Puerto Rican governor Pedro Pierluisi dressed Puerto Rico as “a magnet of opportunity” to seduce foreign investors into believing that the island, devastated by natural disasters and on the brink of collapse due to fiscal irresponsibility and corruption, was stable and open for business.
Yet, the island Pierluisi is selling is one few Boricuas recognize as the one they live in.
“After more than a decade of fiscal challenges, natural disasters, and a global pandemic, our island has emerged stronger than ever,” Pierluisi assured the audience at a conference dubbed PRNOW, celebrated last week in New York at Wall Street Cipriani, the high-ceiling banquet hall of the one percent.
“Following the adoption of innovation as our north star, fomenting the entrepreneurial spirit, guaranteeing a stable and transparent commercial framework and launching our reconstruction efforts, Puerto Rico has become a magnet for economic activity,” he said.
According to Pierluisi, the economy’s growth is due to three main factors: federal funds for reconstruction and recovery (including COVID federal funds), manufacturing and tourism.
It’s Mostly Smoke and Mirrors
What Pierluisi should have said was that less than a year after tentatively emerging from bankruptcy, he and top leaders of his pro-statehood Partido Nuevo Progresista (PNP) are desperate to get into the financial markets again and will sacrifice the Puerto Rican people to achieve it.
This is the story of two Puerto Ricos—a phantasmagorical island cooked up by Pierluisi and the one Boricuas endure daily.
The last decade-and-a-half hit Puerto Rico like a wrecking ball, creating a dystopia where Boricuas barely survive.
A $70 billion debt (together with $55 billion in unfunded pension liabilities) brought a federally imposed fiscal control board that instituted cuts to education, pensions and health services. The debt also cut Puerto Rico out of the capital markets.
The Junta oversaw a bankruptcy process that ended in 2022 when a federal court confirmed a plan that reduced Puerto Rico’s debt by 80%.
But did Puerto Rico successfully restructure its debt? Or is Pierluisi just a desperate “monarch” in a dangerous interregnum who will do anything to hang on to power?
Pierluisi has been aggressively pushing the narrative of the island’s recovery (and the supposed best economic growth in almost two decades) from Wall Street to Capitol Hill to lure investors to Puerto Rico.
He bangs on about Puerto Rico’s financial progress, listing the economy’s 3.7 percent growth in the past year, although it is expected to weaken by 1% later on this year.
He also points to a low unemployment rate, at 6 percent, but doesn’t frame the argument with the profound population decline from 3.29 million in 2020 to less than 3.22 million in 2022 and the cost of his “economic boom” to Puerto Ricans.
Just watch the softball interview on MSNBC.
Finally caught @GovPierluisi on Morning Joe. Felt like an ad for Puerto Rico and nothing really to challenge him. This needed a little bit more journalism and less sponsored content feel.https://t.co/sa8ltIvHV4
— Julio Ricardo Varela 🇵🇷 (@julito77) May 19, 2023
The crux and bait of his argument is the influx of federal reconstruction and recovery funds. which has the markets looking at the island with renewed (and rapacious) interest.
And it’s not chump change. We are talking more than $6.5 billion in federal and state funds. Pierluisi calls the economic strategy “the moonshot opportunity“—transformation projects that reach well beyond the visible means in an economy.
What Pierluisi is banking on is that the flush of funds will entice companies and investors to come to the island and shoot its economy to the moon and fiscal stability. His mantra is that all will be well in the end.
For that to happen, one would need transparency and fiscal responsibility, which is doubtful when Pierluisi’s administration is riddled with corruption—even two of the governor’s cousins have been charged with embezzlement.
The truth is Pierluisi is running against the clock.
First, the island still needs to gain market access and tax havens and federal money might not be “mordida” enough to attract investment. Secondly, the island’s utility bankruptcy (with a $9 billion dollar debt) threatens to up-end the debt reconstruction agreement, rendering Pierluisi’s “moonshot” a dud.
So, Where Is Puerto Rico?
An excellent start to understanding how the island arrived at this predicament is watching the video “Losing Puerto Rico.”
“Losing Puerto Rico” is the first of four videos. It takes us to the beginning—how hurricanes and a financial crisis created fertile ground for Act 22 (now Act 60) to exploit a loophole in federal law.
Even though Pierluisi is doing his utmost to sell a Puerto Rico that doesn’t exist, will the markets trust him and his administration? Or is the trust placed on an unelected Junta to do Wall Street’s bidding, a sort of colonial security blanket?
Whatever the case, do the Puerto Rican people believe Pierluisi and his administration?
There is little doubt that a trend towards sovereignty is growing on the island. Puerto Ricans are fed up—tired of working two jobs to make ends meet, tired of the constant blackouts and the incompetence of LUMA energy, exhausted with a high cost of living and a collapsing health care system.
Above all, Boricuas balk at the gentrification and the privilege afforded to tax evaders that settle on the island.
Pierluisi counters the Puerto Rican people’s discontent by whitewashing it as xenophobia and the musings of malcontents. But the writing is on the wall.
In the last elections, Boricuas turned to newer parties such as Movimiento Victoria Ciudadana (MVC), with its anti-colonial platform, and Proyecto Dignidad, an ultra-right-wing Christian party.
The MVC, the Partido Independentista Puertorriqueno (PIP) and Proyecto Dignidad eroded the PNP’s and the other traditional party—the Partido Popular Democrático (PPD) voter bases. As a result, Pierluisi won the 2020 election with less than 33 percent of the vote.
The MVC and the PIP are looking to ally, and conventional wisdom is that it would deal a death blow to the two-party system (the PNP and the Partido Popular Democratico – PPD), ensuring the PNP’s defeat in 2024.
So, no matter how Pierluisi dresses the island (like la puerca de Juan Bobo), the decision of Puerto Rico’s future will hopefully lie in the hands of its people at the ballot.
Susanne Ramirez de Arellano is the former News Director for Univision Puerto Rico and a writer and journalist living between San Juan and New York City. Comments can be sent to her email. Twitter: @DurgaOne