The Congressional, executive and judicial wings of the United State government recently clarified for all — despite Washington's claims to the contrary — that Puerto Rico is a US colony.
A law known as PROMESA was passed by Congress with bipartisan support and signed by President Barack Obama on June 30. It creates an unelected seven-person control board that has sweeping powers to take over Puerto Rico's economy.
This has occurred during a major economic crisis for the Caribbean island, whose government and utilities owe US$73 billion to US banks, hedge funds and similar institutions. The board will arbitrarily decide how the crisis will be dealt with.
Imposing a junta
Representative Luis Gutierrez of Illinois — of Puerto Rican decent — spoke out against the bill in the House, saying: “We're engaged today in a wholly undemocratic activity in the world's greatest democracy. We're debating how we will take power from the people, who are virtually powerless already…
“You are imposing a junta — because that's what they're calling it. There will be no difference between this junta and the junta of Pinochet in Chile, as far as the international community is concerned.”
Two recent Supreme Court rulings underscored his point. One, concerning a criminal procedure, asserted that Puerto Rico is not sovereign. The other voided a law passed by the Puerto Rican legislature to allow the island to declare bankruptcy. This reaffirmed a 1986 Congressional law that banned Puerto Rico from declaring bankruptcy — a right able to be exercised by all US states and municipalities.
Supreme Court Justice Soto Mayor, also of Puerto Rican descent, dissented from both decisions. She wrote that without being able to restructure its debt through bankruptcy, Puerto Rico and its utilities “will be unable to pay for things like fuel to generate electricity, which will lead to rolling blackouts”.
Other vital services “will be imperiled,” she continued, “including the utilities ability to provide safe drinking water, maintain roads and operate public transportation.”
She added that Puerto Rico's government “is left powerless and with no legal process to help its 3.5 million citizens”.
In a June 15 interview on Democracy Now!, the mayor of Puerto Rico's capital San Juan, Carmen Yulin Cruz, said: “What the Congress has done, what the president of the United States has done, what the judicial system has done, is that they have unveiled to everyone, the international community and everyone in Puerto Rico, that we are a colony of the United States.
“PROMESA is a broken promise to the people of Puerto Rico. They have turned their backs on the rights of Puerto Rican people, and they will not move forward an agenda which will help the development of the Puerto Rican economy.”
Cruz said that by these actions, the US “admitted that it has perpetrated a fraud on the international community when it asked [the United Nations in 1952] for Puerto Rico to be taken out of the list of colonies.”
No wonder a majority of people on the island strongly oppose this course.
In 1952, as anti-colonial revolutions were in full swing, Washington did not want to admit it had a direct colony. It is still seeking to fudge the issue — not using the word colony but asserting clearly that Puerto Rico has no sovereignty and Washington controls its government.
Cruz said: “While in the US, people are fighting to increase the minimum wage to $15 an hour, this colonial control board will lower the minimum wage in Puerto Rico for people 25 or under to $4.25 an hour.
“This colonial control board could sell our national resources. And this colonial control board will have sovereign powers to revoke anything that our next governor, our next legislature or any public official of the Puerto Rican government, elected by the democratic vote of the Puerto Rican people, will do.”
Cruz said the board will decide “if — not when — our debt will be restructured. This is basically a control board for the hedge funds which lent money to Puerto Rico.
“It is important to note that [PROMESO stipulates] that the Puerto Rican people will have to pay $370 million to this control board for it to be functional.
“So they are not only taking democracy away from Puerto Rico. It's costing us money to inflict pain on our own people. And that is totally unreasonable.”
The debt crisis hitting Puerto Rico is the latest result of its domination by the US.
Washington conquered the island, then a Spanish colony, in its war with Spain over a century ago. The first phase of US exploitation involved domination by sugar plantations owned by US corporations.
The second stage was the growth of US-owned industries, especially pharmaceuticals, who enjoyed big tax breaks from Washington. This began to come to an end in the 1990s, with the tax breaks completely phased out by 2006. US industries then pulled out, and Puerto Rico has been in a recession since.
But the government of Puerto Rico, dominated by conservative pro-Washington figures, took no steps to free the island from US domination and embark on building up the economy on its own terms.
Instead, much like the Greek government, it opted to meet its needs by heavy borrowing from US financial institutions. Puerto Rico now owes $73 billion, which the government admits it cannot pay.
As this became clear, the value of the debt dropped and vulture funds bought up the debt cheaply. They are now demanding full payment of the face value of the loans — which would mean raking in super profits.
“We have our own responsibility for this crisis,” Cruz concluded, pointing to the complicity of the Puerto Rican central government in accumulating the debt. “We have to reform our government. We have to restructure our priorities. And we have to restructure the colonial relationship between Puerto Rico and the United States.”
A good start for such a new relationship would be to cancel the unpayable debt.