Debunking Misconceptions About Puerto Rico Statehood

REUTERS/Carlos Garcia Rawlins

Carlos Mercader Contributor
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On August 8, Taxpayers Protection Alliance (TPA) published an opinion editorial about Puerto Rico with a multitude of false assertions reflecting a deep ignorance about the island, its politics and the recovery process it is currently undergoing.

They did get one thing right, however, which is that “in September of 2017, Hurricane Maria completely ravaged Puerto Rico, shutting down the island and imposing a blackout devastating the island for almost a year already.” Unfortunately, the rest of this pay-for-play hit piece was completely deceptive in how it characterized Puerto Rico’s recovery and the island’s push for statehood; it reeks of the special interests that surely motivated its publication.

Let’s set the record straight.

As Resident Commissioner Jenniffer González-Colón (R-PR) said last month, “Hurricanes Irma and María unmasked the reality of the unequal treatment of the Americans living in Puerto Rico.” That unequal treatment is rooted in the island’s outdated territory status, which has been in place now for 120 years and allows Congress to discriminate against island residents, forcing them to either struggle to compete from an uneven playing field or to move away to the states to seek the equal rights and responsibilities they deserve as American citizens.

Island residents are subject to federal laws but do not have voting representation in both the U.S. House of Representatives and the U.S. Senate. Our sons and daughters in uniform can be sent to war by the President of the United States, but even when they serve honorably, they cannot vote for the commander-in-chief.

That is why it should not surprise anyone that now, over 5 million Puerto Ricans have chosen “statehood” by moving stateside and that the population of the island under territory status has dwindled to 3.3 million. It is also why voters in Puerto Rico have chosen statehood over the current territory status twice in the last six years, in 2012 and 2017.

To blame Puerto Rico’s multiple crises (demographic, economic, fiscal, and political) solely on local elected officials is to completely overlook the actions that the U.S. Congress and the federal executive have taken for the last century, which have resulted in a patchwork of federal laws and policies that put Puerto Rico at a structural disadvantage vis-à-vis the States and place an inherent limitation on private sector investment and the island’s economic growth capacity.

While local officials have their fair share of responsibility, fantasizing that Puerto Rico can somehow overcome its challenges from within its inherently undemocratic and unequal current territory status is simply laughable.

The TPA’s editorial, however, was not interested in being objective. Their goal was clearly stated in the last sentence piece: to get Puerto Rico “do deals with creditors,” a subset of which likely motivated the organization to write it in the first place. What they don’t tell you is that since Governor Ricardo Rosselló came into office in January 2017, and found the island in a state of complete chaos, his administration has worked tirelessly and without hesitation to correct course, including implementing multiple free-market reforms and extensive efforts to reach deals with creditors.

Major free-market reforms being executed are the privatization of Puerto Rico’s state-owned electric utility, the systematic cutting of unnecessary regulations, the streamlining of our permitting process, the liberalization of our labor market, among others.

In terms of the debt restructuring process, since the beginning, we have engaged in ongoing negotiations with all parties and the results are evident. Just last month, Puerto Rico reached a term-sheet agreement with a large group of PREPA bondholders for $3 billion of its debt. Then, last week, we reached another preliminary agreement with COFINA bondholders for about $18 billion more.

These examples demonstrate that the governor has been both diligent and successful in his efforts to implement reforms and restructure the island’s debt in a responsible way that re-opens the door for Puerto Rico’s economy and society to thrive and grow.

Unlike whichever sub-set of creditors motivated TPA to write the editorial, whose only focus is getting repaid at whatever expense, the governor has the responsibility of not only restructuring debts and reaching deals with creditors, but also charting a path to full fiscal stabilization and rebuilding the island after last year’s devastating natural disasters in a way that can restore economic growth and improve the lives of the U.S. citizens residing in Puerto Rico now and in future generations.

Governor Rosselló supports statehood because he understands that only through the equal treatment and full participation in the federal decision-making process that impacts the lives of island residents can we unleash the full economic and social potential of Puerto Rico for the benefit of the island and America as a whole.

Puerto Rico has much to contribute to America’s success as a global leader, and this week we published Transformation and Innovation in the Wake of Devastation: An Economic and Disaster Recovery Plan for Puerto Rico, which will set the foundation for a strong, resilient, and thriving Puerto Rico. The path presented in this plan is not only essential to Puerto Rico’s recovery and reconstruction but also marks a key opportunity for America to correct course on the patchwork of unequal and incoherent federal laws and policies that have limited Puerto Rico from reaching its full potential to date.

The plan presents an opportunity to build on the policies of fiscal stabilization and debt restructuring laid out in the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) and to invest in a way that revitalizes our island and people as an asset for America’s national and global economic success.

Ultimately, for the various federal and local efforts underway as a result of PROMESA and the post-disaster reconstruction process to succeed in unleashing Puerto Rico’s full potential, there needs to be a simultaneous effort to end the unequal and undemocratic territorial status.

Among non-territorial options, only Puerto Rico’s admission as a state with equal rights and responsibilities would bring significant economic progress to the island, decrease dependence and increase interstate commerce for the mutual benefit of Puerto Rico and the rest of the Nation.

So, if TPA really wants to protect taxpayers, instead of serving as a mouthpiece for special interests by perpetuating inequality and continued dependence, they should support Puerto Rico’s ongoing reform and reconstruction process as well as our effort to obtain equal rights and responsibilities through statehood. Anything else is pure demagoguery.

 Carlos Mercader is the Executive Director of the Puerto Rico Federal Affairs Administration.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.