Drive any distance on Puerto Rico's deplorable roads and your teeth will rattle to the perfect metaphor for the Commonwealth: it's on a very bumpy path. Its finances have gone from bad to worse and it is at risk of following Detroit into bankruptcy. Meanwhile, its best-educated workers see greater opportunity in the United States. And the very relationship with the giant to the north shows no signs of being resolved any time soon.
A Question of Status
A commonwealth of the United States of America, Puerto Rico is a semi-autonomous territory whose constitutional status has long been a political oxymoron. Puerto Ricans enjoy many protections and benefits that US citizens have, but they are not allowed to participate in federal elections and have only a nonvoting ‘Resident Commissioner’ in the US House of Representatives. Puerto Rico’s status is a major point of contention for local political leaders and the people in general.
A non-binding resolution in 2012 showed that the majority of the island's voters favor statehood with the US. President Obama committed to funding an 'official' referendum that would decide Puerto Rico's political fate, and the 2014 US budget set aside $2.5 million for this purpose (although no date was specified).
The question remains, particularly with Donald Trump's ascendancy to the White House, whether any Puerto Rican vote favoring statehood would or could be linked to a mandated admission process to the US as the 51st state. President Trump's views on this, and relationship with the island, have so far seemed nuanced to say the least, and US resident Puerto Ricans mainly backed Trump's rival Hilary Clinton in the build-up to the 2016 US elections. But on becoming Puerto Rico's 12th Governor in 2017, pro-statehood Ricky Rosselló succeeded in getting Senate to pass a bill paving the way for the first 'statehood or independence' vote in Puerto Rico's history, due to take place on June 11, 2017.
Environmentalism & Energy
Energy issues have long sparked debate among Puerto Ricans, whose energy costs outweigh those of their US neighbors (electricity costs are virtually double the US average) despite them having, on average, half the salaries to pay for them with. The island's ailing electricity grid was responsible for an island-wide three-night blackout in September 2016.
As the island has no petroleum, gas or coal reserves, and these three currently account for 98% of its electricity generation, it's easy to see where the problem lies. Solar energy is being slowly increased, and the Santa Isabel wind turbine farm near Salinas on the south coast is the Caribbean's largest, but many further measures are needed to increase the paltry percentage of Puerto Rican power coming from renewable sources.
Developing better renewable energy would appear to be a way forward for powering Puerto Rico. But on a small island, securing new energy sources is not easy. Wind turbines in the southwest only narrowly got the go-ahead after conservationists protested the impact on the critically endangered Puerto Rican nightjar bird.
While the slow-down in tourism has put the brakes on coastal development, environmentalists look at the many pristine stretches of shore with deep concern. Rumors of new developments abound, especially on the fairly untouched paradisaical beaches of Vieques. It's hard to argue against a new resort when so many jobs are needed.
The Economic Downturn
Like so many other places in the world, Puerto Rico’s economy was precipitated on a downwards spiral with the global financial crisis that hit hard beginning in 2007. The effect on the commonwealth was immediate and stark: employment soared to 16%, a level unthinkable just a few years earlier when the island was touted as an economic miracle. Meanwhile, recession in the US depressed tourism and many long-time visitor haunts closed, from Old San Juan to the farthest reaches of the south and west coasts. (You can still see these commercial corpses, even today as tourism recovers.)
Meanwhile government spending rose as efforts were made to prop up the economy. The budget deficit in 2012, for example, at the start of previous Governor Alejandro García Padilla's stint in power, was a whopping $2.2 billion. Efforts over the ensuing years to raise taxes and limit spending have met with mixed results. And Puerto Rico has taken a far more blasé approach than other places facing economic ruin such as Ireland and Greece. Why? Well you only need to look north to the US to see the salvation that most locals complacently assume will come.
Bailing out Puerto Rico, however, carries no political gain for the US. Plus, with US spending down, there's little money for a bailout anyway. Instead, Puerto Rico's finances may survive because it is too big to be allowed to fail. For years the commonwealth's municipal bonds have been beloved by mutual funds and other investors, lured by their high interest yields and supposed security. Were Puerto Rico to collapse, it would have disastrous consequences for some of the world's largest financial institutions.
Collapse, at the beginning of new Governor Ricky Rosselló's tenure in 2017, is still a very prevalent threat. Public debt stands at over $70 billion, so concerning to the US that they have appointed a board to oversee all measures undertaken to tackle the deficit, which in turn will hamper Rosselló's power to resolve anything.
Several other factors have been hindrances to economic resuscitation. Puerto Ricans are leaving for the mainland US in greater numbers than ever before, as the decade-long recession takes its toll. If the island's bright young things only envisage their future beyond its shores, it becomes that much harder to see future positives within the Puerto Rico economy. In addition, a tourism sector accounting for an estimated 7% of GNP has been hard-hit by 2015's Zika outbreak, which is still keeping many holiday-makers away. And President Donald Trump has thus far appeared a lot less sympathetic to the Puerto Rican pecuniary plight than his predecessor Barack Obama.
Many see statehood as the best road to recovery and here, there is the glimmer of light at the end of the tunnel. One of the pro-statehood Rosselló's first acts upon being sworn in was to call the island's first ever referendum on its status with the options of 'statehood' and 'independence', to take place in June 2017. Rosselló believes resolving Puerto Rico's status by making it a US state would help improve the island economy.