The Economic Potential of a Sovereign Puerto Rico

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After 123 years of U.S. colonial rule in Puerto Rico, today we see a bankrupt Caribbean nation trying to lift itself up economically while confronting the ever-present fact that colonies are not meant to develop but instead have their wealth extracted by the colonial power. Whenever anyone brings up the possibility of sovereignty for Puerto Rico—either through independence or free association—detractors promote the perception that a free and sovereign Puerto Rico, no longer under U.S. colonial rule, would not have the wealth, ability, or resources to sustain and develop itself. 

This perception, embedded in the colonial mentality, stems from the racist belief that Puerto Ricans are an inferior people that could never govern themselves and should be grateful for American rule, occupation, citizenship, and tutelage. All colonial powers and their local colonial collaborators, including the statehooders and colonialists, promote this perception in the colonies because it ultimately consolidates their colonial rule, since it’s easier to control a people when they have learned, after 123 years of U.S. colonial education policies, to despise themselves and actually begin to believe that they lack the political and economic capacity to rule themselves. Such myths and perceptions about Puerto Rico’s ineptness to excel and succeed politically and economically have been promoted for over a century.

My upcoming book, Puerto Rico: The Economic Case for Sovereignty, seeks to destroy this perception and explains in detail how Puerto Rico can transform itself from a dependent and bankrupt colonial economy into a thriving, stable, and internationally focused and export-driven national economy with the powers and tools of sovereignty, either as an independent nation or a sovereign nation in a free-association relationship with the United States.

Puerto Rico: The Economic Case for Sovereignty (which is the English edition of Desarrollo y Prosperidad: el éxito económico en un Puerto Rico soberano) aims to educate the Puerto Rican nation and Americans about the benefits, opportunities, and the great economic potential that sovereignty and nationhood would offer Puerto Rico. The book explains, with current data and economic projections, how Puerto Rico will be able to generate billions in additional revenue to operate its national government and also finance socioeconomic development projects and opportunities that would make Puerto Rico a regional economic powerhouse in the Caribbean and Latin America. Essentially, this book finally answers the question: Where will Puerto Rico get the money to succeed as a sovereign nation?

The book details how a sovereign Puerto Rico, with its own integrated customs, tariff and immigration policies at all its ports of entry, could generate approximately $12.5 billion a year—pretty great when one considers that the entire operating budget of the colonial Commonwealth government is approximately $9 billion (97.6 percent of these funds are from sales, income, and corporate taxes in Puerto Rico, not federal funds). 

Also, the book lays out how the U.S. sends $4.6 billion a year to Puerto Rico as “federal aid” while extracting approximately $59.3 billion a year via captive market-driven U.S. imports, untaxed capital flight, and the onerous costs of the Jones Act, which forces Puerto Ricans to subsidize the expensive U.S. Merchant Marine shipping cartel—thus showing Puerto Ricans and the world how efficiently the U.S. colonial regime extracts wealth and creates poverty and underdevelopment in Puerto Rico, the very same poverty and underdevelopment detractors say is the reason Puerto Rico cannot afford sovereignty. 

The U.S. colonial regime creates the poverty and then says that Puerto Rico is too poor to be free. It’s like a slave who is not allowed to create his own wealth being denied his freedom under the excuse that he is too poor and helpless to be free. Puerto Rico has the potential to be a wealthy and economically powerful nation, if only it weren’t under the failed, corrupt, and undemocratic authority of U.S. colonial rule and foreign occupation, as exemplified by the imposed U.S. Fiscal Control Board (La Junta) which literally controls Puerto Rico’s finances and economy. While some pro-statehood and pro-dependence Puerto Ricans prefer the equality in federal funds (food stamps, etc.) that statehood would offer, most Puerto Ricans value their culture and their national identity, preferring instead the “equality among nations” that sovereignty would grant all Puerto Ricans.  

