As It Recovers, Puerto Rico Needs More People and Freedom

April 18, 2018
 
  
  
  
  
Puerto Rico stopped paying interest and principal on its debt two years ago, and near-term prospects for bondholders remain bleak. While a federally-appointed financial control board spars with the commonwealth's governor over a fiscal plan, creditors are engaged in drawn-out bankruptcy proceedings in which different classes of bondholders are fighting each other as well as the government. Meanwhile, the island is struggling to recover from Hurricane Maria, which took more than 1,000 lives, devastated local infrastructure and left millions without power for months. Now that the immediate crises have lessened, it is time for the federal and commonwealth governments to consider deep structural reforms—including innovative policies like territory-specific work visas and special economic zones—to rejuvenate Puerto Rico's economy, fix its broken public finances and provide bondholders a decent recovery.