Decolonization Models for America’s Last Colony: Puerto Rico

Successful Sovereignties

17 Successful Sovereignties Decolonization Models for America’s Last Colony, Puerto Rico Interview aired on La Voz del Centro, Univision Radio Puerto Rico and New York, September 8, 2009. ÁNGEL COLLADO-SCHWARZ: Paco, I would like you to summarize Puerto Rico’s current economic situation. FRANCISCO CATALÁ-OLIVERAS: As we can see in the news we read every day, Puerto Rico’s current economic situation is critical, so much so that I do not think it should be classified as a recession or a depression—it is even worse. However, let us assume for a moment that it is a recession or depression. In fiscal year 2007, the gross national product of Puerto Rico—that is, the production and income of Puerto Rico residents , whether owners, entrepreneurs, or salaried employees—contracted 1.2 percent. In fiscal year 2008, it contracted 2.8 percent; in fiscal year 2009, which ended this past June 30, the contraction was 5.5 percent. A subsequent revision reduced this percentage to 3.7 percent. This is the Puerto Rico Planning Board’s data. If we were to add the already evident contraction registered during the current fiscal year (2009–10) to the three years mentioned, the accumulated percentage of contraction would be approximately 10 percent. In other words, productive activity and the income that Puerto Ricans received declined 10 percent in real terms. Such a situation, by any standards, is more than a recession, which is defined as a contraction sustained for two consecutive quarters. Here we have four consecutive years of contraction. It might be classified as a depression. 18  Interviews Let’s also take into account that during this whole first decade of the twenty-first century Puerto Rico’s economy has been slow, and the unemployment rate has remained at two-digit levels. The most recent Planning Board report in the month of July places the unemployment rate at more than 16 percent. For the decade as a whole, the labor-participation rate— that is, the number of persons who are able to work and are employed or actively seeking a job—is approximately 45 percent of that portion of the population. So more than 50 percent of the people sixteen years and older are not even in the labor market. This applies to the entire decade. And there is more. If we go back to the 1970s and look at economicgrowth indicators from that decade to this day, we see that during this whole long period the economy of Puerto Rico grew very modestly every year—at around one-third the rate at which it had grown in the previous period, during the 1940s, 1950s, and 1960s. This means that we are confronting an economy that has been exhausted for some decades now. It is in this context of exhaustion that the recession or depression has occurred. Also relevant is the fact that this recent recession or depression started in Puerto Rico before the credit crisis, the financial crisis, which then turned into a recession in the United States and in the world. The key date accepted by the Planning Board itself for the start of the recession is March 2006, so our recession came first and has been aggravated by that of the United States. And the exhaustion of Puerto Rico’s economy also preceded , by many years, the recession in the United States and in the world. ACS: To what do you attribute this situation, Paco? FCO: To many things, but I believe that the one that stands out is this: the world has changed, and Puerto Rico resists the change. Here we talk about change, about globalization and international treaties, but nothing is done in that regard. When Puerto Rico was industrializing in the 1950s, it had practically no competition. Moreover, in the 1960s the number of international treaties could be counted on the fingers of one hand, and there were fingers to spare. Today, there are hundreds [of treaties]. The world is an interactive network of different jurisdictions, nations, and states, and Puerto Rico does not participate in that interactive network; it has stayed behind. Successful Sovereignties  19 ACS: In other words, Puerto Rico’s economic model is broken. FCO: Yes. It is not in harmony with the norms that govern the economic dynamics of the world. ACS: We can say that the measures taken by our revolving-door administrations have not worked. It has...