The cure for Puerto Rico is independence

Since 2010, Puerto Rico has lost almost twice as many people to migration to the U.S. mainland than in all of the 1980s and ’90s. Such an exodus might come as a surprise to some. But Puerto Ricans have very good reasons for leaving the Caribbean island and its beautiful beaches for the cold weather and concrete jungles of Chicago or New York City. High unemployment, cuts in education funding, high rates of HIV infection and dependency on welfare programs have convinced more and more islanders to look northward.

The financially troubled island now says it is unable to pay an estimated $72 billion debt, casting a pall on bond markets and pension funds. On the surface, Puerto Rico’s debt crisis is one of run-away spending on public welfare, with a diminishing small tax and economic base to support it. However, the island’s troubles are also tied to its commonwealth status: Puerto Rico is part of the United States but it lacks the local autonomy afforded to other U.S. states and electoral representation in Congress.

It is finally time for Puerto Rico to break free. Independence would allow Puerto Ricans to directly address their economic woes, but, perhaps more important, it will grant the island’s 3.5 million inhabitants the right to determine their own destiny. On July 9, the U.S. Court of Appeals in Boston ruled that Puerto Rico couldn’t restructure its own debt. Puerto Rico’s status as a U.S. territory bars the island from requesting bailout funds from other development banks. Independence, nationalists argue, would allow the commonwealth to make these and other autonomous choices. 

For too long, Puerto Rico’s status quo advocates in government have heralded that tax incentives to the commonwealth as boosts for economic growth. But it’s a rigged system where profits made on the island are transferred back to the mainland, nationalists have maintained. In fact, in 2011 it was reported that as much as $1.38 trillion in corporate revenues from Puerto Rico were pirated away to places such as the Cayman Islands. And that this makes it more difficult for natives to complete.

“While the big business of the U.S. is growing in Puerto Rico, small businesses have to close,” Puerto Rican independence activist and one-time political prisoner, Elizam Escobar, told me in a phone interview. “Corporations are making more profit and the native economy can’t survive.”

U.S. laws have also undermined Puerto Rico’s global competitiveness. For example, the Merchant Marine Act of 1920 prohibits non-American ships from carrying goods between the island and U.S. mainland, which hinders growth by raising transportation costs and making it too burdensome for the island to have import-export relationships with other countries. In fact, both the editorial board of the New York Times and the conservative Heritage Foundation agree the regulations for Puerto Rico should be relaxed. Yet previous attempts to pass reforms in Congress have failed.

Puerto Rico also suffers from corruption. Last year, 16 police officers pleaded guilty to narcotics racketeering. The commonwealth’s political leaders have also been historically ineffectual, since real power rests with the federal government. 

Furthermore, despite the belated media interest, Puerto Rico’s economic problem has been brewing for some time. The last 20 years have seen more manufacturing and tourism diverted from Puerto Rico, which is party to NAFTA and other U.S. free trade agreements, to other Latin American economies, and attempts to stem that flow have been ineffective. The manufacturing sector shrank by 4.5 percent from 2007 to 2012. And its unsustainable economic model has caused problems before. In May 2006, the government was forced to shut down for two weeks due to a $740 million budget shortfall, leaving 100,000 workers out of work.

Meanwhile, poverty has continued to define the island. While the entire U.S. suffered in the wake of the 2008 financial crisis, Puerto Rico was hit worse. Unemployment still hovers above 13 percent and a third of the island is on food stamps. “In the U.S. they have a cold, in Puerto Rico we have pneumonia,” Escobar said.

Austerity on the island has led to increased protests over the years. In 2009 authorities terminated nearly 25,000 government employees to cut spending, prompting street protests. In an attempt to shore up revenue, the government imposed a 50-percent increase in university fees, leading to high-profile student strikes in 2010 and 2011 that resulted in hundreds of arrests.

Fleeing the island is not a solution, independence activists say. But Puerto Ricans with job skills and means to leave have been voting with their feet. In 2014, Puerto Rico saw the biggest drop in its population since World War II. The debt crisis is likely to worsen the trend. The island's population is projected to drop to 3 million by 2050.

Political options for Puerto Rico remain limited. Statehood is still a pipe dream: Republicans in Congress would never allow the 29th largest territory to be a majority non-white, debt-burdened island of Spanish-speakers. And while previous plebiscites have shown that independence remains unpopular among many Puerto Ricans, activists contend that the deteriorating living conditions on the island will lead to unrest and further influx into the United States.

Congress has largely ignored calls for reconsidering Puerto Rico’s status. But the deepening political and economic turmoil may now change that. Puerto Rico’s fate is also likely to generate interest in the run up to the 2016 presidential elections. Some candidates have already commented on the bankruptcy plans to the ongoing crisis. A spokesperson for Florida senator and Republican presidential hopeful, Marco Rubio, whose state is home to many Puerto Ricans, said, “He’s in the process of reviewing the [bankruptcy] legislation to make sure it is the right approach to begin addressing Puerto Rico’s debt crisis without having any negative impact on American taxpayers.”

For decades, Washington treated Puerto Rico’s independence activists as fringe outfits and associates of radical insurrectionist movements. And activists have been hobbled by a public fear that shedding relationship with the U.S. would invite more trouble into the island. As a result, the Puerto Rican Independence Party, for example, has only one member in the commonwealth’s legislative assembly.

After all, the federal government handles Puerto Rico’s basic services, such as the mail and its welfare system. A new nation would have to build all these agencies and develop a new currency from scratch. Yet, they’re not alone: From Greece to Scotland to Catalonia, anti-austerity politics across Europe is increasing support for greater national sovereignty.  

But Javier Nieves, an independence activist and one-time state assemblyman in New York, hopes that independence will become the only viable option, as the status quo becomes more untenable. He contends that an independent Puerto Rico could still maintain a trade relationship with the U.S. mainland, but on San Juan’s terms. Nieves believes the notion that creating a new nation is too risky or arduous is a patronizing position, a product of a colonial mentality that keeps Puerto Ricans from aspiring to manage their own affairs.

“That’s looking at people who are incapable of governing themselves,” Nieves told me on June 8. “Of course, there will be birth pains, but we'll be on the road to fixing our problems.”