Puerto Rico has recently drawn international attention, in association with the economic tribulations of Greece, which has been in the spotlight for some time. We stepped into prominence when our governor declared publicly that the state would not be able to pay the 72 billion dollars debt it owes, mostly to North American bond investors. It is a disgrace to figure worldwide on such accounts, but it opens doors for the Island and, being an optimist, I am convinced some good will come of it.
The spotlight provides for inquisitiveness, and for questions that should lead to answers. Greece is a sovereign state in the European Union; Puerto Rico is a territory of the United States. A flagrant contradiction, which points to the claw of the imperial eagle on the heart of democracy. We are confident it will have bearing on international opinion, more so in the United Nations, where the Committee for Colonial Affairs pushes for our case to be considered by the General Assembly.
No need to emphasize that bankruptcy is a sign that something is fundamentally wrong, and points to the need to take action. Territorial submission is the inevitable consequence of the racism and condescension that has labeled us as property of but not part of the United States; a way of thinking that has reduced us to beggars at the table of their benevolence. I don’t know if this will be the Achilles heel of federal policy towards the Island, but it certainly rocks the boat and stirs the waters.
In my humble thinking, the key to understanding the situation lies in our economic development, or should we say lack of it. Common sense dictates that a healthy economy be productive and diversified in industrial, commercial and service activities that generate enough resources to contribute to the health and wellbeing of its population. Economic development in Puerto Rico during the last century has met with enormous obstacles. For example, upon establishment of civil government in 1901, our currency was devalued 40%, loans were refused to help an Island-country devastated by recent hurricanes, and property was acquired by the new colonizers at despair prices. Any similarity with what is presently happening is a fortuitous accident of destiny.
The first half of the 20th Century our economy gravitated around sugar and the investments brought about by Charles H. Allen, first civilian governor of the Island. With the stroke of a pen (and a little invasion) we lost a self sufficient agricultural production to single crop of high yield, not for us, of course. The 30’s were plagued by poverty and the repercussions of the Great Depression, which precipitated great turmoil. It was a time when sugar cane labor met with Nationalism and the raised the resonating voice of Albizu Campos.
The 40 s were dominated by the involvement in the war, the winning of that war and another capitalist expansion. At the end of that decade two important laws were approved: Law 600 provided for us to adopt a constitution with more self government; the Act for Industrial Incentives set the policy for economic development. When the native government came to power, it created the Administration for Economic Promotion (Fomento Económico) and placed it in the hands of Teodoro Moscoso to promote the Island as a tropical paradise for industrial investment, with tax exemptions as incentives, access to the North American market without custom fees, and money to be borrowed at a low rate. A very appealing deal for investors in times of plenty and the heart of the problem. For the economy was put into the hands of US companies that generated tremendous profits that fled the island, was not reinvested in the Island and did not contribute to economic growth.
There was a significant investment of capital in the Island from 1948 to 1972 that contributed to explain the prodigious growth of our economy, never enough as to have a steady 15% unemployment and a labor force not exceeding 40%. In the 70’s there was a turnover in world economics due to oil speculation; a decade marked by the oil crisis. In 1975 Section 936 of Internal Revenue laws was approved which granted future tax exception to capital intensive pharmaceuticals and high technology industries (repeating the cycle of de-capitalization) as well as the creation of the food stamp program to assist the needy. A double edge sword for it provided assistance while promoting indolence and dependency.
In times of capital expansion, personal credit was enhanced, pushing us to the conspicuous consumption that helped drive the commercial sector. Easy access to money confused our better judgment, together with the fascination with the financial market. The government went to New York offering high yield (8.7%), bonds with tax exceptions, government subsidies and constitutional guarantees with assurance that paying the bonds was a priority. An attractive offer for investors willing to take risks in an “overseas” market under the US flag.
Some economists voiced concerns about the debt starting in 2004, I dare say the problems really started with the 1947 Law of Industrial Incentives; since then we have faced the flight of profits and the inability to accumulate capital. In other words, the supposedly recent strategies are more of the same; the myth of what is possible which served us to give away our heritage, and the insufficiency of power that have brought us where we are now.
These are times of shame, for we have been accommodating and passive accomplices of the “wizards” who have contracted this debt. And they bring us as advisers and consultants the International Monetary Fund, who is partly responsible for the disaster, with the gall to recommend the following measures: shrink government (add to unemployment) to diminish the minimum wage, increase taxes, suppress reduce entitlement programs (Medicare and Medicaid), reduce or eliminate the Christmas bonus, limit vacation days and overtime, reduce the number of schools and teachers and diminish the funds granted to the University of Puerto Rico.
