EDITORIAL - Crisis in Puerto Rico
THERE was a time when the island of Puerto Rico was a place to emulate in terms of its economic performance. It was also a vacation spot and shopping centre for many Barbadians who flocked to that island in droves.
Today, Puerto Rico is in the midst of a bleak economic crisis, worse than what the islands of the Eastern Caribbean are experiencing.
Recent reports indicate that the island has US$74 billion in debt and another US$50 billion in pension obligations on the books.
Those familiar with Gordon K. Lewis and his book: “Making of the West Indies” will remember how he saw Puerto Rico as part of the family of Caribbean nations, never mind it being a USA territory.
The concept of industrialisation by invitation was one of those development planks that had its origins in Puerto Rico. The so-called Section 301 programme – which helped to push investments across the English-speaking Caribbean – originated in that island, and so too was “Operation Bootstrap”, another investment concept.
When in the 1980s the bottom fell out of the Trinidad and Tobago export market for Barbadian goods, some businesses here looked to Puerto Rico as a kind of saviour, although not many were successful in penetrating the market of that country.
Many Barbadians never lost an opportunity in going to the island on vacation and to shop. So significant was this, that the summer months and in December in the 1990s, one could hardly find space on flights which American Airlines, BWIA (now Caribbean Airlines) and LIAT put onto that route. Nowadays, the majority of Barbadians are going to Miami, New York, Atlanta and other places on mainland USA.
There is a trickle of people from here going there. For most of them, the connection is via the Carnival Cruises, which have the island as part of their itinerary.
Puerto Rico is also part of the Caribbean Tourism Organisation (CTO) and as an International Business Centre, hosts annual conferences attended by representatives from this country.
The island now faces significant challenges. The economy is not growing and has not been doing so for a long time. It has a population of about 3.5 million people – and only about one million of them are employed. Obviously, not all of them are old enough to work or are looking for a job, but Puerto Rico's unemployment rate topped more than 12 per cent, according to a recent report, and is more than double that of the mainland US.
It is like another small island being left to fend for itself, even though when it is considered the 51st state of the USA this ought not be happening.
We in the Caribbean do have a debt problem as well. A few of the countries have debt to GDP ratios in excess of 100 per cent on account of run-away borrowing to finance
consumption and Government operations. They have started to tackle this issue, which calls for enormous belt tightening and other sacrifices.
It is not an easy process to go through. Like those who have gone the route of restructuring and reforming their public finances, this may be the way out for Puerto Rico.