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<h2 class="itemTitle"> Puerto Rico's Debt Crisis: Greece Isn't Alone
in Struggling Against Austerity</h2>
<p><span class="itemDateCreated">Monday, 19 October 2015 10:34 </span>
<span class="itemAuthor"> By <a
href="http://www.truth-out.org/author/itemlist/user/48720">Michael
Nevradakis</a><br>
<b><small><small><small><small><a class="moz-txt-link-freetext" href="http://www.truth-out.org/news/item/33275-puerto-rico-s-debt-crisis-greece-isn-t-alone-in-struggling-against-austerity">http://www.truth-out.org/news/item/33275-puerto-rico-s-debt-crisis-greece-isn-t-alone-in-struggling-against-austerity</a></small></small></small></small></b><br>
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<p>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.</p>
<p>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.</p>
<p><strong>Michael Nevradakis: Share with us a brief history of
the colonial exploitation of Puerto Rico.</strong></p>
<p><strong>Déborah Berman-Santana:</strong> 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.</p>
<p>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.</p>
<p>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.</p>
<p><strong>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.</strong></p>
<p>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."</p>
<p>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.</p>
<p><strong>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?</strong></p>
<p>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.</p>
<p>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.</p>
<p><strong>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.</strong></p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><strong>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?</strong></p>
<p>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.</p>
<p><strong>What has been the impact of "foreign investment" in
Puerto Rico, and how has this also impacted local business and
industry?</strong></p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><strong>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?</strong></p>
<p>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.</p>
<p>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.</p>
<p><strong>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?</strong></p>
<p>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.</p>
<p>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.</p>
<p><strong>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?</strong></p>
<p>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 <em>not</em>
associated, <em>not</em> free and <em>not</em> 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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><strong>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?</strong></p>
<p>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.</p>
<p>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.</p>
<p>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?"</p>
<p>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.</p>
<p>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 <em>possibility</em> 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
<em>are</em> a Latin American country. There is a saying in
Latin America that the independence of Latin America is <em>not</em>
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.</p>
<p><strong>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?</strong></p>
<p>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.</p>
<p>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."</p>
<p>"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.</p>
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