Enactment of debt readjustment plan presents political opportunity for Puerto Rico’s Pierluisi
Through five years of bankruptcy, Puerto Rico had $135 billion in liabilities and included more than $55 billion in underfunded pension obligations. The recently approved debt adjustment plan cuts the debt by almost 80% and reduces the bond debt from $33 billion to $7 billion.
For the past few years, Puerto Rico’s economy had been turbulent due to multiple factors, including the loss of millions of inhabitants from 2004 to 2020 due to migration, then in 2016, Puerto Rico filed for bankruptcy. The economic status was only exasperated by the major hurricanes that hit the islands in the following years.
However, their current governor, Pedro Pierluisi (NPP, D), notes the economy’s positive trend, including the promising effects of the debt restructuring plan. Pierluisi stated “and we came out of bankruptcy, finally, with zero cuts to pensions, reducing debt by 80%. Now, instead of paying 24 cents out of every dollar that goes to the government, now we’re going to pay seven cents.” The debt relief offers a new perspective for the Puerto Rican citizens and a positive view of their governor. Pierluisi used these changes to display his effect on the islands and promises to continue these changes in his run for re-election in 2024 as the New Progressive Party nominee, and potentially, a Democrat with a rising star nationally.
The governor took a chance to mention the other effects of the debt adjustment plan and his time in office. He emphasized the increase in jobs and the lowest level of unemployment (7.1%) in history, as well as an increase in labor participation. He also highlighted the increase of people returning to live in the territory, combatting the loss of inhabitants.
His visible efforts to reform Puerto Rico’s economic state could aid in the form of political support from his citizens in the future.
Already, Pierluisi is using these changes on the islands as a selling point for his re-election. During his party’s general assembly, Pedro reassured his reelection by saying, “I have exactly six years, nine months, and 12 days left to complete the work and achieve statehood.”