The book also presents a comprehensive national fiscal and economic development plan and policies modeled on the principles of state capitalism and free trade that would allow a sovereign Puerto Rico to generate up to $63.4 billion a year, revenues that would make Puerto Rico one of the wealthiest nations in the Caribbean and Latin America. With a sovereign Puerto Rico, the days of colonial poverty, underdevelopment, and begging for federal funds from Congress would be over.   

Yes, Puerto Rico is currently poor and lacks proper economic development, but who currently controls Puerto Rico’s economy and ports of entry? Not Puerto Rico, but the United States. The Thirteen Colonies were also poor under British colonial rule and only as an independent nation was the fledgling “United States” able to set the foundations for a powerful economy. Thus, Puerto Rico’s lack of economic development is intimately tied to Puerto Rico’s colonial status and U.S. federal laws that extract billions from Puerto Rico. These federal laws and colonial policies, such as the Jones Act, the Interstate Commerce Clause of the U.S. Constitution, and other nefarious federal policies, also hinder economic development in Puerto Rico and further isolate it from the international economy.  

Both a continued colonial Commonwealth status and statehood (annexation) would only strengthen and consolidate these federal policies and economic limitations on Puerto Rico, guaranteeing that Puerto Rico would not be able to develop economically and become dependent on billions of dollars of federal funds—paid for by American taxpayers. I doubt American taxpayers want to spend billions of dollars to pay for and subsidize colonial dependence in Puerto Rico, prop up the corrupt and pro-dependence statehooder-colonialist leadership, and also have to deal with a defiant Puerto Rican nation that refuses to assimilate and integrate itself into the American mainstream. In essence, for Americans, Puerto Rican sovereignty and national emancipation make political and economic sense.  

If statehood were ever imposed on Puerto Rico, the island nation would literally become “The Poverty State” as the island economy would shrink, entrenching poverty for generations to come, and become utterly dependent on the U.S. Congress for more federal funds year after year. Sadly, statehooder and colonialist politicians in Puerto Rico promote such pro-colonial and pro-poverty policies in order to maintain the colonial structures that give them local power and wealth. 

There is a different path, the path of sovereignty and economic development. In order to lead Puerto Rico down the path of economic growth and development, Puerto Ricans in Puerto Rico and in the diaspora need to embrace the opportunities and dignity of sovereignty and leave behind the era of colonialism, foreign occupation, and colonial corruption. Thankfully, more Puerto Ricans (as indicated by trends of growing electoral support) are realizing that sovereignty is the way forward—not only to defend the future of the Puerto Rican nation and establish a free and democratic republic, but also to create the successful national economy that we deserve.    

In addition to educating Puerto Ricans and others about the economic viability of sovereignty, the book shows how other small countries are taking advantage of their geographical, political, economic, and human capital advantages to be influential countries in the international economy, particularly in this new era of globalization.

With sovereignty, Puerto Rico will finally have access to global markets and be able to forge and establish a national economy based on production and exports, not colonial handouts and dependency, that can lift the country out of colonial poverty and fully insert itself into the international economy for the benefit of the entire Puerto Rican nation. This book shows the path to freedom that Puerto Rico must take to ensure its future as a nation and its economic success in the world.

***

Puerto Rico: The Economic Case for Sovereignty; Desarrollo y Prosperidad: el éxito económico en un Puerto Rico soberano; and Puerto Rico: Hacia una economía nacional soberana will be available in Amazon.com, Libros787.com, and various other Puerto Rico-based bookstores. 

 

Featured photo by Lorie Shaull/CC BY-SA 2.0

Javier A. Hernández is a Puerto Rican writer, small business owner and pro-sovereignty activist based in New Jersey and Puerto Rico. He is the author of 'PREXIT: Forging Puerto Rico’s Path to Sovereignty,' 'Puerto Rico: The Economic Case for Sovereignty,' 'Desarrollo y Prosperidad: el éxito económico en un Puerto Rico soberano,' and 'Puerto Rico: Hacia una economía nacional soberana.'

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