Puerto Rico: Five Years of Recession

July 1st, 2011
in econ_news

puerto rico flag Econintersect:  An extended recession has severely affected life in the U.S. Commonwealth of Puerto Rico.  It started before the the official recession in the states and is still ongoing.  Instead of stimulus in 2009, newly elected governor Luis Fortuno, whom the BBC calls a rising Republican star, instituted austerity measures because of the deficits that the government was running.  The result has not yet returned the economy to recovery, as unemployment is double that in the states.

Follow up:

As might be expected, there has been increasing social unrest on the island.  From Al Jezera:

Dozens of university students are arrested for demonstrating against a tuition hike. But Puerto Rico Governor Luis Fortuno remains steadfast in charging students more to help close a $3.2 billion budget gap.

The students' fight is representative of a larger debate in Puerto Rico, and in the US, about how to solve a severe budget crisis - and at what cost.

Fortuno, a hawkish fiscal conservative, laid off 20,000 government workers in 2009, and suspended all labour negotiations, just like governors on the US mainland are doing today. But two years later Puerto Rico's labour unions are still scrambling to reorganise a largely unemployed population - nearly 17 per cent.

Puerto Rico is in its fifth year of recession, and expected to be the world's slowest growing economy if its situation does not improve. At question is the degree of economic and social responsibility the US has to its commonwealth state.

The BBC has a short video on the situation, below:

Puerto Rico BBC

Al Jazeera has a much longer video:

puerto-rico-al-jazeera

Sources:  Al Jazeera and BBC

Hat tip to Roger Erikson.









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