Puerto Rico: A Solution without Washington

By: Carlos Gallisá / Source: Claridad / The Dawn News / May 11, 2016

Puerto Rico’s fiscal problem has both an economic and a political side. Washington’s rulers and the local ones made a huge mistake by not acknowledging that the political situation is what generated the crisis. Denying the political element in a potential solution means falling again to apply policies as “patches”.

Regarding the strictly economic area, the solution lies in promoting the economy, making it grow, with the sights set on translating that growth into development, overcoming dependency and establishing the basis of our own livelihood. Growth can mean more money and, therefore, it can mean easing the fiscal problem so that the government has more resources to fulfill its obligations.

The next question is: how can we achieve the growth of our economy? At this point, we can’t escape the political discussion, which many people often pretend to ignore. If Puerto Rico has no control nor authority over the main elements operating in the island’s economy, how can it create incentives and make its economy grow? Many may answer that there was a growth during the 50s and in the years of “the 936”(1), and then, the economic powers that we are claiming as necessary for an economic growth in 2016, did not exist.

To answer that question, we must begin by establishing that the 50s and the years of “the 936” were the only periods of economic growth in the 118 years of US colonial domination. But even when combined, both periods amount to less than 20 years. Those were two unique moments due to the circumstances and the political juncture. In the 50s, the world was going through the end of the Second World War, most of the planet was destroyed, there was no competition with the Asian countries that were in the 5th world, Europe was devastated and the accumulated great capital in the US was looking for investments.

Read also:
Brazil's new foreign minister believes climate change is a Marxist plot

Puerto Rico’s economic growth was in the US’ best interest when the Cold War began. They needed to present the colony as an example of how beneficial it was to be allied to the US. There are many who say that “Operation Bootstrap” was designed by the Yankee intelligence. Still, the key element of the economic growth during the 50s was the expelling of half a million boricuas to the North. There was no doubt that, back then, the North American stars and those who managed the colony were aligned. Let’s not ignore that the main objective of this alignment was destroying the independentist movement that had become the second electoral party by 1952, not to mention the nationalist insurrection of 1950. Now, there is not alignment of the stars. There is no Cold War, not geopolitical and military strategic interest, due to the technological changes in the war arsenal.

Another time of growth, the second and last, was the one of the 936 corporations that were established in the island since 1976. The project of the 936 was approved in the Congress, obeying the US needs of repatriating the thousands of million of dollars deposited in banks outside the country. That money was needed back in american territory to promote the yankee economy, which was in difficulty. Allowing the companies to bring back their earnings without paying taxes was the incentive to re-entering that capital. Puerto Rico was not involved in the formulation of “the 936”. By extension, we were benefited when the law established that the capital that was being repatriated should do it through the territories.

Read also:
Violence in the Capitol, Dangers in the Aftermath

To sum up, none of the factors that promoted the above-mentioned growths are now present. Nor is there a new and great national interest of the US, geopolitical or economic, that could even tangentially benefit us to promote our island’s economy,

Our present is the result of a past that can no longer be hidden under the false discourse of “the best of both worlds”, the fiscal autonomy and all the “common” things. The political issue is the one causing the crisis in the economic side of the problem, and it’s exacerbated by the irresponsibility of those that have administered the colony.

Acknowledging that we are facing a structural problem, and not a cyclical one, as the current administration did by accepting the Krueger Report(2) is a step forward —despite the elusiveness with which is done—. We have to work together on both sides of the equation. The most immediate step is the economic one, but with a view to the future. Along with the management of the crisis we should have a future vision, a project for the country. What Washington is proposing to us with its Fiscal Control Board is a mechanism that only seeks to guarantee the payment of the debt, not caring about what the fulfillment of that payment will cause in the lives of Puerto Ricans.

Contrary to what’s said about the “colonial consciousness”, the problems generated by trying to pay the debts are much bigger than not paying. Because of that, the only way out is non-payment, to force a reconstruction that can lead to a reduction of debt by not less than 50%. We only lack the courage to do this and we can do it without Washington’s deplorable intervention.

Read also:
EU coronavirus recovery package is massive shift for bloc that will work 'wonders'