Puerto Rico News: Island's Economic Problems May Play In Debate Over Statehood
Economically, Puerto Rico has seen some better days.
In April, Puerto Rico’s finance officials warned the U.S. territory could shut down in three months unless it secured a workable financing deal. As it stands now Puerto Rico has a debt of $73 billion. The island commonwealth is dealing with a public-pension shortfall, as well as a 13 percent unemployment rate.
As reported by Reuters, in April the Standard & Poor’s credit-rating agency downgraded its bond rating from a B to a CCC+. While the island suffers economically, Governor Alejandro Garcia Padilla has tried to muscle ahead with some unpopular tax reforms, and the U.S. Congress has been busy juggling possible alleviating scenarios in an attempt to keep Puerto Rico from going into a dreaded default.
Some supporters of turning the territory into a state have linked the economic problems of Puerto Rico to its current status as a United States commonwealth. As it stands now Puerto Rican municipalities and public agencies lack access to protections that similar entities in the mainland are provided with under Chapter 9 of the U.S. Bankruptcy Code.
In a recent letter to the New Yorker, Puerto Rican Rep. Pedro Pierluisi described his island’s political status as the cause of their current economic problems, saying: “It is important to understand that Puerto Rico’s economy has lagged far behind those of the fifty states for decades, and it is the states -- not foreign countries -- that serve as the proper point of comparison.”
“The root cause of these enduring problems is our political status,” wrote Pierluisi.
“My constituents cannot vote for President, and, while I represent them in the House, I cannot vote on bills,” emphasized the 56-year-old politician, adding: “To overcome its economic challenges, Puerto Rico must become a state."
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