When Puerto Rico’s debt crisis began to make world headlines around 2013 media coverage often referred to Puerto Rico as ‘the Greece of the Caribbean.” Certainly, there are both striking similarities and important differences between the two countries. This article offers a brief history of Puerto Rico with which to understand this important (and often hidden) story.
Puerto Rico is a small archipelago of islands located at the northeast corner of the larger Caribbean archipelago. It consists of one large island plus hundreds of smaller islands, several of which are currently inhabited. By the time of the European invasions of the western hemisphere at the close of the fifteenth century what was known as Borikén had already been inhabited for thousands of years. Nowhere in the western hemisphere were indigenous civilizations so devastated by invasion, genocide, enslavement, and colonization as in the Caribbean, where the mass kidnapping of Africans into transatlantic enslavement also began.
Puerto Rico and Cuba were the last Spanish colonies in the western hemisphere, and their independence movements were linked. By the end of the nineteenth century thousands of Puerto Ricans were fighting in the Cuban war for independence. At the same time Spain conceded autonomy to Puerto Rico in an agreement which included a locally elected government and the right to make international economic agreements. The United States invaded Puerto Rico during the Spanish-American War of 1898; as part of the change of colonial rulers Puerto Rico lost its autonomy and once again became a colonial possession without any sovereignty, a political status which continues today 121 years later. U.S. citizenship was imposed on Puerto Ricans in 1917, only months before the U.S. entered World War I and instituted a military draft which included Puerto Ricans.
After World War II, the worldwide intensification of anticolonial struggles pushed the colonizer powers to give at least the appearance of support for decolonization. The newly created United Nations required colonizer member states to give annual reports detailing efforts to promote their colonies’ exercise of self-determination. The U.S. response was to allow “loyal” Puerto Rican political sectors to draft a constitution which created the appearance of self-rule and convinced the UN to remove Puerto Rico from the list of “non self-governing territories.” The US Congress accepted the constitution only after first removing a section which contained the “Universal Declaration of Human Rights” to jobs, housing, education and health, and then inserting another that prioritized paying government debts over providing public services. Following orders from Washington, the Puerto Rican government criminalized support for “subversion,” and “conspiracy to overthrow the US government” – including possession of the Puerto Rican flag – which was used to jail independentistas and communists until after the new constitution was approved in a referendum. Puerto Rico’s new political status was called in English a “commonwealth” without, of course, defining it as an independent state such as those in the former British colonies, or as a US state as several are officially named. This masquerade of self-rule was finally dropped in 2016, when the US Supreme Court affirmed that Puerto Rico did not have even the minimal sovereignty of a federally recognized indigenous tribe, and that “commonwealth” did not change the status of Puerto Rico as a territory wholly subjected to the U.S. In Spanish Puerto Rico’s status was named “estado libre asociado” (associated free state), leading many Puerto Ricans to call it “not associated, not free and not a state.” For at least the last forty years, Puerto Rican organizations make a yearly pilgrimage to the UN Decolonization Committee, testifying to continued colonial status and requesting that the UN place Puerto Rico once again on the list of non-self-governing territories. Every year the committee recommends placing Puerto Rico on the General Assembly’s agenda, but to date that has not occurred.
As far as electoral politics in Puerto Rico is concerned, two colonialist parties alternate control of the government. They have little real power at a macro level; however, they do control the budget to give contracts to their friends, and corruption is rampant with respect to many aspects of governance. One party, the “New Progressives” (PNP) favors Puerto Rico becoming a US state. The other party, the Popular Democrats (PPD), favors the current status with greater local autonomy. The two parties alternate in power because every four years the voters make a “voto del castigo” (punishment vote) to throw one out and put the other in. There also exists the Puerto Rican Independence Party (PIP). However, due to decades of repression and marginalization it has not received much electoral support. Additionally, there are deep divisions among Puerto Rican independence and left groups which leads many independentistas to either boycott elections or support periodic “new” parties and independent candidates. The electoral system is similar to that of the U.S., in that the winning candidates or parties do not need to gain at least 50% of the vote. Additionally, there no way for parties or other groups to form electoral coalitions. As in the U.S. the system is designed to promote “bipartidismo” (the two-party system).
U.S. colonial rule has been characterized by political and cultural repression, combined with divisive alliances with local elites designed to weaken resistance to U.S. capitalist exploitation. The history of U.S. capitalist and colonial exploitation of Puerto Rico may be divided into several phases. First, during the first half century Puerto Rico’s economy was characterized by absentee monocrop production of sugar cane, and to a lesser extent tobacco. The placement of Puerto Rico behind the U.S. tariff wall eliminated the direct economic markets that it had developed, and especially affected its once vibrant export of coffee – known as “the Vatican’s choice” – to Europe. Thousands of small farmers lost their farms, becoming agricultural workers who migrated not only to the expanding sugar cane fields in Puerto Rico, but also to Cuba, the Dominican Republic, and even as far as Hawai’i.
