Eric LeCompte, Executive Director of Jubilee USA, recently spoke with the Latin America Advisor about the recent COFINA debt deal on Puerto Rico debt. Read an excerpt below and follow this link to the full article.

Does Puerto Rico’s Bond Restructuring Offer a Fresh Start?

Eric LeCompte, executive director of Jubilee USA Network: “Before Puerto Rico was hit by two hurricanes in 2017, the oversight board and the governor were reviewing plans to cut total debt payments by as much as 80 percent. After the hurricanes, Puerto Rico saw temporary economic growth due to disaster aid and rebuilding efforts. Part of the problem with the Cofina deal is that it seems to be based on rosy economic estimates from temporary post-hurricane growth. They are also basing Puerto Rico’s ability to repay on the assumption that Congress and the White House will approve more significant disaster aid. This is in doubt. We are worried that not enough debt is being cut and that Puerto Rico’s people are carrying heavy austerity burdens. Nearly six out of 10 kids live in poverty in Puerto Rico. The math isn’t adding up. If plans to restructure the remaining debt fail to cut the majority of the island’s debt load, Puerto Rico won’t see sustained economic recovery
and growth. If future debt deals don’t cut enough debt, the economy will not be able to recover and will continue to contract until another debt restructuring has to take place. I am worried that this type of plan will mean Puerto Rico will be trapped in an endless cycle of debt.”

Read more here.