Puerto Rico’s Economic Demise is the Fault of the U.S. Federal Gov.
January 6, 2017 Kristance Harlow
Puerto Rico is experiencing a huge economic crisis. The population is declining in response as people leave the archipelago in a financial exodus. Eric Platt reported in the Financial Times that the $110 billion debt suffered by the commonwealth “has prompted one of the largest migratory movements within the U.S. in decades.” In the last 10 years, the population of Puerto Rico has dropped by 9 percent.
On Monday, Puerto Rico’s new governor was sworn into office. Governor Ricardo Rosello announced that he would hold an immediate referendum to finally push the island towards either statehood or independence. It’s not a new concern, but with the devastating economic crisis entering its second decade, the statehood movement has a new sense of urgency.
The federal government has a fallback plan for states that fall into dire economic straits: bankruptcy. Chapter 9 bankruptcy is an option for all 50 states and their respective municipalities. Chapter 9 protects municipalities from creditors, prevents the liquidation of their assets and aids in the implementation of a plan to resolve the outstanding debt. In 1984, Congress made changes to the federal bankruptcy code to bar Puerto Rico’s access to these financial safety measures.
Without access to federal bankruptcy protections, Puerto Rico attempted to implement their own. In 2016, the United States Supreme Court told Puerto Rico that it does not have sovereignty. Sovereignty is what gives individual states their right to self-governance, it allows for the political division between federal and state governments, and is protected under the 10th Amendment to the U.S. Constitution.
Shortly after the Supreme Court decision, Congress passed a small package meant to provide some relief. They created a new, albeit temporary, Super Chapter 9 allowance so Puerto Rico could bring down its debt. But the legal protections are due to expire in early 2017, and without a complete bailout, the problem is unlikely to go away. This is significant in terms of Puerto Rico’s growing debt, because federal law prohibits them from actually declaring bankruptcy.
As once declared by the Supreme Court, Puerto Rico is “foreign in a domestic sense.” If that sounds bizarre, it’s because it is. In practice, Puerto Rico is essentially a U.S. colony. A colony, or quasi-colony, lacks the sovereignty necessary to create independent laws such as the ones Puerto Rico attempted to create to address its economic problems. It can’t break the chain of command set forth by the Constitution, not even via separate laws — such as is the norm in every official state. Yet it is not given the same protections promised by the Constitution because of its political status. Residents of Puerto Rico cannot even vote for President. To understand the ways in which the U.S. has repeatedly abused Puerto Rico, we must look back at the history of U.S. relations in Latin America.
It All Started With A War
Prior to the late 1800s, intervening in foreign affairs was strictly against American policy. Military and trade were the touchstones of policy decisions. The short-lived Spanish-American War of 1898 was fought in the Caribbean. The history of the conflict is complex, but a desire for military expansion was part of the equation. In 1890, based on an argument championed by a leading foreign policy influencer, the U.S. decided to expand the Navy to dominate the seas. To do so, they had to take over colonies in the Caribbean.
The U.S. would involve itself in Latin American affairs only when it benefited domestic interests. According to Anthony Maingot, a professor at Florida International University who specializes in the anthropology of the Caribbean, “…claims to reciprocity and equivalence … are … rhetorical façades hiding gross or subtle domination and exploitation.” Such as in 1903, as Panama sought independence from Colombia. The U.S. immediately vocalized support for the move, which hurried along the negotiations. Thus, the U.S. gained sovereign rights over the plans to the Panama Canal.
When Spain seceded Puerto Rico to the U.S., Cuba owed Puerto Rico around $400 million, but instead of collecting on that debt, the U.S. government ruled that money-lending by colonies was invalid. The U.S. sacrificed the economy of Puerto Rico because maintaining positive relations with Cuba was a higher priority.
The U.S. gained strategic geographical dominance over Central America and the Caribbean after it secured Puerto Rico, including the Panama Canal and the still-controversial Guantanamo Bay. This was in the beginning of the 1900s, when the U.S. was experiencing a strong renewal of nationalism and the beginning of U.S. intervention in the region.
Foreign affairs have long been framed by an ideology of American moral superiority. This extreme ethnocentrism was used by Theodore Roosevelt to justify U.S. military intervention and “policing” of “barbarous” states by the “civilized” United States. When Woodrow Wilson took office, he became the self-appointed policeman of the Caribbean, and Wilson’s policies set the precedent for U.S.-Caribbean policy well into the 1920s. His administration moralized U.S. actions and zeroed in on strategic interests. Intervention in foreign affairs was now framed as a moral obligation.
There was a glimmer of hope when Franklin Roosevelt implemented the Good Neighbor Policy. Roosevelt described it as “the neighbor who resolutely respects himself and, because he does so, respects the rights of others.” It was an attempt to reduce the use of intimidation and increase cooperation with the Caribbean and Central America. In theory, it could have fostered a more respectful understanding of Latin American rights and sensibilities, but the focus on U.S. strategic interests made it impossible for this policy to work.
The only real changes that occurred in U.S. intervention during the first two-thirds of the 20th century were rhetorical techniques; the public relations policy was tweaked. While U.S. international affairs were no longer based on expansionism, they continued to be controlled by the still prominent dualistic ideology of us versus them. Each President who tried to present a new method of intervention could not solve for the asymmetries that characterized U.S. relations with other countries.
Along Came Cuba
Puerto Ricans were granted U.S. citizenship in 1917 so they could be drafted to fight in World War I. In 1943, the military wanted to take U.S. troops out of the Caribbean and use Puerto Ricans to man those operations. Giving Puerto Ricans jobs that were previously held by mainland Americans wasn’t a move to promote representative equality. It reinforced oppressive policies by sending Puerto Ricans to all the places they didn’t want to send white Americans.
At the time, Cuba was dealing with Gerardo Machado, the president turned dictator, from 1925 to 1933. When Machado was ousted in Cuba during this time, it seemed like a victory for the people of Cuba — until a month later, when U.S. military forces came to Havana. The U.S. had significant financial interests tied up in Cuba that Machado had safeguarded, so the U.S. backed a man named Fulgencio Batiste. Batiste ruled twice, first taking office by force from 1933 to 1944 and second as a violent dictator from 1952 to 1959.
The U.S. stopped all diplomatic relations with Cuba, not because of Batiste, but because Fidel Castro overthrew him. When Castro seized power in 1959, the U.S. had over a billion USD assets in Cuba. Castro promptly nationalized all that money and the U.S. implemented massive sanctions. Maingot explains that “…U.S. interventions in the Caribbean … not only [did] no good, they … left [those] states with less sovereignty and worse governments.”
Today, Cuba and the U.S. are seeing the dawn of a new era as diplomatic ties are opened between the two countries for the first time in half a century. Puerto Rico is being stonewalled by a U.S. Congress that refuses to grant them debt relief while Cuba is seeing its economy grow. When we deny access to the rights and responsibilities of the majority while prohibiting self-determination by the minority, this is what happens. Many of the troubles faced by Puerto Rico, and other Caribbean territories and countries are the result of more than a century of U.S. intervention in the Caribbean and Central America.
Originally published on Wear Your Voice Mag.
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