The Human Cost of Puerto Rico’s Limbo

It has become a daily bet, a cruel, painful, and unfair bet. Every day Puerto Rico wakes to a sort of Russian roulette, trying to determine which child, pensioner, or ward of the state is about to be left out in the cold in what has become a constant―and potentially deadly―balancing act, as officials try to manage the commonwealth’s dwindling and unpredictable cash flow while attempting to maintain basic public services. 

Since 2016 began, this forlorn island territory has been besieged by fiscal problems.

In the second week of January, the Puerto Rican government’s gasoline suppliers threatened to suspend service due to lack of payment. Ambulances and vehicles used by social workers (fundamental in a society plagued by child abuse and gender violence) were in danger of coming to a standstill. The government managed to make partial payments, but then faced a similar prospect with special education children, who were suddenly confronted with the possibility of losing therapies. They were spared by a last-minute scramble that produced payments big enough to keep services running―but not big enough to put accounts in the black.

These budget dramas play out daily while debt-ridden Puerto Rico awaits action by the U.S. Congress. Strapped with over US$70 billion in debt, Puerto Rico is spending more on debt service than on education, health, or security. Services are being curtailed as public agencies scramble to cut costs.

The Autoridad Metropolitana de Autobuses, which is in charge of public transport in San Juan, announced a drastic reduction in routes “to increase efficiency.” The pediatric hospital increasingly depends on charitable donations from NGOs for repairs to its infrastructure as well as for some professional services.

The island needs urgent access to some mechanism of debt restructuring. In 1984, Puerto Rico was excluded from the Chapter 9 provision of the U.S. Bankruptcy Code. Neither a U.S. state nor a sovereign one, Puerto Rico lives in limbo, incapable of either seeking debt restructuring under the U.S. legal system or seeking international debt relief. The Obama administration has called on Congress to approve Chapter 9 provisions for the island, but despite a series of seven congressional hearings, no action has been taken on Capitol Hill.

This crippling climate of uncertainty has forced the government to choose between paying creditors or providing public services. Puerto Rico paid its “general obligation” debt service this January after taking extraordinary emergency measures, including borrowing $400 million from its own state insurance companies and workers’ compensation funds; deferring 2014 refunds to taxpayers; and postponing payments to service suppliers. Accounts payable are estimated to have increased to a whopping $1.8 billion.

Despite all this painful juggling, two of the commonwealth debt issuers, the Puerto Rico Infrastructure Financing Authority and the Puerto Rico Public Finance Authority, have already defaulted on $100.8 million in debt-service payments. And two insurers of Puerto Rico–issued debt have sued the government in the U.S. federal court in San Juan. Lacking the clear procedures that Chapter 9 bankruptcy protections would provide, retail mom-and-pop investors (both in San Juan and on the mainland) will probably lack the resources, stamina, and time horizon to brave what is expected to be a protracted series of creditor lawsuits.

While Congress wavers, this past week the island’s 12,000 incarcerated people were close to being left without food due to lack of payment to the service providers. A last-minute check averted disaster. Inmates on the island tend to be young, poor, and jobless, coming from rural barrios with a high school education or less.

As the situation continues to deteriorate, one wonders, how many of the most vulnerable puertorriqueños will continue to be held hostage to the island’s debt-restructuring limbo? 





Children and girls are the front injure on such occasions so every one should collaborate to bring solution to them

The Prison population should always be kept on the bare minimum in my opinion as I don't feel they should ever benefit for their crimes BUT for America to control whether they are helped as a country or not should be a very quick decision so they can decide what to do if help is not going to be given: Being held in limbo is simply cruelty as the situation deteriorates and leaves lasting effects on a society.
I would personally suggest the EU making an ally and investing in this country for future gain such as nurses or other that they may produce, I do believe that this investment must be non interest or even time limited as these people obviously need help "If I was a billionnaire I would invest!

Puerto Rico is a US territory. It either needs sovereignty or the same kinds of legal protections states have within the US. Time for the Congress to take care of its responsibilities.

In light of the substantial numbers voters of Puerto Rican descent and with continuing close ties to the island, I am surprised that New York City politicians have not been more active in seeking an effective solution to the Commonwealth's financial crisis.

It is truly a crime. Mainland has exploited the. Island and now mainland is ignoring a crisis. Drug companies have polluted, hedge fund greed is alive from mainland. Support your colony America.....not the Middle East and other countries that hate us. Wake up or there will surely be more costly alternatives'

Yes, there is a very serious crisis right now in Puerto Rico.It's easier to point the finger and blame "others" for Puerto Rico's present situation. Many people have taken advantage of the easy credit available to them. They too wanted to "keep up with the Jones", like in the U.S. Nevertheless, at the local level each person is responsible for the choices they make in life. In Puerto Rico, most people went along with the "show" while the show lasted. Now, each person is left with the bad choices they made in the past. We cannot fix all the problems Puerto Rico has, but we can fix our own problems by making better decisions today.

Vulture funds have invaded this american common wealth for the third time in my lifetime. Tax shelters to big pharma have been abated and left . Just like they did in detroit . Man for man they have contributed more to the armed forces than most states. They make1/3 of the wages paid stateside.???????

Time for US to make Puerto Rico a US state. Why is America sending money and aid to foreign countries but not taking care of its U.S. Commonwealth? Enough.

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