[News] Puerto Rico's Debt Crisis: Greece Isn't Alone in Struggling Against Austerity

[Anti-Imperialist News]

    Puerto Rico's Debt Crisis: Greece Isn't Alone in Struggling Against
    Austerity

Monday, 19 October 2015 10:34 By Michael Nevradakis 
<http://www.truth-out.org/author/itemlist/user/48720>
*http://www.truth-out.org/news/item/33275-puerto-rico-s-debt-crisis-greece-isn-t-alone-in-struggling-against-austerity*

Over the past several years, global headlines have frequently been 
dominated by the ongoing financial crisis in Greece. Far less has been 
heard about a similar crisis that has been unfolding during this same 
time period in Puerto Rico, which officially remains a colony of the 
United States. Despite the different political status of the two 
nations, the crises in both Puerto Rico and Greece bear similar 
hallmarks. The political and economic responses to the crises have also 
been remarkably similar, involving the implementation of strict 
austerity measures, privatizations of key public assets and the threat 
of further cuts in the future.

Déborah Berman-Santana is a retired professor of geography and ethnic 
studies at Mills College in Oakland, California. Throughout her academic 
career, she has closely studied the forces of colonization and 
neoliberalism and their impact on Puerto Rico and other nations, and has 
taken part in the struggle for the freedom of Puerto Rico. She spoke to 
Truthout recently about the current crisis in Puerto Rico, its colonial 
roots and its many similarities to the crisis in Greece, a country she 
recently visited, while also describing her own personal process of 
decolonization as a Puerto Rican.

*Michael Nevradakis: Share with us a brief history of the colonial 
exploitation of Puerto Rico.*

*Déborah Berman-Santana:* Puerto Rico [and] Cuba were the last of 
Spain's colonies in the Western Hemisphere and were both on their way to 
independence. Puerto Rico had an autonomous situation and Cuba was 
winning a war against Spain when the US intervened in the 
Spanish-American War of 1898. Cuba received a conditional independence, 
and Puerto Rico was outright given to the US. It was, you might say, war 
booty, and since then, the United States has enforced strategies of 
exploitation of the natural and human resources of Puerto Rico. First 
with the sugar cane exploitation, then after World War II, the world's 
first third-world development via [an] export-led industrialization 
program, known as "Operation Bootstrap," which depended on generous 
exemptions to foreign (mostly US) corporations.

In the 1990s, there was a transition to eliminate some of these 
exemptions, which was completed in 2006, and with the end of those 
exemptions, a lot of corporations left, but there was a tremendous 
expansion of big-box corporations such as Walmart. Puerto Rico actually 
has more Walmarts per square inch than anywhere else in the world, and 
before that it was the world capital of pharmaceuticals.

The latest method of exploitation is through the debt and the demands of 
the creditors, who are now mostly vulture funders, to impose the 
harshest austerity and privatization regime on Puerto Rico.

*Puerto Rico has been referred to in the press as the "Greece of the 
Caribbean," while Greece has also at times been referred to as the 
"Puerto Rico of the Mediterranean." Describe for us the so-called debt 
crisis in Puerto Rico as it is manifesting itself today, who is actually 
responsible for it and what the people are being told about it.*

If you listen to the media, you will think the government has been 
spending beyond its means, it has taken on much more debt than it could 
pay for and the people of Puerto Rico are simply not industrious enough. 
[You would believe] that we have expensive first-world tastes but 
third-world pockets, and that now we have to take some "bitter medicine."

But if you actually look at the crisis you will see that it is a very 
small percentage of those in Puerto Rico who have benefitted, mainly the 
local oligarchy and the big corporations, mostly from the US. If we did 
an audit, they would probably find that much of the debt is odious 
and/or illegal, but I would say that since we are a colony and don't 
have sovereignty, the United States is responsible for this debt.

*One of the ironies here is that when the United States took over 
colonial control after defeating the Spanish, it refused to take over 
the debt that had accumulated under Spanish colonial rule. Now the 
United States is insisting that the people of Puerto Rico burden this 
new debt. Is this indeed the case?*

Yes, it is. When they were negotiating the terms of the Treaty of Paris, 
Cuba was supposed to become independent, and the Spanish insisted that 
the Cuban government had accumulated a tremendous amount of public debt. 
The US argued that [the debt] had been accumulated under a colonial 
regime and therefore was odious debt, and therefore should not be paid 
by Cuba, and in effect it was not paid.