This adds injury to insult; all are steps to curtail income and benefits to the working class, as if it were the working class who is responsible for the debacle, while the ruling class who is truly responsible, acts concerned and troubled. At the risk of sounding obsessive, this brings us back to the nature of the pact and the lack of powers to dictate over our best interest, particularly our future. The preceding governments have not been able to administer our wealth as a nation nor in our best interest. Colonial politics is under a sustained pressure to devalue our self worth and give away our future. A situation that clearly qualifies as a crisis. To find some comfort, I borrow on Albert Einstein wise words:
We cannot expect things to change if we do the same things. Crisis is the best blessing people and countries can have, for crisis brings progress. Creativity is born of despair, as the day is born from the dark night. Crisis stimulates inventiveness, discoveries and great strategies. Whoever overcomes crisis overcomes himself without doing it.
Those who attribute their failures and pains to crisis neglect their own talent, and respect problems more than solutions. The true crisis is the crisis of incompetence. The inconvenience that people and countries face is the laziness to find ways out and solutions. Without crisis there are no challenges and life is a routine, a slow agony.
Without crisis there are no merits. Crisis makes the best of each to come forward, without crisis every wind is a caress, To talk about crisis is to promote it, to dismiss it is exalting conformity,
Instead of that, let us work hard. Let us finish once and for all with the only threatening crisis, the crisis of not struggling to overcome it.
Before I continue, let me make it bluntly clear; I am not interest in being a protagonist, nor in directing anything but my own life, which is hard enough. But I’ve had enough of criticism and guilt. Responsibilities should be assigned, but it is more important to move forward, without giving way to conformity and incompetence, and we must stop giving the same answers. This crisis privileges us with the urgency to create and, in view of the fact that we do not have any tricks left in the box, we need to think outside the box. To that effect, I dare to propose some thoughts on country and home I would like to live in.
The first thing we need is a national project that allows us to face strife and future with dignity and sense of purpose held up high. A project that goes over and beyond party ideology. Commonwealth status has proven not to be so, and to think of statehood as a means to obtain more benefits is an expression of opportunism. The motivation for a nation cannot be to become subsidized. It is time to stop patronizing poverty and to use it as a reason for stagnation. The project should be based on the principles of dignity, respect, discipline, and the pursuit of excellence. I dream of our people as enjoying the creativity that all the forms of art in the Island proclaim, a vibrant culture that goes from ballet to gastronomy.
The fertility of the land had been described in all historical accounts of the Island, until we started planting concrete. We must retake the land available and develop agriculture to substitute imports, create jobs and provide us with a more nutritional alternative. Dependency on crude oil as the main source for our energy has contributed to our tribulations; in a tropical island with abundant sun and wind, it is absurd not to develop these technologies. It is also very hard for me to understand why we don’t have a fishing industry, or desalinating plants to purify sea water.
With the antagonism it will generate in those who have made subsidy a way of life, I would want the goal of work for all. We also need to strengthen mid level supervision to make the people and the country accountable for and to ourselves. I’m well aware of the magnitude of adversity drawn from centuries of contraband and anarchy, and that is one of our traits that need plenty of attention and energy. I dream of a country of people who value efficiency and effectiveness, who are diligent towards their responsibilities, kind, hospitable and generous.
The government structure should also be addressed. It is beyond me why we have a bicameral legislature when the majority of the people voted in a referendum to consolidate it; costly benefits should be taken away from the politicians (car, drivers, body guards and diets); the privilege of serving should be sufficient reward. I would reform the judicial system strictly on the merit principle, with enough resources as to be efficient, dismissing shadows of favoritism and convenience. It is also beyond me why do we need 78 municipalities, each with a bureaucracy, frequently riddled by nepotism.
I would assure laws to urgently promote the capitalization of our economy, by taxation as well as with permits. I would strengthen cooperatives and ease out the mega stores that have led to the bankruptcy of so many native businesses. I would promote love for the land and joy in her harvest. The labor force needs to install a sense of solidarity, instead of feeling antagonized by its concern with exploitation. I would promote engineering and encourage the return of the talents that have left us to assure the quality of productivity and our infrastructure, as well as to invent and develop patents. In view of the fact that we are in the way of being an old country, and our median age keeps growing, I would promote tapping into the wisdom of old age and have elders as part of the solution, not the problem. We need to be a country with sufficient autonomy and power to create allegiances and pact with whomever best favors our interests, based on the values of diligence, responsibility and a strict sense of compliance.
And then, we will look for new crisis to maintain our enthusiasm and motivation to create and prosper.
Copyright 2015 by José M.Umpierre. Photos of América Tropical, stockmarket and technicla owrker copyrighted by Barrio Dog Productions, Inc. Photo of Puerto Rican House of Representatives copyright by José M.Umpierre. All other photos are in the public domain.