Puerto Rico ‘at a crossroads’ as economic crisis takes toll

NEW YORK – Father Enrique Camacho has family in Puerto Rico who are doctors and nurses and still work three jobs to make a decent income. Others in the industry, he said, emigrate to the mainland where they can work less hours and double their pay, and the same trend is true of other professions like teaching and law enforcement.

As a result, none of those professions are adequately staffed, which is also true of other middle class jobs. In terms of real estate, Camacho said there’s a lot of abandoned houses, and a lot of legacy businesses that have closed. Many people that remain in the Caribbean nation still struggle to get the resources they need to rebuild from the natural disasters of years ago.

“It’s really depressing. The economic situation is really, really bad,” Camacho, the director of Cáritas Puerto Rico, told Crux. “It’s something really difficult to face every day and the biggest problem is that people don’t have hope that things are going to get better.”

The White House on Friday publicized that Deputy Secretary of Commerce Don Graves met with Puerto Rico Governor Pedro Pierluisi to announce the intent of the federal government and government of Puerto Rico to hold an economic dialogue in Washington, D.C. this fall, to discuss how the two sides can help the United States territory achieve “economic prosperity.”

Graves was simultaneously appointed Puerto Rico’s economic growth coordinator.

Camacho and others, though, remain skeptical of the impact such a meeting will have. He noted that they “see a lot of meetings” that seldom result in change, and that he remains wary that this iteration of the United States Congress can compromise.

Puerto Rico’s Future: “We’re at a Crossroads’

There were signs of hope for Puerto Rico in March when a debt restructuring plan went into effect after years of negotiations between a federal financial oversight board, Puerto Rican government representatives, and creditors. The plan reduced claims against the Puerto Rican government from $33 billion to $7 billion.

The plan came about seven years after the federal government passed The Puerto Rico Oversight, Management, and Economic Stability Act of 2016 that enabled the debt restructuring to take place. At the time, Puerto Rico faced more than $70 billion in debt and more than $55 billion in unfunded pension liabilities.

Just before the debt restructuring plan went into effect in March, Camacho and other religious leaders in Puerto Rico released a joint statement that the nation now has “the opportunity for a path forward, and to forge a comprehensive strategy for recovery and economic development.”

It’s seven months later and it doesn’t appear much has improved, and there aren’t any plans made to steer Puerto Rico towards a more viable economic future.

“We’re at a crossroads,” Eric LeCompte, executive director of Jubilee USA Network told Crux.

“If Puerto Rico receives more economic shocks – natural disasters, the COVID-19 pandemic – without more aid or resources, it’s really going to get much worse,” LeCompte said. “On the other hand, if Puerto Rico gets the resources it needs to deal with disaster relief, child poverty, climate, to be able to support new jobs; if these things move forward not only will it help make Puerto Rico’s debt sustainable, but it will ensure there’s positive economic growth.”

Jubilee USA Network is a faith-based organization that promotes debt relief around the world. Since 2014 it has monitored Puerto Rico’s financial and debt crisis, growing child poverty rates and policy implementation and has advocated alongside Puerto Rico’s religious leaders.

LeCompte said the biggest concern about Puerto Rico is the almost 60% child poverty rate, which should be at the root of any decisions made at the two governments’ fall meeting because “if that’s the summit it can help address all other sectors that are suffering.” He added that there needs to be an additional $50 billion in disaster recovery aid, and an acceleration of the disbursement of the $55 billion in disaster recovery aid that Congress has already allocated.

LeCompte also cited measures to reduce the poverty rate, and to protect the island from climate change as being crucial, as well as providing resources to expand manufacturing jobs and addressing transparency and corruption to “make sure money goes where it needs to go.”

“I’m very concerned about Puerto Rico’s future,” LeCompte said. “There is hope, but there’s also a lot of concern. The clock has been ticking and I think this kind of meeting can help spur some of the actions that need to take place as well as motivate some other stakeholders.”

Puerto Rico’s status as a U.S. commonwealth is another part of conversations on Puerto Rico’s future, as the status prevents it, among other things, from receiving the same tools and aid that states receive around child poverty reduction, nutritional assistance, and Medicaid and Medicare funding.

In an email to Crux, Archbishop Roberto González Nieves of San Juan said that “Puerto Rico needs to be dealt with on an equal footing with and by the Congress of the United States.”

Taking it a step further, Camacho said it’s important for Congress to set in motion the development and eventual presentation of the options for changing Puerto Rico’s status whether that be statehood, independence, or keeping it as a territory with some potential modifications so it can receive more help.

“This situation regarding our status is something vital because people are divided because of what status they decide to be,” Camacho said. “In the meantime, while things aren’t decided it’s really difficult for us to create a project for the future because we are polarized.”

In the end, though, Camacho noted that real change won’t come from Congress or President Joe Biden, but from the will of the American people advocating on Puerto Rico’s behalf.

“It’s not just that we’re having difficulties economically, but it’s that everything is very, very, very, tough for us and people can tell that to their government,” Camacho said. “People can tell their officials: Hey, I voted for you. Help these people. Help these people to decide what they want and help these people grow and to have a better economic situation with their families to have more joy in their lives, to feel more secure in the streets, to have a better education.”

Follow John Lavenburg on Twitter: @johnlavenburg

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