Puerto Rico’s economic and political plight

Puerto Rico’s economy is collapsing under the weight of a high unemployment rate of 14.7 percent and a dramatic reduction of more than 18,000 people from the labor market this year alone. If that wasn't enough, now we face the real possibility that our bonds will be devaluated into ‘junk’ status by the beginning of March. In short, we are in the middle of the perfect economic storm.

Our government owes billions of dollars to bond holders, which was borrowed through the years to cover urban projects and other obligations due to the lack of full access to federal capital and economic programs.

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The main problem with the island’s economy is the uncertainly about its political status and future. Investors are filled with jitters regarding our political path and with good reason.

The current political status is basically a “limbo” for investors, full of bureaucratic red tape and the impossibility of changing its fiscal and economic structure in order to lure national and international companies to ours shores.

Because of our colonial status we are unable to move forward on the economic front.

Also due to this “limbo” we don’t have full access to the whole spectrum of federal financial aid and benefits that could be employed to jumpstart the economy, as has been the case with several US cities recently.

Here lies the problem, and the solution is in Washington’s hands.

This year we marked the 115th anniversary of the United Sates acquiring sovereignty over Puerto Rico. Almost a century and a quarter of colonial rule have placed the island on the brink of an historic economic meltdown the likes never seen in a U.S. jurisdiction.

The American citizens living in Puerto Rico deserve much better than having the economy destroyed because of inaction by the Congress.

In November 2012, the people on the island voted overwhelmingly, 61 percent, to join the Union as its newest state. This historic event was followed by a formal admission petition to Congress in the form of the HR 2000 bill, which was filed this past March.

Despite those actions this Congress has failed to act.

Puerto Ricans living in the States are well represented in Washington D.C. They represent a strong voice which senators and representatives listen to, especially in these dire economic times.

Targeted legislation has been passed to promote economic recovery in districts where Puerto Ricans constitute a strong voting bloc, and that’s the proverbial “rabbit in the hat.” Puerto Ricans in the State have all their rights, including the ability to influence their local representatives to move forward legislation in the Congress. The American citizens on the island do not have that tool.

Ironically, congressmen have to deal with the massive migration from Puerto Rico to the States. Those American citizens who leave their beloved island, mainly due to the economic distress, are now in the hands of their “new” elected official, who is responsible for providing financial security for them. Why not for the people living in Puerto Rico?

If Puerto Rico’s economy goes south, one of the main culprits will be this Congress.

It’s not too late to act.

If investors see action by Congress to enforce the results of the 2012 status plebiscite, the downgrade will almost certain be called off as there will be assurance of political stability and the prospect of Puerto Rico having full participation on all federal programs.

This is the route we urge Congress to take. As said in a famous quote, “give us the tools, and we will do the job.” Congress should act now and enforce the will of the people of Puerto Rico who voted for statehood.

Hernandez is a former Speaker of the Puerto Rico House of Republicans, 2005 to 2009.