Puerto Rico Faces Uncertain Future Amid Debt Crisis
AUDIE CORNISH, HOST:
Puerto Rico's future largely depends on what Congress decides to do to help the U.S. territory. It's about to default on yet another bond payment in January - this time, $37 million. Puerto Rico's total debt stands at about $72 billion. And without some kind of help, further defaults are all but certain.
ROBERT SIEGEL, HOST:
Politicians on the island say the U.S. government should allow the commonwealth to access Chapter 9 bankruptcy. Puerto Rico's ability to do that was written out of the bankruptcy code back in 1984. I talked about that demand to change that with Luis Vega Ramos. He's a member of the Puerto Rico House of Representatives. He joined us in the middle of his vacation at Disney World.
LUIS VEGA RAMOS: What we're asking is what any business, what any town, what any municipality in the United States has available - the ability to orderly restructure its debt, the chance to have our case heard and that we can sit down and get an agreement that permits an orderly payment of our debts, but, at the same time, that doesn't break down Puerto Rico.
SIEGEL: Unemployment in Puerto Rico is measured at about 12.5 percent. Since 2004, the population of Puerto Rico has declined by about 10 percent - largely people moving to Florida. What's it like? I mean, do you have relatives who've decided, I can no longer support my family here on the island, I'm moving to Kissimmee or to New York?
RAMOS: There are a lot of Puerto Ricans who have moved in the last five to 10 years. And that's a problem for Puerto Rico and the United States because some of the most productive, useful persons are moving. And that's not helping our economy.
SIEGEL: The people who can find good jobs in Florida, you'd say?
RAMOS: Right. And the key to fixing the whole problem is to jumpstart the Puerto Rico economy and to ease the enormous burden that the current structure of the debt has over Puerto Rico. So instead of positioning ourselves for a bitter fight, whether it's Puerto Rico and creditors, or whether it's the creditors amongst themselves because if we start litigating, it's going to end up - everybody suing everybody else, probably including the federal government because some may argue that being Puerto Rico - a territory of the United States - the territorial debt is also federal debt. So what I'm advocating strongly is let's sit down, let's structure a deal that is good for us. And the first step in that deal will be take measures that ease the current burden of the debt so that we can restart our economy. And when that happens, everything else will fall into place.
SIEGEL: Here's something that skeptical creditors of Puerto Rico say - they say, we'd like to see an audit. They just gave out an annual bonus of 13 months paid to civil servants on the island. That's not something you do when you're broke and you have no cash reserves. What do you say to that?
RAMOS: I agree that we have to get our audit out, and that's something that us in the legislature are also clamoring. All of us are in agreement that those numbers have to be out and they have to be certified and audited.
SIEGEL: Why hasn't that happened already? Why hasn't that taken place?
RAMOS: Well, we've had a problem for the last two years, and that's something that - probably that the government - the Development Bank of Puerto Rico and its president have to explain in a clearer fashion. And I'm not satisfied with that. And that's a part of the equation that I understand is very important in order to finalize a deal. But that shouldn't be an impediment for talks to start because, quite frankly, Puerto Rico cannot make those payments how they are structured. So instead of going into the abyss together, let's, you know, halt a moment, create conditions to have a restructuring and let's get on doing that.
SIEGEL: Representative Vega Ramos, thanks a lot for talking with us today.
RAMOS: Thank you very much.
SIEGEL: Luis Vega Ramos is a member of the Puerto Rico House of Representatives. He spoke to us while on vacation in Orlando.
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