Here is a timely commentary by Adriana Garriga-López (associate professor of anthropology at Kalamazoo College) recently published in Fortune. Her main point is “Beyond food and water, common medicines, first aid, clothing, and other fundamentals, Puerto Ricans need debt relief.” Garriga-López writes:
Only a few days after heaving a collective sigh of relief when Hurricane Irma narrowly skirted Puerto Rico, the U.S. territory has suffered its worst storm in a century. The passage of Hurricane Maria over the islands that comprise Puerto Rico has led to a massive breakdown in infrastructure of all sorts. From electricity to water, cell phone networks, television, cable, Internet, and telephone lines, residents of Puerto Rico, like many others in the Caribbean, are now living without the basics of modern life.
The U.S. owes Puerto Rico more than just aid and support after a disaster like this. Hurricane Maria’s destruction has laid bare the political subjugation Puerto Rico has experienced since 1898. This imbalance of power has led to a flawed relationship in which the U.S. prioritizes Puerto Rico’s credit obligations—held primarily by vulture funds from the U.S.—over its inhabitants’ quality of life. The U.S. owes Puerto Rico a serious attempt at restructuring this relationship to ensure justice for Puerto Ricans.
Puerto Rico has long been a captive market for U.S. consumer goods. The U.S. has benefited from extensive corporate tax breaks and exclusive rights over shipping to and from the island while saturating local markets to the point of annihilation of local business. One obvious way to improve conditions on the island would be to eliminate the existing regulations on shipping to and from the island established in 1917 under the Jones Act, which made it necessary for all goods destined to Puerto Rico to first dock at a continental U.S. port and be shipped under an American flag by a U.S.-based crew.
It should not have taken a catastrophic hurricane to get Washington to consider a moratorium on these shipping laws. They have been on the chopping block for a long time. It is time to drop the ax and set Puerto Rico free from these unfair restrictions that strangle its economy, prevent it from receiving much needed help from some of its closest neighbors in the Caribbean, and raise the price of consumer goods far beyond what is common in the continental U.S., especially for unprocessed foods.
The fiscal control board appointed through PROMESA, a federal law passed last year to help resolve the Puerto Rico resolve its debt crisis, has promised $1 billion for post-hurricane recovery—a large sum, but one wholly insufficient to recover from the vast damage caused by the storm. Given the low amount of money being promised, Puerto Rico may find itself pleading for debt forgiveness and being told that instead it should accept more loans.
Forcing austerity on Puerto Rico would be unsound by any measure of fiscal responsibility or notion of economic development, as prominent economists such as Columbia’s Joseph Stiglitz and the United Nations’ Martin Guzman have argued. In the current context of total devastation, lack of public services, and a traumatized population that is still desperately trying to reach family members and account for neighbors lost during the storm, the prospect of further austerity measures seems simply impossible. How can you squeeze something out of nothing?
The compounded impact of these storms amid Puerto Rico’s debt crisis also greatly increases the likelihood of a renewed massive migration out of Puerto Rico to the continental U.S., especially by those who have the significant means it takes to make such a move, thus further depleting the island’s tax base.
Investors who purchased Puerto Rican debt for pennies on the dollar should not ethically expect to collect five- or ten-fold on investments, especially if those profits mean the destruction of an entire society. Stateside Puerto Ricans, who are seeing their ancestral home battered by both natural phenomena and the indifference or even cruelty of American economic and political power, are currently mobilizing for debt amnesty. Whether they are successful will depend on how much the U.S. is willing to confront its role in the crisis.
Beyond food and water, common medicines, first aid, clothing, and other fundamentals, Puerto Ricans need debt relief. It is time for the U.S. to not only forgive Puerto Rico’s fiscal debt, but pay off its moral debt to its southern neighbor.’