Status and the economy

by John Marino

August 26, 2005
Copyright © 2005 THE PUERTO RICO HERALD. All Rights Reserved.

. When Gov. Acevedo Vilá’s term in office is up, Puerto Rico will likely have experienced eight years of status inertia. His predecessor, Sila Calderón, made sure no action on status would be taken when she insisted on a consensus in San Juan before broaching the issue in Washington.

And Acevedo Vilá blew a golden opportunity to get real movement on the issue when he vetoed tripartisan status legislation that was unanimously passed by the Legislature.

Calderón’s heart never appeared to be in the issue; even, I think, her own Popular Democratic Party knew that. And after eight years of nearly constant pushing on the issue during the two administrations of former Gov. Pedro Rosselló, the Puerto Rican public may have very well welcomed the respite from status, and may have voted Calderón into office partially because she gave every indication that status would not be a priority in her administration.

Acevedo Vilá has no such excuse, however. A pledge to push the status issue, and specifically a constituent assembly on status, worked to solidify his support within the PDP after José Alfredo Hernández Mayoral suddenly and unexpectedly rebuffed an offer by PDP elders to run for governor.

And Acevedo Vilá’s open call to independence supporters to back his candidacy in the waning days of the 2004 campaign carried with it certain obligations on the issue. Indeed, it was a Puerto Rican Independence Party-brokered accord that won unanimous legislative backing that Acevedo Vilá killed with a stroke of his pen.

The direct effect of that veto was to stop movement on status in its tracks.

The Congressional Research Report, released in May, said Puerto Rico, with the unanimous passage of the bill, has "taken one of the more significant steps in recent years to resolve the status dilemma."

It would have culminated with a referendum calling on Congress and the White House to take action to resolve the island’s status. If Washington failed to act within a certain time, a local constituent assembly on status, backed by the PDP and PIP, would have been created.

The importance of the status legislation is also given weight by historical statements by U.S. political figures, including former President Dwight Eisenhower, who at the time of the formation of commonwealth said that a change in status would be granted if Puerto Rico’s Legislature requested it.

The momentum on status is also encompassed by the release of a White House Task Force report by year’s end aimed at "clarifying" the status options available to Puerto Rico. The CRS report states that the White House findings "may serve as another catalyst for change." But the governor’s veto has probably blunted White House enthusiasm on taking action on status.

Meanwhile, Puerto Rico is now in the throes of an economic crisis, which may be the worst the island has seen since the 1970s oil embargo. The government has a $1 billion deficit, and the split in power between the PDP-controlled administration and the NPP-controlled Legislature has resulted in gridlock — nowhere more in evidence that in the failure to pass a budget. Increased taxes and utility costs are threatening wherever one turns in Puerto Rico, the commonwealth’s credit has been downgraded, and long-range plans to reform the current tax system and bloated government bureaucracy have failed to materialize. The economic landscape has not looked this twisted in a long time.

I would argue that Puerto Rico’s economic concerns are more pressing than resolving the century-old status dilemma, which was preceded by a previous, similar 400-year dilemma under the Spanish flag. And many proponents of status change would accuse me of naiveté for suggesting that status was less a priority than government and economic reform, mere symptoms of the colonial condition.

I’ll note I said "pressing," meaning in need of more immediate action. And I would concur with such critics about the intertwined nature of the current economic woes and the status debate. After all, commonwealth and Operation Boostrap were born at the same time.

The current debates, on both the status and economic fronts, are about refining those twin developments more than half a century ago. The status and economic developments of the 1950s represented historic strides in political development and improved standards of living in Puerto Rico. But both may be outmoded models in today’s worlds.

The island’s manufacturing sector can remain healthy, but the overall economy’s reliance on it must be diversified. An unfortunate byproduct of Bootstrap, a policy to use the government to create jobs, continues to this day. Indeed, if there is any agreement on the current economic debate, it’s that the huge government bureaucracy is the primary cause for the island’s economic woes.

Meanwhile, the inexact nature of the current commonwealth status continues to be a source of inspiration for action on status. Even populares want the commonwealth overhauled.

Unfortunately, status and economic and government reform are also linked by their ability to ignite friction between the major political parties and an ensuing lack of development on solutions along these fronts.

The Acevedo Vilá adminstration is responsible for stunting the debate on status. That is clear.

But the jury is still out on which side, the administration or the NPP Legislature, is being more obstructionist on the pressing concerns of government fiscal reform.

John Marino, Managing Editor of The San Juan Star, writes the weekly Puerto Rico Report column for the Puerto Rico Herald. He can be reached directly at: Marino@coqui.net

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