Second, after World War II the U.S. promoted the world’s first program of “third world” export-led industrialization in Puerto Rico, known as “Operation Bootstrap,” which was touted as the “anti-Cuba” development model with Washington’s blessing. Once again thousands of workers migrated to the new “modern” employment sector, while former agricultural lands were covered in cement for factories and housing. This industrialization strategy consisted of offering local and U.S. tax incentives, plus other incentives such as energy, water, and cheaper labor, to U.S. corporations. Early products included labor-intensive sectors such as textiles, while the later phases included petrochemical and pharmaceutical products. In fact, by the 1990’s Puerto Rico was considered to be the pharmaceutical capitol of the world. However, each succeeding industrialization phase generated fewer jobs, which maintained a high formal unemployment rate as well as continuing emigration to the U.S. The termination of most U.S. tax incentives in 2006 resulted in the loss of many private-sector jobs, while public sector privatization and “austerity” laws pushed Puerto Rico into a severe economic recession which has only deepened over time.
In 2009 a “fiscal emergency” was declared by newly elected pro-statehood governor, which he used to push through a law to get rid of tens of thousands of public employees. This action made the economic recession that started in 2006 become much worse very quickly. Since then there have been attempts to close public schools, sell off public university campuses, privatize highways, the international airport and the ports, the privatize electricity and water, build infrastructure to facilitate increased use of natural gas and coal instead of renewables, and attract billionaires from the US to live in Puerto Rico tax free with the argument that they will invest and create jobs (which is of course not happening).
Many of these plans met fierce community opposition and were defeated or delayed; however, some went through, either with that government or with the next two. Continued job layoffs, school closures, new taxes, and a host of other measures typical of neoliberal policies, promote emigration. The media emphasize “bad” news, and rarely pay attention to positive developments, such as new cooperative efforts in local agriculture for example, except with an isolated spin that does not reveal collective resistance to the status quo.
As a classic colony, the U.S. extract profits from Puerto Rico in multiple ways. For example, Puerto Rico is required to use the U.S. merchant marine – the most expensive fleet in the world – for all shipping. U.S. corporations routinely dump their inferior products – including meat, vegetables, and processed foods – in the Puerto Rican market, a practice which undercuts local industries. Another important example of undercutting is the proliferation of “big box” department stores and fast food restaurants. (For example, there are more Walmart stores per square kilometer in Puerto Rico than anywhere else in the world.) Puerto Rico’s captive consumer market is one of the world’s most profitable for such stores. How does this continue despite a local economy that in general is not growing? Among other things there is a large informal economy – with both legal and illicit products and services – which is not taxed. Puerto Rican are eligible for some U.S. federal domestic aid programs, although the total value is much less than what they pay directly and indirectly to the U.S. Puerto Rico has also been used for military training and weapons experiments, which also have their economic, political and environmental consequences, while serving as a fertile military recruitment ground for what may be called a “poverty draft.”
And above all, there is debt. This is not simply individual debt, although many Puerto Ricans maintain a middle-class façade through maxed-out credit cards and mortgages. Puerto Rico is arguably the largest debtor in the U.S. domestic “sovereign debt” market. Every U.S. public and private fund – and many international funds – invested in Puerto Rico bonds because its official status as “belonging to, but not part of the United States” gave it exemptions not normally available to U.S. or foreign government entities. As Puerto Rico’s deepening economic recession began to receive media attention around 2013 – causing its credit rating to plummet to “the junkiest of junk” – bondholders looked to dump the their holdings at a discount which were eagerly snapped up by Wall Street vulture funders (including some who will be familiar to Greeks such as John Paulson and Paul Singer).
In 2015 the Puerto Rican government admitted that it would be unable to continue to pay its debt. It asked to be included in the bankruptcy laws that cover US states, but Congress rejected the request. The Puerto Rican government also passed its own bankruptcy law, which was overturned by the US Supreme Court in 2016 on the grounds of Puerto Rico’s total lack of sovereignty. At the same time Congress passed – and President Obama signed, arguing that “there is no Plan B for Puerto Rico” and “T.I.N.A.” – the Puerto Rico Oversight Management and Economic Stability Act (cynically known by its acronym “Promesa” – promise, alluding to a Puerto Rican cultural tradition), which among other things established a “territorial” bankruptcy procedure and created a fiscal “supervision” board, known in Spanish as the Junta de Control Fiscal (fiscal control board), or simply “La Junta.” The members were all appointed by the president, but its funding comes from Puerto Rican taxpayers. The Junta regularly sucks millions of dollars monthly from the public, spending it on expensive attorneys and its executive director, Natalie Jaresko (she makes $645,000 per year plus benefits, far more than even the US president). Jaresko will be familiar to those who followed news about the violent coup of 2014 in the Ukraine, as she was named finance minister and presided over the privatization of many public services.
