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by Manuel Francisco O’Neill
How they got there from here
Imagine if you would—that you live on a tropical island, 100 long by 35- miles wide, that must import 85 percent of its food from other countries despite its competitive advantage—the result of its abundant sun, favorable climate, fertile soil, abundance of rainfall, land ownership patterns, tourist economy, and food demands of its 3.4 million willing consumers. This is the case with Puerto Rico, a US unincorporated territory since 1898, when Spain ceded the island to the US for war indemnities it incurred during the Spanish-American War.
During the initial and early years of US colonialism, 1989-1924, the US island administrators devalued the Puerto Rico currency by 40%, imposed import tariffs on Puerto Rico products entering the US, which made Puerto Rico agricultural non-competitive, as well as imposed taxes payable in US currency in order to run its colonial government. The Puerto Rico currency devaluation, the loss of Puerto Rico’s free access to Spanish markets, and the ensuing cabotage legislation by the US Congress contributed to the demise of Puerto Rico’s agricultural economy. The cabotage legislation, referred to as the Jones Act, required that all goods entering or leaving the island had to be transported in US shipping vessels manufactured in the US, loaded by US workers, and embarked and disembarked from US ports. This dramatically raised the costs of imported goods from the US, and exacerbated an already growing farm crisis that caused farmers to abandon or sell their land holdings, rural inhabitants to flee to the urban centers of Puerto Rico and the US in search of work, and accelerated the consolidation of farmland into the hands of US industrial sugar producers.
In 1952, the US granted Puerto Rico commonwealth status, and limited home rule in internal affairs in order to comply with the United Nation Founding Charter’s mandate to grant self-governance to non-governing territories, and Peoples. The legitimacy of the US’s claim of compliance with the UN Founding Charter is a matter of continuing contention, and annual review by the UN Committee on Decolonization.
Factories and food stamps
Throughout the 1930-1960’s successive Puerto Rico Commonwealth government administrations of both governing parties, Populares (PDP) and Estadistas (PNP), pursued development strategies that: encouraged imports from the US; favored the industrialization of the economy at the expense of agricultural production; and lured US investment capital to the island by offering US corporations an educated low-paid workforce, lax environmental regulations, the construction of government-financed infrastructure projects, and US and Puerto Rico “tax holidays” on profits earned in Puerto Rico.
Arguably, Puerto Rico’s economy grew during the early stages of US colonialism (1950-1980s) with poverty rates declining, infrastructure and institutional capacity expanding and modernizing, and the Puerto Rican workforce experiencing a higher standard of living and levels of education. But, these achievements came at a price— Puerto Rico by the early 1980’s soon produced what it did not consume, and consumed what it did not produce. As a result of the long term failure of these policies, Puerto Rico would again experience a rise in its poverty indicators I.e., unemployment, underemployment, persons and families living below the national poverty level, and the numbers of households eligible for federal benefit assistance. The island also experienced a rise in crime rates, and incarcerations associated with violent and drug related arrest . But, throughout the “good and bad times” Puerto Rico grew to become. One of the world’s largest importer of US goods, paying sometimes as much as 20% more for the goods because of the Jones Act era’s cabotage laws, and returned to the US more wealth in the form of US payroll taxes, corporate earnings from imports, and cabotage fees than received by Puerto Rico from the US government in the form of funds transfers and entitlement payments.
The perfect storms
The “competitive advantage” enjoyed by Puerto Rico soon gave way to the realities of globalization as US corporations sought greener pastures and more lucrative production platforms in other parts of the developing world. The decades of the 1980’s onward hit Puerto Rico’s economy hard. The US in the midst of its own recession, Savings and Loans (S&Ls) debacle, as well as farm crisis began to deindustrialize its economy and witnessed a large numbers of farm consolidations, corporate mergers, and the “de-tooling” of its manufacturing sector by US corporate raiders, who looking for quick returns on investments, bought failing companies in order to divest the companies of its assets and worker retirement funds. US corporations—soon fled the US, as well as Puerto Rico in search of less expensive manufacturing platforms, and as was the case in Puerto Rico— the US Congress announced that it would end the federal tax legislation that had assured US corporations tax holidays on profits earned in Puerto Rico, and it also reduced US entitlement payments to US citizens living in Puerto Rico.
By early 2007, the loss of US corporate investments, the reduction in federal entitlement payments, and the absence of spending and revenues from a downsized manufacturing and disadvantaged agricultural sector contributed to even higher unemployment rates in both the private and government sectors, a drop in economic growth, and a heavy reliance on borrowing from US individual and mutual fund investors to finance the Puerto Rico Commonwealth operating budget, as well as meet the societal needs of its residents. Investors were guaranteed bond rate returns as high as 8%, that the Commonwealth government’s constitution prevented it from defaulting or filing bankruptcy on the bonds, that the bonds were secured by future government tax revenues, and that investor profits would be free of all Puerto Rico, as well as US local, state, and federal taxes. Puerto Rico would eventually owe US individual and mutual fund investors, a large portion held by retirement funds and US municipalities— a total of $74 billion dollars. Some have suggested that when money owed to Puerto Rico retirees, and pension funds is included that the actual Puerto Rico debt hovers near $124 billion dollars— dwarfing in either case the amount owed by Greece to its European major creditors.
