Puerto Rico one year later: Small businesses shut down with no economic recovery in sight

Global Business

Puerto Rico one year later: Small businesses shut down with no economic recovery in sight

It is the anniversary of one of the deadliest and costliest disasters in US history, Hurricane Maria. The Category 4 storm made landfall in Puerto Rico on September 20th, 2017. The natural disaster came on top of an island already crippled financially. Puerto Rico sought bankruptcy-type relief in May of last year. The move was in response to a crushing burden of $74 billion in bond debt and $49 billion in pension obligations. This was before Hurricane Maria ravaged the island and obliterated its power grid. Many left. Even more were convinced to leave after the storm.

CGTN’s Nitza Soledad Perez reports.

Overwhelmed by the hardships of operating in Puerto Rico, Ivan Nieves and his business associate David Flores packed their bags and opened a version of their San Juan restaurant in Miami.

“So when we got here I think the first thing we started to think about was a lot of people were leaving. Our customers are probably leaving. Condado is touristic and families have been able to work but big companies and a lot of the companies are closing too so it was like our customers already left so what are we going to do. Either we stay and we try it and see what happens or we just react to ourself we rethink everything and we try it again in another place,” says Ivan.

His life partner David agrees, “All the services there are public: electricity there is public, water is public. There are so many obstacles, small businesses have to go through, employers have to go through… it just makes it so hard for anyone to succeed that people end up leaving for a reason or another.” The search for better economic conditions is the number one reason.

Back in 2016, then U.S. President Barack Obama established an oversight board to guide the territory through its debt crisis. Their mandate was to straighten out the island’s finances.

“Puerto Rico had access to capital, and used it to maintain services and delay the day of reckoning.” said Ana Santos, a member of the Financial Oversight and Management Board for Puerto Rico

An independent report on the “why’s” of this fiscal crisis were recently presented to the board. Matosantos summarized it.

“Bottom line, Puerto Rico faced massive problems and decided not to confront those head-on. This was done by government, elected and unelected. It was done with knowledge of stakeholders, including business leaders, civic leaders, labor and others. And it was enabled by financial institutions, rating agencies, the retail markets and most recently the hedge funds.”

The board has implemented austerity measures. Nearly 300 public schools have closed. Holiday bonuses for government employees are gone and the scholarship fund for the island’s largest public university eliminated.

Thousands joined a general strike back in May to oppose the board and its mandate.

Juan Correa is a member of the Dignity Coalition. His organization led a silent protest during the last board meeting.“They are not doing anything here. They are excusing those that are responsible for this mess. And we reject them and this is just a charade. We do not support the board and we reject all their austerity measures.”

Locals disagree on the route out of the fiscal crisis, but many Puerto Ricans are not ready to give up.

Ivan and David decided to give the island a second chance. They reopened their store in Puerto Rico. Ivan explains why: “I think at the end it was the community, who pushed us to open up because, at Puerto Rico’s store, lights are something like this, but you can see it from the entrance to Condado Avenue, so whenever you are in La Ceiba, Condado the entrance, you are able to see the corner of the store and you see the lights, so I will remember this lady coming in and saying, ‘Nene, you are not able to shut down those lights, those are the hot lights for Condado, you can’t shut them down.’”

And they did not.

Arelis Hernandez on Puerto Rico’s economy a year after hurricane Maria

CGTN’s Jessica Stone spoke with Washington Post reporter Arelis Hernandez about the state of financial recovery in Puerto Rico.