How is debt affecting Puerto Rico?


This article by Janet Weinstein appeared in Aljazeera America.

It’s been nearly five years since Ileana Sanchez made the leap of her life, from Guaynabo, Puerto Rico, to Vienna, Va.

“I was a graphic design professional for more than 26 years on the island,” she told Inside Story. “I had my apartment, family close by and clients.”

Today she owns a hardwood flooring company with her husband, Jose Matos, in northern Virginia. She says a withering economy left them no choice but to leave.

“We could see criminality rising, and we could see the buildings were run-down,” says Sanchez.

She is one of the thousands of educated and entrepreneurial Puerto Ricans who have left the island for work.

“On a lot of the businesses and main avenues, there were ‘for sale’ signs. These were in very nice neighborhoods too. And they would stay ‘for sale’ for a long time. Then you’d start seeing the grass and the trees growing inside, and all of a sudden its like, ‘This property has been abandoned,’” she said.

“I said, ‘This is it. Either I move or I’m going to lose what I have here.’”

Behind each ‘for sale’ sign cropping up on her street, a deeper economic problem boiled.

Junk status — that’s how Fitch, Standard & Poor’s and Moody’s now classify Puerto Rico’s $70 billion debt.

That debt equals more than 90 percent of the island’s gross domestic product. Per capita income is just over $15,000 — poverty level on the mainland. Unemployment stands at about 15 percent, double the rate in the continental U.S.

Puerto Rico’s government is testing a list of austerity measures to try to climb out of its hardship: tax increases, rebalancing pensions and requesting billions of dollars in new general obligation bonds to help pay the bills.

In Washington, Puerto Rico’s congressional representative, Pedro Pierluisi, is pushing for assistance too.

“I wrote to the president as well as the White House task force for Puerto Rico, encouraging the president to include full inclusion of Puerto Rico in the child tax credit program when the president submits his next budget petition to Congress,” Pierluisi told Inside Story.

“We cannot continue financing operating deficits as we have for the past 10 years.”

As shops board up and schools crumble, crime and corruption are escalating. In 2011 over 1,000 people were killed — the most in Puerto Rico’s recent history.

Carlos Santiago lost his 15-year-old daughter, Karla, to a stray bullet in 2012.

“The police are doing nothing, and we cannot believe in the Justice Department in Puerto Rico,” he said. “When my daughter was killed, they came and re-created the crime scene, and they stayed as long as there were cameras around. But after that, they never came back.”

The island has long struggled with poverty, but today’s situation is different. The grip of the 2008 recession was virtually inescapable, draining livelihoods seemingly overnight.

Sanchez made it out lucky; she left before she lost everything. “What I know is that a lot of professionals are leaving,” she said. “It’s not necessarily the people who are just starting out and who don’t have an education. These are people who have higher education and are saying, ‘We should just start over.’”

Since she  left, the population has declined by more than 2 percent — a huge hit for a commonwealth of 3.7 million people.

“You get used to certain things and a certain lifestyle. When you start losing things, you adapt,” said Sanchez. “But sometimes it comes to a point where you’ve changed so much, you say, ‘OK, how far do I really have to go?’”

The question of statehood for Puerto Rico was again put on the congressional table two weeks ago. But with deteriorating societal conditions, an educated population on the move and no financial solutions in sight, the challenges for the island remain enormous.

For the original report go to

One thought on “How is debt affecting Puerto Rico?

  1. Wonderful blog! I found it while surfing around
    on Yahoo News. Do you have any tips on how to get listed in Yahoo News?
    I’ve been trying for a while but I never seem
    to get there! Appreciate it

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s