Puerto Rico has been called “America’s Greece” for months now. It’s true – like Greece, Puerto Rico is under a mountain of debt. But Greece is a sovereign nation. Puerto Rico is an American territory subject to different laws than an independent country or even a state.
In 1898, American soldiers invaded Puerto Rico in the Spanish-American War. Later that year, the Treaty of Paris made the island a U.S. territory. Rafael Cox Alomar, law professor at the University of the District of Columbia, said not a lot has changed since then.
“Basically, Congress makes decisions on behalf of Puerto Rico without our explicit consent,” he said. “Not only is this indecent and colonial, but it really doesn’t serve well the economic upliftment of the people of Puerto Rico.”
Cox Alomar is writing a book called “The Puerto Rico Constitution.” He said Puerto Rico’s business community is subject to regulation that most states don’t have to worry about, like the Jones Act, which says that anything shipped between the island and any U.S. port has to go on an American ship.
Charles Venator Santiago, assistant professor of political science at the University of Connecticut, said corporate investment is also down.
“You have to sort of find a way to balance the cycle between labor and corporate investment,” he said. “The more recent measures taken are sort of focused on austerity measures, which eliminate the ability or reduce the ability of workers in Puerto Rico to work.”
Puerto Rico’s unemployment hovers around 14 percent, and 45 percent of the population lives under the poverty level. The central government says it will run out of cash to provide basic services in a couple of weeks.
“And I don’t believe the administration is realizing that the fundamental problem that Puerto Rico faces is both a fiscal problem, but also a political problem,” said Cox Alomar.
The Obama administration’s plan would give the island access to bankruptcy protection it now lacks. Legally, it changes nothing. That would require an act of Congress.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.