: The visual guide of the exodus in Puerto Rico, where are the inhabitants coming from?” available at: https://cnnespanol.cnn.com/2018/02/23/puerto-rico-exodo-huracan-maria-estados-unidos-datos-fema-inmigracion/unidos-datos-fema-inmigracion/
Notes:
