Puerto Rico was in financial trouble before Hurricane Maria. Now its crisis is almost existential
“This is, without a doubt, the biggest catastrophe in modern history for Puerto Rico,” Governor Ricardo Rosselló said after Hurricane Maria pummelled the US territory with floodwaters and 155 mph winds. He declared that his priorities were “not a fiscal consideration. It’s restoring people’s security and restoring normalcy.”
Normalcy, however, is something Puerto Rico hasn’t experienced in a while. That’s because the government is essentially bankrupt. Years of runaway borrowing to plug budget shortfalls, a decade-long recession, and the exodus of residents seeking work in the mainland US pushed the commonwealth in May to seek creditor relief from nearly $74 billion of debt, the nation’s biggest municipal bankruptcy. The island’s budget and spending now have to be approved by an oversight board appointed by the federal government. That board says that Puerto Rico can use only $1 billion from its budget to deal with hurricane damage. The tab for Maria’s destruction could reach $30 billion.
There are dire and immediate consequences. For now, officials are rightly focused on people’s safety and bringing back power and running water, rather than calculating when and how much Puerto Rico can repay its bondholders, about a third of which are hedge funds. The government-owned electric utility, the largest US public power provider, has had its aging system ripped apart by the hurricane. US Department of Energy officials and American Public Power Association staffare working with the Puerto Rico Electric Power Authority, the island’s main electricity provider, to repair transmission lines and restore power.
Bu hikaye Bloomberg Businessweek Middle East dergisinin 16 October, 2017 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Bloomberg Businessweek Middle East dergisinin 16 October, 2017 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Golfing With The Enemy
Did Donald Trump's executives violate the Cuban embargo?
Super-Rich Syrians Wait for War's End
Actor, author, playwright. Gill Pringle tries her hand at unravelling the mystery behind this enigmatic multi-hyphenate
Pam Codispoti
The mastermind behind the industry-shaping Chase Sapphire Reserve Card sets her sights on banking
This Time It's The Economy
President Rouhani’s budget sets offprotests from people angry about unemployment and inflation
Saudi Prince Counts On Support Of Citizens
State-worker salary increases appeal to the people, but policy may throw the budget off track
Stalin's Legacy Is Choking The Ukrainian Economy
The government has resisted pressure to lift a ban on land sales, despite pressure from the IMF and investors
Catastrophe Bonds Survive A Stormy Year
The turbulence of 2017 couldn’t destroy a market for betting against disasters
Riding The West Bank's Credit Boom
Increased consumer lending is creating a bubble in the West Bank
You'd Be Crazy To Buy Pizza With Bitcoin
Speculative fervour makes the cryptocurrency clumsy for commerce
What If The President Loses His Party?
Trump has to figure out a way to work with Republicans in Congress, or the global economy may be at stake