Translated from Janneke Prins in the Netherlands:
Privatization and protest in Puerto Rico
Monday, September 21st, 2015, 16:31
Puerto Rico is described currently as the Greece of the United States. The island had to pay before August 1 $ 52 million in interest on the debt that it has. Antonio Carmona Báez told Janneke Prins what the background and consequences of this debt are.
The deadline for paying off the interest has passed. Can you explain what’s going on?
Private banks and investors have lent to Puerto Rico and at the same time money from pension funds has disappeared, but there is no public knowledge on which promises have been made to whom. What happened exactly the people do not know.
The only solution according to the government is cuts. It seems that the government follows the recommendations from the Krüger report. In IMF-like tone that report dictates that the minimum wage should be abolished. Moreover, Christmas bonuses and maternity leave should be curtailed. Also, the school system should be privatized and the number of holidays halved. Since August 1, already hundreds of schools have been closed.
In addition, the VAT is 11.5 percent. That seems small compared to the Netherlands, but half of Puerto Rico lives around the poverty line. Especially the middle class is struggling with the high tax. It is cheaper to get your fruits and vegetables at the WalMart than at the Plaza Mercado (vegetable market). These are the last nails in the coffin of Puerto Rico, our economy has already been destroyed for twenty years .
How did that process of erosion of the economy look like?
In Puerto Rico since the Second World War there was much industrialization. Big pharmaceutical factories settled here, until 2006. In that year, significant tax advantages ended. Those factories have now moved to China.
Our island was said during the Cold War to be a symbol against Cuba, where politics applied a Keynesian model to sustain prosperity levels. But since the nineteen nineties, both the Partido Popular Democrático and the Partido Nuevo Progresista have privatized public services: water, telephony … and they are now working at electricity.
We also suffer from corruption and tax evasion by big companies. Because of loopholes in the tax system large corporations need to pay only 3 to 5 percent tax. Other companies are according to the elite ‘unthinkable’, so the government makes the working class pay for the debt. But with poverty consumption is declining. Additionally in recent years, 100 000 people more left than came. That’s a lot, Puerto Rico currently has 3.5 million inhabitants.
Can you explain why a bankruptcy petition for Puerto Rico is not an issue?
The Jones Act dating from  forbids us to apply for bankruptcy, because we are not really a state of the USA. There is a taboo on the fact that we are a colony. We are second-class citizens of the USA, we have no voice in Congress. Last month the Senate in Washington reaffirmed that we will not be the 51st state of the USA.
Are trade unions and leftist parties not organizing protests?
The unions have been active since late August with a series of strikes and demonstrations. These actions will result in a large protest on September 11 around the Capitol. There also has been announced a general strike for October. This is important, because many people had lost their faith in the unions, after they also had profited too much from tax evasion.
We of new party PPT also demand a tax inspection, to understand what happened to the money that was borrowed. On September 6 a demonstration is scheduled.
Antonio Carmona Báez teaches at the University of Puerto Rico and is a member of the new workers’ party Partido del Pueblo Trabajador (PPT).