On Economic Development in Puerto Rico
After more than four years of legal debates and hurdles, last week marked a crucial milestone in Puerto Rico’s central government bankruptcy ordeal when a federal judge signed off on the territory’s debt restructuring plan. That plan will significantly reduce the central government’s multibillion-dollar debt, providing much needed relief to the residents and local institutions that have been bearing the brunt of the financial burden for years. At last, Puerto Rico will have a fighting chance at building a new economic future.
But charting a new course for Puerto Rico won’t be easy. The financial instability of the last several years has driven down the labor force participation rate and the poverty rate has risen to more than three times the U.S. national average. A devastating series of catastrophic natural disasters—Hurricanes Irma and Maria in 2017 and multiple earthquakes in 2020—have only deepened the crisis. And despite commendable vaccination efforts, the ongoing COVID-19 pandemic continues to generate even more instability.
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