This is part of the basis for the whole idea of odious debt, 
unsustainable debt, that we see the anti-debt movements use. It's ironic 
that the US helped Cuba to not pay that debt with that argument, but 
there's not even discussion of anything similar happening with its own 
colony, Puerto Rico.

*What has the official response to the debt crisis been on the part of 
Puerto Rico's government and on the part of Washington? It seems similar 
to what has happened in Greece, with new austerity measures and 
authority granted to unelected technocrats.*

We have two alternating colonial parties, one that says that we can 
improve the current political status, while the other says that we need 
to become a [US] state. The current government has said that the debt is 
not sustainable and we need to find a way out of this. Washington says 
that it can "help" with some technical assistance, but that it's not 
their problem.

What they mean by "technical assistance" is they will tell the 
government of Puerto Rico to contract certain "experts" from the US to 
take care of this problem. Of course, it is with the Puerto Rican 
people's tax monies that we're paying for these "experts." Who are these 
"experts"? To give an example, Puerto Rico is not an independent 
country, so we don't deal directly with the IMF [the International 
Monetary Fund]. However, one of the more important reports that have 
come out recently is called the "Krueger Report," from Ann Krueger, a 
former chief official of the IMF. She is now working on her own and has 
other former IMFers that have been contracted by the government of 
Puerto Rico to prepare a report. It's very lucrative for these top firms 
in New York.

They were paid half a million dollars to spend three to four months in 
Puerto Rico, interviewing some Puerto Rican economists and taking a 
report from the New York Federal Reserve, and they came out with, for 
their half a million dollars, a 26-page report that cherry-picked some 
information, only looking at Puerto Rico's economic situation since 
2000, and their recommendations all come from the IMF playbook. The 
judge who presided over the bankruptcy of Detroit has also been 
contracted by the government of Puerto Rico.

*The Puerto Rican authorities have recently released their own "fiscal 
adjustment plan." This phrase should be familiar to anyone who has 
followed the crisis in Greece. What are the similarities in the two cases?*

I've taken a look at the memorandums and while there are certainly 
differences, I find a lot of striking similarities in the language. They 
speak about the "sustainability" of the debt and about the issue of 
making Puerto Rico more "competitive," for example, reducing or 
eliminating the minimum wage for young workers. Also, streamlining the 
bureaucracy and making Puerto Rico a more "business-friendly" or 
"investment-friendly" environment, as if a colony isn't friendly enough, 
and getting rid of the Christmas bonus for public employees, because 
that's supposed to be a really terrible thing that's very wasteful. 
Additionally, [they speak about] the "restructuring" and the 
privatization of the electric energy authority, the water and sewer 
authority and our highways. One of the highways has already been 
privatized, and guess who's running it: It's Goldman Sachs.

*What has been the impact of "foreign investment" in Puerto Rico, and 
how has this also impacted local business and industry?*

Walmart has received subsidies and tax incentives in order to establish 
itself in Puerto Rico, far more than the local businesses receive. As is 
true elsewhere in the world, where Walmart establishes itself, it tends 
to drive out local businesses. Instead of full-time employment, with 
circulation within Puerto Rico of our income and our spending, you have 
part-time workers with no benefits, and Walmart takes most of the 
profits outside of Puerto Rico.

I'll say a bit about Donald Trump. He has this reputation of being a 
billionaire who, if he is interested, is going to bring in a lot of 
investment, and of course he gets heavily recruited. He was going to do 
the "Trump Estates," a luxury golf resort. He [makes these investments] 
through his various businesses, and he didn't actually invest his own 
money; he received a big loan from the Puerto Rico Development Bank. Not 
only did he not build this luxury investment, but that particular 
company went bankrupt and Puerto Rico cannot collect on that money. So 
Donald Trump can go bankrupt and owe Puerto Rico money, but Puerto Rico 
does not have the right to go bankrupt.

Additionally, there is some interest in trying to connect all of the 
islands of the Caribbean and to generate energy in Puerto Rico, more 
than we need, in order to sell to the rest. There is a project, which 
Puerto Ricans are fighting against, to build a giant incinerator, 
supposedly a waste-to-energy incinerator, which will fill up Puerto Rico 
with toxic waste. And, since we don't have enough garbage, they would be 
looking to burn the garbage of other places.

