Report On Crisis in Puerto Rico

It may be surprising to some Church of the Brethren members that Puerto Rico, an Island and United Sates’ territory, is a complete church district. The island became a district in 2014, separating from the Atlantic Southeast District. The current District Executive is Jose Calleja Otero. Paul Parker, a member of the Washington City Church of the Brethren, has family in Puerto Rico and visits the country often. In the following paragraphs, he provides information to help us better understand the situation of our Puerto Rican Brethren:

Puerto Rico has been a colony of the United States since 1898. It is an unincorporated territory; its people are U.S. citizens. Colonization has distorted the economic and political life of the country.

Politically: The “status question” has distorted politics. The three main parties are all defined by their position on status for the island: statehood, continuation of the Commonwealth, or independence. The status question of the island has been used by the political parties to mobilize voters and, effectively, to mask the parties’ failures to address the underlying economic problems of the island. Government has been plagued by cronyism, incompetence and corruption.

The commonwealth government was created in 1952, by act of U.S. Congress granting limited local control. Some believed it granted “limited sovereignty” to the island. However, ultimate authority and sovereignty always rested with the U.S. Congress. A U.S. Supreme Court ruling this spring affirmed that ultimate sovereignty abides with the Congress.

Economically: Agriculture has been greatly diminished. The sugar, coffee and tobacco industries have almost disappeared. The island imports about 75% of its food, at significant cost and outflow of wealth. All goods must be imported in expensive, U.S. flag vessels, raising the cost of living. Local industry and commerce have suffered from competition with domestic U.S. producers.

The economy of the island was supported by a Federal law that allowed companies that invested in the island to retain profits tax free, resulting in industrial investment. This law lapsed in 1998, and manufacturing began to close. After the Cold War ended, U.S. military bases closed. Tourism remains the mainstay of the economy. Many people are working hard to preserve the distinctive natural environment and cultural heritage of the island. However, with the 2008 recession, tourism, as well as other economic activity, suffered a major decline. Migration off the island, particularly of people of working ages and their children, soared due to lack of economic opportunity. Population sank from about 4.4 million to 3.4 million, and continues declining. For example, the number of doctors on the island has dropped from about 14,000 to 9,000. This reduced the tax base and left an aging population in need of greater social services. Sixty percent of the island’s children and forty percent of the total population live in poverty. Infrastructure is crumbling.

Faced with the “perfect storm” of dire economics, the Commonwealth, all of its independent agencies, and many institutions and businesses faced massive deficits and bankruptcies. Rather than raise taxes or cut services, political leaders of both of the major ruling parties resorted to deficit funding to pay operating expenses with debt. By 2015, the Commonwealth and its agencies had accumulated $68 billion in debt. Given the declining economy, the debt had become unpayable. The Commonwealth and its agencies were facing default in 2016. While some of this public debt is still held by local pension funds and retirees, a large amount has been bought up by speculators at great discount.

The Commonwealth was due to default on all debt payments on July 1, 2016. This would have allowed the speculators to sue in Federal court. The island faced possible court orders to pay the debt in preference to pension funds and social services. This would have created a massive social crisis.

The U.S. Congress acted in June to pass the “PROMESA” Act in order to prevent a social crisis. The Act was strongly supported by Jubilee, a multi-church organization devoted to debt relief for poor countries. The Church of the Brethren is a member of the coalition, and our Office of Public Witness, and its Latin American committee members, also independently supported the Act.

While a compromise between many parties, the Act has several main provisions: the Act bars any lawsuits by creditors for up to 20 months; it creates a Financial Control Board (called the “Junta” in Puerto Rico); it authorizes the Board to investigate and oversee the finances of the island; and authorizes the Board to negotiate debt reduction with the creditors. It aims to create breathing room to deal with the problem, to reestablish the credibility of the government’s financial management, and to renegotiate the debt in a manner that recognizes the social and economic needs of the populace.

While the “Junta” is resented by many, there seems to be a loss of faith in local officials and a reluctant acceptance of the necessity of the Board if it gives priority to the wellbeing of the populace over the creditors.

What are we to do as Christians and a church? First we must pray, and lobby Congress, that the Board acts to preserve the social wellbeing of the people of Puerto Rico. This is, however, only the immediate need.

A recent certified audit of the Commonwealth finances by the accounting firm of KPMA clearly stated that the island’s governmental and financial structure is simply unsustainable. Beyond debt payment, there is not enough revenue to maintain services, rebuild infrastructure, refund depleted pensions and promote economic development.

Many on the island feel that the current crisis has forcefully demonstrated the need to resolve, once and for all, the status question. There is a growing consensus that the Commonwealth, as a colonial structure, is not working. As one sign read in a recent demonstration, “The problem is not the Junta, it’s the colony.” Resolution, many believe, will require statehood or independence, both of which will require action by the US government.

Again, what are we to do as Christian’s and a church? To improve economic conditions, we must pray for and lobby Congress for the following: an end to the law requiring imports in U.S. shipping; payments for Medicare/Medicaid that equal those in the states; greater aid to education; laws to promote outside investment in the island; oversight of the Financial Control Board. Ultimately, if the island seeks statehood or Independence, we must support that decision and lobby Congress to grant statehood, or financial aid to ease a transition to independence.

In the meanwhile, come on down! The island and its people are as lovely as ever.

In Christ’s Peace,
Paul Parker and Stephanie Robinson

Stephanie works with the Office of Public Witness covering Latin America and is from the Oak Grove Church of the Brethren. Paul is part of the Washington City Church of the Brethren who has family in Puerto Rico and travels there extensively.

2 thoughts on “Report On Crisis in Puerto Rico

  1. Has there been news from Castaner, Puerto Rico following hurricane Maria? There is a Church of the Brethren and hospital there with Brethren connections. My cousin Gandhi Forbes was born and raised there and last I knew was living in the area. News of devastation to the island looks terrible.

  2. Thank you for sharing this website on our status with Puerto Rico. We occasionally hear about it, but not very often. Thus, your commentary here was very helpful. We need to be open to the needs of our Puerto Rican brothers and sisters. The inequity they face, day after day, has been going on for decades.

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