Puerto Rico is an incorporated U.S. territory in the Caribbean with a current total population of around 3.6 million people, 12.5% of whom are black or sub-Saharan African. As such, according to Wikipedia, people born in Puerto Rico are “natural-born citizens of the United States.”
Three days ago on June 29, 2015, Puerto Rico’s governor Alejandro Garcia Padilla admitted the island is broke and asked that the commonwealth be allowed to restructure its debts under U.S. bankruptcy code. But Puerto Rico is not eligible for debt restructuring under the U.S. bankruptcy code because it is not a municipality.
Puerto Rico’s debt is $73 billion, while its GDP in 2012 was $103.5 billion, which means the U.S. territory’s debt is an astounding 70.5% of its GDP!
Alan Yuhas reports for The Guardian, July 2, 2015, that unable to pay its debt, Puerto Rico has begun rationing water, closing schools and watching its healthcare system collapse. Already, 45% of Puerto Ricans are living in poverty, and that percentage is sure to increase.
Puerto Ricans, being already U.S. citizens, are moving to America. Even before the bankruptcy, emigration to the mainland has accelerated in recent years. From 2003 to 2013, more than 1.5 million people had left Puerto Rico. Today, 60% of Puerto Ricans live in the States and 40% on the island according to a 2014 Pew report, with most moving to Florida. Cuny professors Edwin Meléndez and Carlos Vargas-Ramos predict that by 2020, it’s likely that two-thirds of Puerto Ricans will reside in US states.
Edgardo González, coordinator of the activist group Defenders of Puerto Rico, said that most Puerto Ricans are arriving in central Florida, but many cannot find jobs or even housing. González said, “Some might stay with family for a few weeks, but for those who don’t have family, people end up homeless because of the lack of services. People end up living in hotels, living in cars or on the street. Then you have people who are homeless with kids, who get in trouble with the law, and you have to get into it with childcare and welfare services.”
Making matters worse is the fact that professionals with higher degrees are leaving the island in search of work, draining Puerto Rico of the talent it needs to resuscitate its economy and healthcare sector.
In New York, fears of the wave of new immigrants have seeped into the city’s sizable Puerto Rican communities. On Wednesday the Bronx borough president, Rubén Díaz Jr, warned on NPR that the surge would sap the city’s services, especially in the cash-strapped parts of his borough.
The Bronx is poorest of New York’s five boroughs, with almost 30% of its population living below the poverty line. Almost 300,000 Puerto Ricans live in Bronx County, more than any other in the country, according to 2010 data; Brooklyn’s Kings County and Orange County, Florida, follow at second and third.
“Puerto Rico continues to have people leave to the tune of 100 individuals on a daily basis,” said Díaz, who is himself of Puerto Rican descent. “We’re losing a doctor a day that is leaving the island and coming over here. The local governments here in the United States, we have to then absorb the added cost to our localities in order to provide services.”
Díaz urged action by the federal government, saying Congress should give Puerto Rico the power to declare bankruptcy and restructure its debt. As a US territory, the semi-autonomous island does not have the same authorities that allow others to file for Chapter 9 bankruptcy, as Detroit did to cope with its own disastrous finances. “We’re not asking for a bailout, we’re not asking for the federal government to give Puerto Rico a dime,” he said.
White House spokesman Josh Earnest said this week that the Obama administration is not considering any form of bailout for the island.
The island’s non-voting delegate in Congress, Pedro Pierluisi, called for Congress to address the island’s political status, and introduced a bill that would grant Puerto Rico the powers to declare public enterprises bankrupt. Pierluisi advocates statehood for Puerto Rico, and characterized the island’s non-statehood in a letter to the New York Times as inequity: “No people have ever prospered while being treated unequally, and it is not reasonable to expect Puerto Rico to be the exception to that rule.”
But María Enchautegui, a senior fellow at the research thinktank Urban Institute, explains that the problem is probably more intractable than simply bestowing statehood or bankruptcy powers on the territory. Chapter 9 authorities “would be only for municipal debt, which is very small in the whole of Puerto Rico. So I don’t think that is going to solve a lot of the problem.”
Enchautegui suggested that Puerto Rico should restructure its varied debts not just to cut losses but to overhaul the government. “While we are looking at what agencies to eliminate or change, we could actually make a more efficient government,” she said. Restructuring public-private arrangements, as with electrical companies and utilities, could also bring in precious revenues.
Such changes would not require Congress’s intervention, although Washington would have to get involved to bring Puerto Rico’s Medicaid and Medicare systems to the same level as the rest of the states.
Enchautegui points out that the out-migration from Puerto Rico to America “is now more than 5 million people, most who keep relations with Puerto Rico, have family there they go and visit. Those could be human resources, capital and knowledge that can bring back investments, businesses, networks. They left the island, that’s the way they have dealt with the crisis, but they are very connected to it.”
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