The vultures of imperialist finance capital encircle Puerto Rico

But the people are fighting back!

Proletarian writers

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Ricardo Rossello, comprador governor of Puerto Rico.

Proletarian writers

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In recent weeks, workers and students on the US-occupied Caribbean island of Puerto Rico have been ramping up their militant opposition to the puppet government’s ‘mega-austerity’ programme, imposed after the colony declared bankruptcy in the wake of a $70bn debt crisis.

Governors of Puerto Rico have been formally rubber-stamped by popular vote, rather than overtly selected by Washington, only since 1947 – and electors still have little substantive choice, as the two main parties are both hell-bent on shifting the full burden of the economic and social crisis onto the shoulders of the working class.

Incumbent governor Ricardo Rosello heads the New Progressive Party, which seeks to represent the interests of the comprador bourgeoisie – a sector of the local ruling class whose fawning on US imperialism has served it very well until now and has led it to advocate Puerto Rico’s formal incorporation into the US as the country’s 51st state.

Speaking for different interests – those of Puerto Rico’s aspiring national bourgeoisie – is the Popular Democratic Party of Alejandro Padilla, which advocates continuing ‘commonwealth’ (ie, colonial) status for Puerto Rico but with greater political and economic autonomy.

The workers, pensioners and young people of the island can gain nothing from the policies of either of these thoroughly reactionary parties. Rosello is, as we shall see, launching an attack on the working class of unprecedented proportions, with Padilla merely suggesting this might be toned down a bit.

The national-liberation movement

It should not be assumed, though, that independence for Puerto Rico is a dead issue among its people; far from it. Freedom fighter Oscar Lopez Rivera, one of the island’s best-loved sons and one of the world’s longest-serving political prisoners, has just been welcomed home after 35 years imprisonment in a US jail.

Comrade Lopez, a communist and a leading member during the 1970s and 80s of the former Armed Forces of National Liberation (FALN), was greeted by jubilant crowds at San Juan airport – joy tempered by an incandescent rage against the latest all-out offensive of US imperialism and its local lackeys. Lopez helped organise, and took part in, a series of armed revolutionary operations on US soil some decades ago and paid for it with his personal freedom. But the Puerto Rican people have been occupied, oppressed and exploited since the early 16th century, so the struggle waged by the FALN was by no means the first.

First it was the Spanish empire that occupied the island and then, after the Spanish-American War of 1898 (fought in the early years of the imperialist stage of capitalism), it was the US monopoly bourgeoisie and its state that took over. It’s the US’s corporations, with their purchase of bond issues from a docile puppet regime, that have prompted the present debt crisis.

“Throughout this half a millennium of history, our nation has fought back,” says the Socialist Front, a mass community and trade union-based alliance of which the Puerto Rican Communist Party is an affiliate. “The US transnationals may tell Rosillo he’s bankrupt and they want their money back, but our people know who must pay – and it’s not us. We will not sit down in the face of mega-austerity and the systematic impoverishment of our working people.

“And who’s really in debt, anyway? Some 17 billion dollars have been ‘invested’ in Puerto Rico and then 51 billion taken out of our country by the US-based corporations. If our maths is right, that’s a net 34 billion that they owe us.”

Origins of the debt crisis

So where did the Puerto Rico debt crisis originate? What policies has the local ruling class – under US imperialist diktat – imposed in order to deal with it? And what forms has popular resistance taken up till now?

Puerto Rico’s small size and lack of natural resources means that it is heavily reliant on imports, while the cash flow needed to buy in commodities from abroad is wholly dependent on US-based transnationals (via the taxes and wages they pay, as well as through direct purchases). Until 2006, these monopoly capitalist vultures were fully prepared to oblige. Then things changed, as we shall see.

For decades, there were plenty of profits to be made on an island where the US minimum wage doesn’t apply, with 45 percent of the population living below the statutory poverty line as a result. Official unemployment stands at 13 percent, more than twice the average of that in the 50 US states, so a further reserve of cheap labour was readily available.

Puerto Rico today depends to a large extent on its service sector: insurance, real estate, tourism and, above all, the organised (and perfectly legal) manipulation of financial markets.

On the manufacturing side, where real workers create real wealth, there are textiles, petrochemicals and electronics. By far the largest single industry, however, is pharmaceuticals. Some 80 plants — owned by 30 or so of the biggest drugs companies — account for 80,000 jobs, fully a quarter of the island’s gross domestic product (GDP) and a half of its exports.

Among these giant capitalist conglomerations are Johnson & Johnson, Glaxo-Smith-Kline and Pfizer. This latter firm has a monopoly on the production of Viagra, and all of those little blue pills swallowed in the United States are manufactured in Puerto Rico. Pfizer are probably alarmed that their profits, if nothing else, have ceased to go up.