*What has been the impact of the cabotage rules [rules governing trade 
or transport in coastal waters or airspace or between two points within 
a country] being enforced by the United States in Puerto Rico?*

Since the early 20th century, Puerto Rico has been forbidden from having 
anything come into or go out of the country except on US-registered 
ships with US crews. The US merchant marine is the most expensive, least 
efficient, most obsolete and least competitive on the planet. If we were 
able to do our business with anyone else, Liberia, Greece, anybody, it 
would immediately lower our costs for everything.

We have been lobbying for years to get this changed, and this is a point 
of agreement among all of the political persuasions in Puerto Rico. The 
US Virgin Islands don't have this, and the reason why we have it is that 
the US merchant marine would probably disappear if it were not for 
Puerto Rico.

*Something that is often heard in Greece is that the country does not 
produce enough food and resources in order to sustain its population, so 
that the country cannot survive without the European Union and the 
eurozone. Is this a narrative that is heard, even about issues such as 
food production, in Puerto Rico?*

Absolutely. At the time that the US invaded and occupied Puerto Rico, 
Puerto Rico was not only self-sustaining, but was exporting to other 
islands as well. Nearly all arable lands were then taken over by sugar, 
and the local production of foods dropped dramatically. [As a result], 
the big corporations, for example California Rice, began to import into 
Puerto Rico to feed people. [We were told] that we need to 
industrialize, that our water resources weren't that important, our soil 
wasn't that important, that we needed to fill them up with cement, 
industrialize, urbanize, that we could import all of the foods we needed.

What has happened in Puerto Rico is a preference has been created for 
imported goods. To this day, somewhere between 70-80 percent of the food 
consumed in Puerto Rico is imported, and it's not the good stuff. It is 
the eggs and the chicken that they can't get rid of in the United 
States. Not coincidentally, the incidence of diabetes and cancer and all 
kinds of hypertension and gastrointestinal diseases has increased.

*What is the political and electoral system like in Puerto Rico, what 
representation does the island have in Washington and what is the 
mentality of voters in Puerto Rico toward the political parties?*

Puerto Rico has been defined by the Supreme Court as an "unincorporated 
territory, belonging to but not a part of the United States." In the 
early 1950s, the US promoted a cosmetic change in the government of 
Puerto Rico and defined it as a "commonwealth" or "associated free 
state." We say that we're /not/ associated, /not/ free and /not/ a 
state. This was meant to get Puerto Rico taken off the United Nations' 
list of non-self-governing territories because if you're on that list, 
the colonizer needs to report every year. For the past 33 years, Puerto 
Rico has come before the committee on decolonization in the UN; they 
have voted every year to bring it before the General Assembly, and the 
United States has vetoed it every year.

We have two houses, we have a governor, and we vote every four years. We 
also have a non-voting resident commissioner who sits in committees in 
the House of Representatives in Washington but does not have a vote. He 
does vote on committees and can speak, but he cannot vote on the floor. 
So that is our representation, which is less than what we had under 
Spain. We cannot make our own economic treaties; if there's ever any 
issue, the US can step in and veto it. We have the US federal court, 
which is only in English. The judges are all Puerto Rican, but you have 
to do everything in English. You go in there and they're all speaking in 
English, even though most Puerto Ricans do not speak English. They call 
it "el difícil," the difficult one, because people don't want to speak 
it. In the federal court proceedings, people will not speak Spanish, so 
you have to have a translator, and many times the translator knows less 
English than the people in the audience. So this is a real carnival.

At the same time, the Puerto Rican courts are based on Roman law, just 
like all of the Latin American and the Mediterranean countries, whereas 
the federal court is based on Anglo-Saxon law, and one will supersede 
the other.

To give an example, Puerto Rico does not have the right to declare 
bankruptcy, Chapter 9, as do the states. So in order to try to deal with 
this debt crisis, the Puerto Rican government actually passed a law, our 
local Chapter 9, and the creditors sued in federal court and won. So we 
can't do that either.

