Amid Puerto Rico’s economic collapse, a crisis of leadership

SAN JUAN, Puerto Rico — An engineer, a retired stockbroker, a media personality and a prizewinning bullfighter are among those sitting at Kasalta, a popular Ocean Park spot where regulars gather each day to catch up on life over Cuban sandwiches and cafes con leche (or, at least for the bullfighter, a snifter of brandy).

Perhaps it’s the poster of Barack Obama’s surprise visit in 2011 — where he lunched with then-Sen. and now-Gov. Alejandro García Padilla — or the slightly more distant memory of Hillary Clinton greeting patrons in 2008 during her presidential campaign, but it’s easy to get the midday crowd talking politics.

Specifically, how they think the island’s $72 billion debt crisis — exacerbated on Monday when Puerto Rico’s government defaulted, for the first time in history, on a $58 million bond payment — will affect voters in Puerto Rico’s 2016 elections.

There is no shortage of policy items for candidates to tackle: How to create jobs and spur growth in an economy in which unemployment is close to 13 percent and only 40 percent of adults participate in the labor market. What’s on and what’s off the table when it comes to the recent government-commissioned report that recommends eliminating the minimum wage, bringing worker benefits in line with the U.S. mainland and reducing subsidies for the University of Puerto Rico, among other austerity measures. How to stave off a looming health care crisis, stem massive outmigration, fix inefficient public utilities and trim a bloated government bureaucracy.

However, the only debate that is certain to be sharpened is the 100-year-old one over political status.

“I think it’s going to polarize the island,” TV producer, blogger and dating coach Tirzha Alcaide said of the economic crisis. “If the pro-statehood bunch don’t see the United States give us a hand to help us dig out of this hole, they may shift [toward pro-independence].”

“You can’t promise statehood to a country the United States has turned around and disregarded,” she added.

Puerto Rico has remarkably high voter turnout — much higher than on the mainland — even more exceptional, given that its residents cannot vote for president. In 2012, 78 percent of eligible voters in Puerto Rico turned out on Election Day, compared with 58 percent in the U.S. mainland.

Also unlike the mainland, where Democrats and Republicans vie for voter support, Puerto Rico is divided among the Popular Democratic Party (PDP, or reds, which supports commonwealth status and resembles the Democratic Party, despite the color association), the New Progressive Party (NPP, statehooders or blues, which tends to align with the Republican Party) and the Puerto Rican Independence Party (or greens, which received less than 6 percent of the vote in the last elections). In other words, the question of political status defines Puerto Rico’s political parties.

So despite the urgency to revamp an economy, which has been contracting for nearly a decade, and resolve the island’s crushing $72 billion public debt, voters don’t see either side offering solutions.

“The thing is we don’t have a leader in any of the parties. There is not anybody who we can look up to,” said Milton Cofresi Jr., a retired stockbroker.

If that seems like a lot of pessimism for a group of leisurely lunchers, the analysis from political and economic insiders is hardly rosier.

“Everything is too tainted in political parties here,” said economist and lawyer Heidie Calero, the president of H. Calero Consulting Group. “We need to focus on a direction. We can discuss all you want about political parties, whether it’s going to be commonwealth or statehood or independence. That may be just one lane. But let’s agree on [an] economic plan. Unless we do that, the economy is not going to grow.”

Calero wants to see the parties and government branches work together — rather than on separate paths — to devise policies for labor, health care, welfare and education reforms. 

“Leadership, leadership, leadership,” she said. “I cannot stress that enough.”

Manolo Cidre, a Cuban-born businessman and the president of Los Cidrines bread and pastry company, is considering a run for governor in 2016 simply to shift the conversation away from political parties and to pressure political leaders to discuss the critical details of management and administration of the island.

“You will see the reds, the blues, the greens telling the same — what and not how,” he said. “Let’s talk about what we’re going to do and how. How do you reduce the shape of government? How do you reduce the benefits to be a legislator or governor of this island?”

“It’s an opportunity to change the message,” he said. “I know I am not going to win. It’s not difficult to understand that. It’s difficult to fight against the parties. It’s difficult to fight against the structure.”

As for who will win and lose in the elections 15 months from now, political analyst Jay Fonseca sees the PDP “losing by a landslide” — a widely held prediction.

“Our last three elections have demonstrated that our people use their vote to punish more than to guide our country,” he explained.

But there are several important variables, he noted. For one, Padilla might not seek re-election. Although it’s unlikely, that could leave the seat up for grabs, especially with the NPP divided among three candidates.

But the biggest unknown, Fonseca said, is how Puerto Rico’s massive outmigration — a net loss of about 50,000 a year from a population of 3.5 million — will affect the elections.

“Our problem is that our island is being emptied. That’s something new,” he said. “Of course, we’ve had many migrations in our history, but this is the first time in a short period of time that [so many] people are fleeing the island.”

He expects polling results in the run-up to the election to fluctuate, depending on the demographics of which residents stay. While older voters tend to vote for the PDP, Fonseca said, the NPP tends to win when its voters show up — much as Democrats’ strong participation in the 2008 elections gave Barack Obama the presidency.

“It’s a tossup right now to make predictions, because we don’t know how many Puerto Ricans are going to leave,” he said.

“I think the mood is about uncertainty,” said Carlos Díaz Olivo, a political analyst, Univision commentator and law professor at the University of Puerto Rico. “No one here is sure about what’s going to happen. There is a lot of doubt about the future of Puerto Rico, what the United States is going to do with us. People are thinking if they are going to stay here on the island or if better … they move to the states.”

As for the political parties, “they are also lost,” he said.

At Kasalta, engineer and lunchtime regular Victor Suarez agreed.

“People are going to vote for a change because you have to vote for a change. But there is no big difference between one [party] and the other,” he said. “It’s like, how do you like your martini?”