Puerto Rico owes $72 billion in debt, approximately $20,000 for each citizen living on the island. The island's poverty rate is over 40% and 80% of Puerto Rico's children live in high-poverty areas, compared to 11% on the US mainland. Puerto Rico's unemployment rate is 11.9%, more than double that of nearly 40 US states. Tens of thousands of Puerto Ricans leave the island for the US mainland each year, eroding Puerto Rico's tax base and forcing the government to borrow money to meet its obligations.
In June, Puerto Rico Governor Alejandro Garcia Padilla called the island's debt "unpayable" and released a debt restructuring plan in September. The rating agency Standard and Poor's downgraded Puerto Rico's debt to "CCC Minus" after the Governor's announcement and noted a strong possibility the island would default. If Puerto Rico doesn't make a more than $1 billion payment January 1, it could face default.
A Unique Debt Crisis
Because Puerto Rico is not a sovereign nation, it is not eligible for emergency financing or low-interest loans from the International Monetary Fund. However, Puerto Rico is also not eligible for the municipal bankruptcy protection available to US cities and states. Congress is currently debating legislation (HR 4900 the Puerto Rico Oversight, Management and Economic Stabilization Act; HR 870 / S. 1774, the Puerto Rico Chapter 9 Uniformity Act; and HR 4991, the Puerto Rico Financial Stability and Debt Restructuring Act) to grant Puerto Rico access to municipal bankruptcy protection. Meanwhile, the Obama Administration called for broader bankruptcy protection for Puerto Rico and health care and tax reforms.
Religious Leaders Propose Solutions
On Monday, August 31, Puerto Rico religious leaders released a statement calling for solutions to the economic crisis. The statement laid out six principles to guide any solution, including debt relief, a halt to austerity, increased budget transparency and increased participation by Puerto Rico's poorest citizens in economic decision making. The statement called on Congress to pass the Puerto Rico Chapter 9 Uniformity Act and for the US Federal Reserve to intervene if Congress does not act. The following weekend, Puerto Rico's clergy read the statement from pulpits across the island.
Jubilee USA supports a solution to Puerto Rico's debt crisis that invests in Puerto Rico's people, reduces debt and poverty, grows the economy and halts austerity and predatory financial behavior. Jubilee USA works with Puerto Rico's religious leaders, politicians and community groups to advance such a solution.
Resources and More Information:
A Timeline of Puerto Rico's Debt Crisis
Archbishop Roberto González's oped in TIME Magazine: "Congress Should Allow Puerto Rico to Declare Bankruptcy"
More information on HR 870 / S. 1774, the Puerto Rico Chapter 9 Uniformity Act
Puerto Rican Religious Leaders' Statement: "A Call from the Ecumenical and Inter-Religious Coalition for a Jubilee for Puerto Rico: The Fiscal Crisis."
En Espaňol: "Llamado de la Coalicion Ecumenica e Interreligiosa a un Jubileo para Puerto Rico: La Crisis Fiscal."