*An issue that is a political hot potato in Puerto Rico is that of 
independence, similarly to how "Grexit" is a hot potato in Greece. How 
is the issue of independence viewed in Puerto Rico?*

The issue of independence has been criminalized in Puerto Rico. There 
has been tremendous repression. We have had many political prisoners, 
including one at the moment named Oscar López Rivera, who has been in 
prison for 34 years of a 75-year sentence for "seditious conspiracy to 
overthrow the government of the United States in Puerto Rico." He has 
not been accused of or convicted of any violent crime, and there is 
currently an international campaign to pressure President Obama to free him.

There have been many violent deaths, many forced exiles, a tremendous 
amount of fear and repression, and we've been taught that Puerto Rico 
does not have either the human capacity or the natural resources to be 
independent, and most people believe this. [In schools] in Puerto Rico, 
there used to be a geography book, by a North American named Mueller, 
which said that "Puerto Rico is a small island without natural resources 
and it's overpopulated, and so it cannot be independent and it needs to 
rely on the United States." That was the first thing you learned.

One of the things I have had to do is to decolonize myself. This has 
been one of my inspirations for going off to school and becoming a 
professor. It was the whole idea of "why am I told that I'm less than 
everyone else? Why am I told that I have to depend on someone else?"

Currently, the people who openly support independence - and there's open 
and also hidden support for independence - is small. We do have an 
Independence Party that gets maybe 4-5 percent of the vote. Most 
pro-independence supporters don't actually support the party because 
there's a tremendous amount of division among the Puerto Rican 
independence supporters. When we unify, we can achieve some wonderful 
things, but we are incredibly divided for many reasons. Other people 
will vote for one of the majority parties for some strategic reason, to 
keep the other one out. Some people will actually vote for the statehood 
party because they think that if Puerto Rico asks for statehood Congress 
will say no, while others will vote for the colonialist party, saying we 
can't vote for statehood under any circumstances, that maybe we can get 
some autonomy. And there are many people who refuse to vote because it 
is a colonial process.

I believe that we really have no way out unless we can take some 
responsibility and have some power to decide our own future. 
Independence does not guarantee it by itself, but there is no way that 
you have the /possibility/ of having enough sovereignty to make your own 
decisions without independence. We could join with the wonderful 
unifying collaborations that are happening in Latin America right now. 
We /are/ a Latin American country. There is a saying in Latin America 
that the independence of Latin America is /not/ complete without Puerto 
Rico. I believe that. I've spent a fair amount of time in Latin America, 
and the thing that's always impressed me is that we have been so 
isolated, so part of a "iron curtain" of colonialism, so affected by an 
embargo at least as strong as that of Cuba and less known, that we don't 
even know that we're not isolated, don't even know that we have a 
"patria grande," a greater country, and that's Latin America. I believe 
it's our destiny; I believe we won't survive unless we do it.

*Based on your own experience from Puerto Rico, and having visited 
Greece and having followed the developments there, would you 
characterize Greece as a sovereign country or one that resembles a colony?*

Speaking as an outsider, Greece of course officially has all the 
trappings of a sovereign country. It reminds me of Latin America before 
the last 20 to 30 years, where you have those trappings of sovereignty, 
but in terms of real governance [it was] very colonial, with an 
oligarchy that benefitted from this and was only too happy to serve the 
interests of the outside powers.

It seems to me that the membership in an unequal union, such as the EU 
and especially the eurozone, has taken away much of Greece's sovereign 
ability to make its own decisions. If you want to do things with your 
economy, say devalue the currency, control what comes in and what goes 
out, it's impossible to do in the eurozone. [In Greece], I found it very 
interesting to see the EU flag next to the Greek flag almost everywhere. 
All I could think of is Puerto Rico, where we are often forced to have 
the United States flag next to the Puerto Rican flag. We call the US 
flag "la pecosa," which means "the freckly one," and I was looking at 
the EU flag and I was saying, "That's another pecosa."

"Where would we be without her?" That's a saying in Puerto Rico for the 
people who are pro-statehood. I find that so similar to the things that 
I've heard from Greeks in discussing their fears about going back to the 
"bad" days of the drachma. There's a part of me that says, "What are you 
afraid of?" You at least have the trappings of sovereignty. We have much 
further to go than you do. And I'm saying, as a Puerto Rican, do it and 
give us hope that we can do it too.

-- 
Freedom Archives 522 Valencia Street San Francisco, CA 94110 415 
863.9977 www.freedomarchives.org
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