From Smirking Chimp
On September 20, Hurricane Maria swept through the United States territory of Puerto Rico and devastated the island ("A tale of two islands"). The death toll is not yet confirmed. It is hard to know what is happening since the roads in the interior of the island remain impassable and communications networks are down.
Three weeks after Hurricane Maria left the island, the 3.4 million Puerto Ricans remain in the dark. It is estimated that 85 percent of the population will not get power for at least six months and that 40 percent of the islanders will not have access to drinking water. Waterborne diseases threaten the people, whose health has been further endangered by the threadbare hospitals.
The government of the island and U.S. President Donald Trump have been exaggerating the situation in the island. For instance, Puerto Rico's Governor, Ricardo Rossello, said that 63 of the island's 69 hospitals were fully operational. The Centre for Investigative Journalism (Puerto Rico) suggested that this was impossible. A week before Governor Rossello made these comments, 56 hospitals were closed. When the staff from the centre called many of the hospitals that were said to be operational, they found them not in any state to receive patients. The government suggests that the death toll was somewhere in the vicinity of 45. But Representatives Nydia Velasquez (Democrat of New York) and Bennie Thompson (Democrat of Mississippi) wrote to the Department of Homeland Security suggesting that the death toll was being "woefully underreported." They say that at least 450 people might have died in this calamity.
Donald Trump arrived in Puerto Rico on October 3. He suggested that the death toll was minimal -- 16. "Everybody around this table," he said of the political leaders and disaster relief personnel, "and everybody watching can really be very proud of what's taken place in Puerto Rico." He was in San Juan, the capital, where he visited the wealthy suburb of Guynabo, whose gated communities were spared the devastation visited on nearby poor neighborhoods such as La Perla or Barriada. Small towns outside San Juan such as Florida and Caguas suffered a complete apocalypse: sewer water ran through the streets of Florida, while houses in Caguas lost their roofs whose metal dammed up creeks and increased the flooding.
Trump went to the Calvary Church where chartered flights were bringing in meals for the more affluent residents. Trump threw rolls of paper towels at people in his version of providing relief. The journalist Valeria Collazo Canizares put it most wryly: "Our catastrophe is not real. Our need is towel paper. Our dead, a pride. The resources sent, a budget deficit."
Canizares' statement about the budget deficit is utterly along the grain of reality. For the past several years, the island has been struggling to manage a depressingly bad financial situation ("Puerto Rico: A Greece Moment," August 7, 2015). This hurricane has now set the island on course to total bankruptcy. Puerto Rico is saddled with a $74 billion debt, with its own bonds worth pennies on the dollar. There is no easy way for Puerto Rico to move to solvency. "We are going to wipe that out," Trump had said about the debt in one of his moments of paternalist braggadocio. Trump's statement crashed Puerto Rico's already defaulted bonds. Then, hastily, his administration walked back from his statement.
In its $36.5 billion disaster relief package, the U.S. Congress is slated to give Puerto Rico $4.9 billion, not as a grant but as a loan. This money is to go towards the maintenance of basic government activity such as normal services of the government, but not for any activity that will generate revenue. In other words, distressed Puerto Rico is being made to take a loan out to perform constitutionally mandated tasks of the government. This is not an investment towards any future revenue that could service this additional debt. This is just the heavy weight of debt on an island already sinking into financial collapse.
Whatever industry existed on the island is now substantially destroyed, and the tourism sector will not recover from the destruction of Puerto Rico's infrastructure. Unemployment rates are slated to rise, which is going to put more of a burden on the government. How it will raise revenue to service the debt, let alone pay it off, is unknown.
Meanwhile, out of this $36.5 billion package, $16 billion will go as a contribution towards Puerto Rico's debt of $74 billion. This is money that will go directly to the banks that own Puerto Rico's debt. Relief will go to the banks while Puerto Rico's residents, U.S. citizens all, will continue to live perilous lives. The insurance companies, hurt by their payouts in Texas and Florida, will get some money, as will government agencies that have been dealing with a series of hurricane-related disasters.
None of these packages, like similar previous packages, will solve Puerto Rico's problem. The debt cannot be paid off. Puerto Rico, already a semi-colony of the U.S., has drifted gradually into becoming a colony of the U.S. banking system.
Campsite of the forgotten
A few days after the hurricane hit Puerto Rico, the Association of Electrical Workers said that it would bring 17,000 workers to put up fallen electrical posts and to restore electricity supply. It waited for the government of Puerto Rico to invite it and to raise $25 million to cover its costs. The electrical utility, PREPA, is wracked by debt, but it suggested at the time that it would be able to find the money. The invitation never came. The electrical workers were set aside. Instead, with great fanfare, the U.S. Army Corps of Engineers came and took over the recovery effort. They are in charge but they do not know the island like its own electrical workers. The pace of repair is glacial.
PREPA is itself trapped by its own contracted obligations to a Brazilian firm, Whitefish Energy Holdings (Comtrafo S.A.), which has its own approach. Money and corporate law block relief. The state watches as businesses take their time to do what should be done with speed. Privatization turned over the responsibility to these firms, which are accountable only to their owners and shareholders. The customers, knee-deep in water and without electricity, cannot call to complain. Their phones are not working.
Rosa Perez, a journalist with Abayarde Rojo, told me a story about the town of Utuado, 104 kilometres south-west of San Juan, high up in the mountains. The Vivi river that flows near the town has been filled with debris, which broke the town's bridge. The 33,000 townspeople who live in this coffee-producing area have united to help each other, according to their Mayor Ernesto Irizarry Salva. They call themselves the "campsite of the forgotten" and find the means to take care of themselves. To ford the river, they have built a bridge using some wood and have dangled a shopping cart on a rope to send supplies across it. The hospital is in poor shape, so the residents are trying to take care of the indigent in whatever homes remain functional. The residents have rediscovered old springs in the mountains that have long been forgotten. They are now their source of water, which is carried down in bottles and buckets.
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