Puerto Rico's current debt crisis has earned it many comparisons to Greece the most notorious being the German finance minister's recent tactless attempt at humor when he facetiously proposed "exchanging Greece for Puerto Rico" as a Eurozone member. The remark, like so many of its kind made by frustrated public officials, seem to blame the victim for a problem that is deeply tied to the historic problem of neo-colonial exploitation. One observation from the online journal, The Hill gave a prime example of how the neo-colonial status of Puerto Rico, and its economic subjugation by the US, contributed vastly to the intractable nature of Puerto Rico's debt crisis. Noting that the Island's debt is nearly $73 billion, most of which is owed to US bondholders, the author notes that;
"...as the borrowing crested during 2011-13, instead of accruing significant visible public improvements and infrastructure, the U.S. territory jettisoned two major toll roads and San Juanâs international airport to private parties in order to monetize their cash flows for about $1.8 billion. This was on top of more than $5 billion borrowed during this period...Foremost among the players in this decades-old drama were local politicians struggling to stay in office. They, in turn, received support from battalions of self-interested financial and professional service firms who stood to benefit from fees generated in bond deals."
This is a great example of how debt is applied everywhere to achieve privatization "through the back door" so to speak; lend a country, municipality, state owned enterprise money, generally through the bond market, and when recessions shrink tax base below levels allowing timely debt service, force privatization of public services at fire sales prices to global corporations so as to "monetize cash flows" for debt repayment. It should not surprise us that corrupt local politicians work such deals with "self interested" financial advisors who stand to personally benefit.
But Puerto Rico's current debt crisis is not just the result of corruption and financial cronyism. It is the consequence of decades of foreign domination and neo-colonial subjugation.