Puerto Rico debt repayment terms are currently being negotiated between the Junta and the wealthiest (“vultures”) creditors; the agreements must be approved by a US federal bankruptcy judge, who routinely rejects requests for input from organizations representing the Puerto Rican public. Nowhere has the US acknowledged the argument that only sovereigns – not colonies – can be held responsible for debt. Ironically, it was the U.S. position during the peace negotiations with Spain in 1898, that Cuba’s colonial government was not responsible for its debt, which formed a foundation for the concept of “odious debt.”
Many Puerto Ricans believe that the policies promoted by both the U.S. government and Puerto Rican governments seem designed to accelerate emigration. Coupled with the massive sterilization programs carried out between 1930-1970 (the world’s highest rates, more than a third of the female population), led the great independence leader and martyr Dr. Pedro Albizu Campos to remark that the U.S. “wanted the cage but not the bird.” The devastation of Hurricane Maria in 2017 was but the most recent example of US businesses and the government – and their local collaborators – to use a disaster to grab land, displace populations, and make profits from the disaster industry.
So what have the people done to resist? Despite more than 500 years of colonialism
(400 under Spain and now 121 under the US), repression (murder, torture, prison, exile, spying, job blacklists, etc.) mis-education and selective welfare benefits to encourage dependence, there have always been Puerto Ricans who resist in many ways and continue to create alternatives. Solidarity and a sense of community, as well as a strong national identity that transcends political affiliations, were largely responsible for the survival and slow recovery of so many Puerto Rican communities following the devastation of Hurricane Maria. Every environmental, cultural, economic and social movement and community-based project in Puerto Rico has had strong and often crucial support from activists who identify as pro-independence. While independence struggles have sometimes included armed struggles (and severe repression), Puerto Rican identity and resistance are present in our music and dance, our literature, our sports teams, our festivals, even our jokes. The massive protests of July 2019 – culminating in a march in which close to a third of the population participated! – resulted in the resignation of Puerto Rico’s corrupt governor. While some say that not much has changed after such as limited result, what has changed is the old argument that Puerto Ricans are happy colonials and are afraid to protest. In all of that multitude not one U.S. flag was raised, despite the large numbers of the population that usually votes for the statehood party. No longer does anyone believe that La Junta will “clean up” Puerto Rican politics. The process of decolonizing Puerto Rican minds and pointing people beyond the local problems towards the chief obstacle – the lack of power to make our own decisions because of colonialism – is long, convoluted, and frequently disheartening. In addition, the ravages of capitalism have severely damaged the natural environment, which along with labor forms the basis for a sustainable society. Clearly, our survival depends on the ability to implement policies designed for long term collective health for both nature and society.
Briefly, what do most people who reject the Junta and the status quo demand? Points of Consensus include:
1) No imposed agreements on debt payment. Creditors must negotiate with Puerto Rico.
3) Audit the debt, to see exactly who solicited, signed and benefitted, and bring criminal charges against them. Acknowledgement of odious debt, and the US responsibility as the colonizing power.
4) End Puerto Rico’s colonial status! Create a Constituent Assembly not controlled by the political parties, to agree on a non-colonial and non-territorial status and then demand a resolution from the US
The only status that the US in international terms cannot say “no” to, is independence.
they could say no to US statehood or some free association status.
A resolution of our political status would also have to include compensation from the US for 121 years of colonial exploitation. Puerto Rico’s $73 billion-dollar public debt is small by comparison.
Another important aspect to our struggle is that Puerto Rico is part of Latin America. There is a saying in Latin America, that its independence will not be complete until Puerto Rico becomes independent. In Latin America we frequently refer to “La Patria Grande” Η Μεγάλη Πατρίδα.
So then Independence is not the end goal, but rather is seen as a necessary beginning.
What are we really looking for? A chance to make the decisions that most affect us, our families, our communities, not only to survive but to thrive, so our children’s children might have the chance to care for and enjoy the beautiful country and culture that we are part of.
And to be able to share freely, and with mutual respect, with other peoples. Far from independence being “separation”, we see it as the way towards being able to open up to the rest of the world. This is something that we can’t do being the iron curtain of US colonialism. We want the ability to freely associate with the rest of the world, to work together under conditions of mutual respect, and to share in the great task of long term survival of all of our peoples and our planet. Isn’t this what struggles for independence, justice, and real democracy should be about?