TACOMA, Washington — Poverty in U.S. territories like Puerto Rico continues to be present today. For instance, Puerto Rico’s poverty rate in 2018 was 43.1%, which is well above the U.S. national poverty rate of 13.1%. Despite being classified as a high-income economy, extreme weather patterns and tropical storms repeatedly threaten the territory’s economic stability. In 2017, Hurricane Maria resulted in a humanitarian crisis with nearly 3,000 reported deaths and the destruction of 80% of the island’s energy infrastructure. This resulted in $139 billion worth of damage.
Residents are concerned over the inevitable return of another devastating tropical storm. U.S. Congress has granted $42.7 billion to rebuild Puerto Rican infrastructure, yet it has only allocated less than half of the funds.
US Polities and Poverty in Puerto Rico
Poverty in U.S. territories like Puerto Rico is linked to the U.S.’s colonial pasts. The U.S. purchased the island in 1898 but considers it unincorporated territory with a commonwealth’s status nowadays. However, the federal government still controls its banking system, international trade and social welfare programs, leaving little governance for Puerto Rican residents.
In fact, the House of Representatives passed the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) in 2016. This established an independent board with no Puerto Rican input or oversight to manage the island’s economy. The board, which exercises jurisdiction over the entire government and several state agencies, has already promoted cuts to the retirement system, minimum wage and education.
The Effects of COVID-19 on Puerto Rico
Tourism comprises almost 7% of Puerto Rico’s GDP and plays an increasingly significant role in its economy. However, the COVID-19 pandemic has presented significant challenges for the tourism industry. Professor Angelo Rivero Santos, Ph.D. at Georgetown University’s Center for Latin American Studies, spoke with The Borgen Project about these concerns.
He stated that COVID-19 “put the Caribbean in a precarious economic position… many are debating the costs and benefits of opening up to tourists to offset the economic losses versus the potentially devastating impact of seeing an increase in COVID cases.” Rivero Santos also emphasized that collaboration with the U.S. is crucial to adapt to current conditions as Caribbean territories like Puerto Rico lack many short-term options to diversify their economies.
Growing Resistance and New Austerity Measures
May Day, a May first celebration to honor workers, has become an important time for Puerto Ricans to voice grievances with federal governance since they otherwise lack the right to vote. For example, in 2019, residents demonstrated against a congressional plan to address $70 billion of debt by implementing more extreme austerity measures. The plan would have decreased work in the informal economy, slashed employee benefits such as sick leave and vacation pay and created a work requirement for food assistance programs.
Although austerity measures were revised, Puerto Rico still struggles to keep up with its debt obligations and expects its surplus to fall by 65% by 2032. With no official government plan to manage this growing debt, social dissatisfaction and poverty are expected to grow.
Poverty in U.S. territories has been addressed over several decades, with socio-economic issues still prevalent in Puerto Rico and similar territories. According to Dr. Rivero Santos, “the 21st century continues to show the structural challenges we face despite the gains made… Events over the past decades show how structural socio-politico-economic conditions help explain, in part, the high levels of inequality and poverty rates.” As poverty in U.S. territories intrinsically links to mainland governance, close communication and exchange with the federal government are vital for meaningful reform.
– Neval Mulaomerovic