Economic Development

Policy Brief: Possible Consequences of a Default on Puerto Rico General Obligation Bonds

Puerto Rico faces a serious fiscal and economic crisis. The island is over-indebted: with $70 billion in public debt outstanding and an additional $43 billion in unfunded pension liabilities, Puerto Rico has more debt, in absolute terms, than any U.S. state government except California and New York, while its economy is smaller than Kansas. The following chart compares Puerto Rico’s tax–supported debt (excluding debt issued by state-owned enterprises) and unfunded pension burden with three of the U.S. mainland’s lowest rated states.

Why Congress Should Act Now

Staff Briefing by Sergio M. Marxuach for the U.S. House of Representatives Committee on Natural Resources on April 28, 2016.

The Endgame: An Analysis of Puerto Rico’s Debt Structure and the Arguments in Favor of Enacting a Comprehensive Debt Restructuring Mechanism for Puerto Rico

Puerto Rico’s debt structure is inordinately complicated. With no access to a broad debt restructuring mechanism, the chaos that a disorderly default could bring would further erode bondholder value, increase restructuring costs, depress the local economy, and make long-term recovery harder to achieve.

Prioridades de CNE ante el Congreso de EEUU

La crisis económica y fiscal de Puerto Rico tardó años en gestarse y no se circunscribe exclusivamente al problema de la deuda pública. La raíz del dilema actual se encuentra en un modelo de desarrollo económico deteriorado y unas instituciones que han impedido el crecimiento. Por lo tanto, cualquier solución que adopte el gobierno federal debe reconocer la naturaleza compleja y plural de la crisis actual. A continuación esbozamos las recomendaciones principales del Centro para una Nueva Economía en relación al Puerto Rico Oversight, Management, and Economic Stabilization Act.

Puerto Rico se ha quedado sin certezas

El autor colombiano Juan Gabriel Vásquez escribe en su novela “Las reputaciones” que “las certezas adquiridas en algún momento del pasado podían dejar de ser certezas con el tiempo: algo podía suceder, un hecho fortuito o voluntario, y de repente toda evidencia quedaba invalidada, lo verdadero dejaba de ser verdadero, lo visto dejaba de haber sido visto, y lo ocurrido de haber ocurrido: perdía su lugar en el tiempo y en el espacio; era devorado y pasaba a otro mundo, o a otra dimensión de nuestro mundo, una dimensión que no conocíamos.”

There Is Another Way: A Fiscal Responsibility Law for Puerto Rico

Puerto Rico’s drawn-out economic and fiscal crisis has prompted a series of debates on how to address a rapidly deteriorating socioeconomic situation. Amongst the options being discussed in the federal sphere is the establishment of a fiscal control board for Puerto Rico, similar to the one adopted in Washington DC, that would essentially command all aspects pertaining to government budgeting and spending. We strongly believe that this is not the only way forward.

Pulling Out of the Quagmire: Can Puerto Rico’s Labor Movement Survive the Island’s Debt Crisis?

“We are a country who has just discovered that Santa Claus doesn’t exist, a kid who catches Mom and Dad assembling gifts under the tree on Christmas Eve. It’s a shock.” Iram Ramírez is Senior International Representative and International Coordinator of Field Services for the Office and Professional Employees International Union (OPEIU /AFL-CIO) in San Juan.