The drugs magnates pay an annual $3bn to Washington in direct taxation, and it used to be the case that they could repatriate their profits from Puerto Rico to the US with no further tariffs imposed.

Then, 11 years ago, the regulations allowing this tax-free movement of capital lapsed. Confronted by the resulting drop in profits, the pharmaceutical companies hedged their bets by stepping up the purchase of bonds issued by the San Juan puppet regime and by various local authorities.

Their faith in the long-term liquidity of the Puerto Rico public sector proves to have been misplaced, however. Lending to governments is supposed to be a fairly risk-free bet, and no doubt expected dividends were higher than could be guaranteed from productive activity during a deep crisis. However, each year since 2006 has shown a ‘negative cash flow’ for Puerto Rico’s government, resulting in debt now amounting to a whopping 66 percent of GDP, creating not just a recession, but an official depression.

Imperialists wield the knife and workers fight back

The corporations are now seeking to redeem their bonds for cash, but the island’s current governor has been forced to tell them that Puerto Rico simply can’t pay. He has taken the unprecedented step of formally registering the island’s imminent default, something which would constitute a bankruptcy application and would lead to debt-relief measures were Puerto Rico a US state and not a colony.

A ‘financial control commission’ has been set up to adjudicate the matter, but, given its colonial status, Puerto Rico will have no representatives on that board and its politicians will not be allowed to testify before it. What we will be seeing is the US government – the executive committee of the monopoly bourgeoisie – chatting with powerful sectors of that same bourgeoisie about the way forward – for them, of course.

Of particular concern is that one of the members of this finance commission is a certain Andrew Biggs, credited with having led attempts fully to privatise what passes for a social security system in the US.

But, the board’s questionable personnel aside, the people of Puerto Rico can be sure that any settlement will involve a further ramping up of the attacks on working-class living standards, something already being unleashed in the wake of the insolvency announcement.

That announcement — accompanied by a raft of measures aimed at slashing education, housing, healthcare and social security – came just before May Day this year, so that the Puerto Rican Workers’ Centre and other trade union bodies had just enough time to turn the traditional International Workers’ Day celebrations into an unofficial general strike.

The strike continued for a further four days, and workers in key sectors of the economy, including those at Glaxo and Johnson & Johnson, are continuing a work-to-rule against redundancies and real-terms pay cuts. In light of what awaits them at the hands of an increasingly angry and militant workforce, Johnsons may want to reassess the validity of their baby shampoo slogan ‘No more tears’.

Meanwhile, with the Puerto Rican government’s tame accountants casually mentioning that this new onslaught would amount to an across-the-board 10 percent cut in public services, and in education at all levels facing an even higher proportion of the burden, protests have spread far and wide.

The planned cut in pensions and welfare benefits has resulted in militant demonstrations at – and occupations of – dole offices throughout the island and a lawsuit against the US government launched by the retired members’ section of the United Public Servants’ union.

In the healthcare sector, doctors, nurses and hospital support staff have united via sit-ins and 24-hour vigils to defend Medicare – the meagre and viciously means-tested US-style ‘safety net’ for poor and elderly patients – and to frustrate attempts by the San Juan regime to dismantle it.

In response to a 12 percent hike in water rates, a San Juan pub sympathetic to the Socialist Front and the growing anti-austerity resistance movement organised a fundraising evening, where beer and wine were free but a pint of H2O would cost you £5.

Simultaneously, tenants of ‘the projects’ – roughly equivalent to council housing in Britain – have begun an indefinite rent strike in opposition to planned sell-offs and a probable 20 percent rent increase.

By far the highest burden, though, is falling on education. Some 180 primary and secondary schools have already been closed, with teachers laid off and pupils bussed to neighbouring towns to sit in horrendously overcrowded classrooms with fewer teachers.

People have been fighting back, though. Direct action by teachers and pupils – with the support and participation of their parents – has resulted in 50 arrests and as many tear-gas victims.

The same has been true in higher education, where the new US-imposed financial constraints have resulted in a demand for $450m worth of cuts over the next three years. Students are not having it and, at all 11 campuses of the University of Puerto Rico, they and their lecturers chained themselves to the entry gates and closed the place down.

This is class struggle on the ground and at first hand.

In calling for an immediate end to mega-austerity in Puerto Rico, we send our full solidarity to the Puerto Rican people and join their call for national self-determination.

“The working people of our country,” says the Puerto Rican Communist Party, “are facing an unprecedented social onslaught at the hands of Yankee imperialism and its local puppets.

“The question of independence, and then a people-centred route forward, is higher on the agenda than ever before. We are a proud people who have never given in. We won’t stop fighting now!”