Wednesday, July 29, 2015

Puerto Rico Austerity

In Puerto Rico over 13 percent of people are unemployed, 45 percent of people live below the poverty line.

Hedge fund managers and bondholders are pressing the government of Puerto Rico to drive through a series of punishing austerity measures, including dramatic cuts to public education and workers' rights protections. A group representing $5.2 billion of debt held by 38 investment managers paid three former economists for the International Monetary Fund, who now are employed by the firm Centennial Group International, to devise policy recommendations in response to Governor Alejandro GarcĂ­a Padilla's claim last month that Puerto Rico's $72 billion debt is "not payable."

The report urges slashing public programs—particularly education—and privatizing assets and industries including proposals to: "Reduce number of teachers to fit the size of the student population; Reduce subsidy to University of Puerto Rico; Cut excess Medicaid benefits."

Puerto Rico's government has already closed 100 schools in 2015 alone. Puerto Rico's teachers' unions have vigorously opposed attempts to drive through cuts, and in May, thousands of educators and students took to the streets and staged strikes to protest a proposed $166 million cut to the University of Puerto Rico's budget.

The study also recommends "structural reforms" to regulations and worker protections, including calls to: "Amend local labor laws regarding overtime, vacation time, mandatory bonuses, and others;" and changes that would "make welfare benefits consistent with local labor market conditions."

The report calls for taxpayers' money to be put towards "public private partnerships" to construct or operate buildings and ports.

Activist Vijay Prashad recently argued that the government embraces the IMF agenda of privatization and cutbacks: "Garcia Padilla continues to use the word 'sacrifice' in his speeches. The question asked by Puerto Ricans is why such a word is only used against ordinary people and never against the bankers."

From here 

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