Unable to meet its debt payments and government operating expenses, the government of Puerto Rico declared its inability to service its debt in 2016, and attempted to restructure its debt payments, an action deemed unlawful by a US Federal Appeals Court. Hoping to limit their losses some private and municipal Puerto Rico bondholders sold their bond shares at a loss to US “vulture capitalist” who would later demand full payment on the bond’s face value.
The US Congress and the President Obama administration in an effort to avert a potential US bond market crisis, assure Puerto Rico’s ability to service its debt, delay legal actions being threatened by the vulture capitalist, as well as respond to demands from within Puerto Rico and the Puerto Rican diaspora for a guarantee that vital services would not be interrupted, and demands for an outside audit of the Puerto Rican debt— enacted the PROMESA legislation which established a Puerto Rico Fiscal Control Board. The Fiscal Control Board assumed financial authority and oversight over government prioritized spending and budgetary matters, and imposed austerity measures that have resulted in schools and hospitals being closed, massive funding cuts to the university system, government workers being laid off, retiree pensions and youth hourly wages reduced, municipalities consolidated, and vital services and properties privatized or sold. The imposition of the Fiscal Control Board by the US Congress, again put into question the US’s compliance with its treaty obligations under the UN Founding Charter.
Just when you think it can’t get any worse, it does
In September and October of 2017, Hurricanes Irma and Maria made landfall in Puerto Rico and the Caribbean. The devastation in Puerto Rico was widespread, and delivered a nearly “knockout punch” to the island’s inhabitants and economy. Nearly all of the island’s electricity grid was destroyed, highways, bridges, and communication systems were severely damaged, many residents lost all or major portions of their homes, schools and hospitals were unable to open, and tens of thousands of workers were unable to return to their former workplace. Environmental contaminants released from at least two designated Superfund toxic waste sites impacted the island’s water supply, and air. Deaths associated with hurricane occurrences are estimated at more than 1,000, and incidents of hurricane related suicides have increased dramatically, as has the number of reported murders. The nascent food sovereignty movement was also setback as farmers woke up the “morning after” to find their farm land eroded, farm equipment and structures destroyed, and fruit and vegetable crops flooded, submerged under contaminated water or blown away.
The US government’s response was delayed, and unenthusiastic on the part of the Trump administration, as well as poorly coordinated and implemented. Recovery and infrastructure reconstruction contracts were in some cases awarded to outside sources without bids, performance criteria or recourse to redress. As was the case in New Orleans after Hurricane Katrina, opportunist and profiteers of disreputable reputation journeyed to Puerto Rico to “make a quick buck” at the expense of Puerto Ricans, who in the midst of a major debt crisis, were already fighting off the bond vulture capitalists looking to collect on their purchased debt.
Vermont and other states response to the economic and environmental crisis in Puerto Rico
Many first-hand witnessed accounts, as well as news accounts by leading news outlets have testified to the heroic response, and mutual aid rendered to their neighbors by Puerto Ricans in the aftermath of the 2 hurricanes.
Throughout the US thousands of individuals, and groups representing artist, tradesmen/women, musicians, businesses, as well as others others from all sectors of civil society responded generously to the immediate need for food, water, building materials and worker brigades, food seeds, generators, solar panels, medicine, clothing, beds and mattresses, as well as cash donations to assist with recovery efforts. Some members of Congress demanded legislation targeted at the Puerto Rico’s debt crisis, as well as legislation that would expand the recovery efforts and funding levels for the victims of Hurricane Irma and Maria, and for the victims of the devastating fires in California.
In Vermont community response to the crisis in Vermont was swift, intentional, targeted, and enduring. Vermont’s Congressional delegation worked in both the House and Senate to demand from the leaders of both chambers immediate action to resolve the Puerto Rico debt crisis, and to accelerate the rescue and recovery efforts in Puerto Rico. Senator Sanders introduced in the Senate major legislation focused on debt relief and the sustainable recovery of the islan’s recovery. The legislation called for assistance to farmers in order to achieve food sovereignty, the use of alternative energy technology when rebuilding the island’s electricity grid, the reconstruction of the island’s road and bridges infrastructure, the securing and management of the island’s toxic waste sites by federal agencies, and funding assistance for home reconstruction of damaged homes— to list only a few of the legislation’s most salient provisions.
Closer to home— volunteers and businesses have sent seeds, gardening materials, medical and food supplies, as well as water and clothing— funded in part by benefit concerts, donations, and bake sales conducted by individuals, as well as local community groups and organizations.
The Hardwick Buffalo Mountain- Puerto Rico Cooperativa Madre Tierra Sister Coop Project
The goals of this sister coop relationship is to assist in the farm recovery efforts underway in Puerto Rico by organizing farmer skills exchanges and work brigades, as well as raise money for farm recovery projects and expansion. As Buffalo Mountain Coop members and Vermonters we are intimately familiar with the lead role that agriculture, and aligned business play in stimulating and expanding economic growth within the other sectors of our economy. And, within the coop’s membership “rolodex” are the names of farmers, food and social activist, and others who helped forge a local food system, revitalize the agricultural sector in Vermont, and inspire a national food movement. What was accomplished was accomplished through hard work, shared vision, purpose, and determination, and with a sense of justice—– values equally present in our neighbors and compañera/os in Puerto Rico who need our help during this critical time in their lives and struggle for self-determination. So like the mountain climber who when asked why he climbed Mount Everest quipped “because it was there,” we too respond to a neighbor in need because that is what we always do– in order “to get there from here” together.