PROMESA reinforces colonialism in Puerto Rico
On June 30 the US Congress approved the very overdue Puerto Rico Oversight, Management, and Economic Stability Act or PROMESA. The President signed the bill into law the same day. Earlier the Senate voted 68 to 30 in favor of the bill. Notable people who voted against the bill include Senator Bob Menendez, Elizabeth Warren, and Bernie Sanders. Puerto Rico to prepare for the historic law has done something it hasn’t done since 1933, it defaulted on its debt, paying roughly half of $2 billion in debt payments due because the territory simply does not have enough to pay the $779 million worth of bonds that it owes. Fitch ratings, a credit rating agency cut Puerto Rico’s Long-Term Issuer Default Rating from C to D after the historic default. It is the hope behind PROMESA that future debts will be accounted for, as the law will have the hefty task of eliminating this debt crisis.
[graphiq id=”kq6k5douICh” title=”Puerto Rico’s Public Debt” width=”600″ height=”532″ url=”https://w.graphiq.com/w/kq6k5douICh” link=”https://www.graphiq.com/wlp/kq6k5douICh” link_text=”Puerto Rico’s Public Debt | Graphiq” ]
The law will create a federal control board for Puerto Rico and allow Puerto Rico to temporarily lower the federal minimum wage for younger workers, a policy that Bernie Sanders advocated against. Obama has said that PROMESA will provide “more stability, better services and greater prosperity over the long term for the people of Puerto Rico”. The law unfortunately seems to assert further federal control over a territory of the United States and is a blow for the people of Puerto Rico who have the right to democratic self-governance. One thing worth mentioning that has been left out is that the control board for PROMESA will cost $370 million, and the Federal government will not be paying for it which makes no sense.
Already there have been unintended effects of PROMESA in Puerto Rican politics. Governor Padilla was one of many advocates who saw the bill as an imperfect but necessary one for Puerto Rico, the first of many steps needed to fix the island. The President of the Puerto Rico Government Development Bank, Melba Acosta, will also be resigning on July 31.
One thing is for sure, the debate within Puerto Rico has only increased with the passage of the PROMESA legislation. Democracy NOW has been an avid reporter on the PROMESA and believes that it is a dangerous increase of colonialism and a hindrance to democracy. Senator Bob Menendez led a very strong opposition to the bill saying it was vote to cut the minimum wage to $4.25 per hour for young workers, allow long overtime hours without fair compensation, jeopardize collective bargaining agreements, close schools and cut senior citizens’ pensions to the bone.
All of these effects of PROMESA will have to be analyzed thoroughly in the years after to see if it effectively helps the island. It is interesting to note that something like this is unique and will be a learning experience for everyone involved. PROMESA will offer Puerto Rico tools that are even stronger than Chapter 9 or Chapter 11 in the United States, something that has yet to be seen in action. We must not forget though that enacting PROMESA is a sign that Puerto Rico is clearly a colony with an overreaching federal government that makes decisions for the people.