Tens of thousands protest as
Puerto Rico gov’t lays off 100,000
By
Tom Soto
San Juan, Puerto Rico
Published May 4, 2006 7:18 PM
Social unrest is
reaching a boiling point on the island of Puerto Rico due to a deepening
financial crisis.
Teachers protest on May Day in San Juan.
WW photo: Tom Soto
|
In September 2004, Moody’s Investor Services and
Standard & Poor’s, which do the dirty work for Wall Street’s
bond market investors, announced they were downgrading the credit-worthiness of
Puerto Rico’s bonds.
Moody’s pointed to a PR government debt
of $39 billion and a budget deficit in fiscal year 2004 of $1 billion. The budget deficit for the current fiscal year, which ends June 30, amounts to $750 million, at a time when the total public debt is already close to $45 billion. When calculated per capita
($9,958), the external debt of Puerto Rico is the largest in all of Latin
America.
For the last year, Gov. Anibal Acevedo Vilá, of the
Popular Democratic Party (PDP), and the PR legislature, dominated by the
pro-statehood New Progressive Party (NPP), have been imposing austerity measures
as demanded by the Wall Street investors: cutting public services, forcing the
early retirement of public employees, increasing the rates charged for
electricity, water, highway tolls and public transportation, increasing tuition
fees at the University of PR and more. (See Workers World Sept. 10 and Nov. 18,
2005, issues.)
Consumer sales tax
and the external
debt
The central theme being pursued by the Wall Street investors in
their “restructuring plan” for the Puerto Rican economy is the
imposition of a consumer sales tax. In 2004 the amount being floated was 9
percent. Interlocked within this web of massive external debt and a financial
crisis is the fact that, since 1898, Puerto Rico has been a colony of the United
States. Its economy is foreign-owned, primarily by U.S. corporations and
investors.
For the last three months, the two rival bourgeois parties (the
PDP and NPP) have been trying to persuade the public to view the current crisis
narrowly, in terms of a mere budget deficit dispute. The pro-statehood NPP has
proposed a 4 percent consumer sales tax, while the PDP proposes a 7 percent
sales tax. Both ignore the broader issue of the strangling external debt, which
requires a yearly (and unending) debt service of $1 billion.
In April, the
governor announced that if the PR Legislature did not approve the 7 percent
sales tax, providing new revenues, the government would not be able to get an
emergency loan of $531 million to avoid shutting down as of May 1. Both
bourgeois parties have been intransigent, holding the public and government
employees hostage to the possibility of a partial government shutdown and
imposing mass layoffs and further cutbacks, supposedly due to the lack of
money.
At the end of the month, Gov. Acevedo Vilá announced that
the government was out of money and would partially shut down 45 government
departments and agencies, starting May 1. This includes the closing of schools,
affecting 560,000 students, and laying off all the personnel in the Department
of Education—more than 70,000 workers. The governor sent notices of the
mass layoff plan to all government agencies and halted all money transfers to
Puerto Rico’s 78 municipalities.
Moody’s ordered cuts in
education
It is noteworthy that in the latest evaluation of Puerto
Rico’s economy, carried out last month by Moody’s Investor Ser
vices, the Education Depart ment of Puerto Rico is singled out as a target for
cutbacks.
Among public employees and the working class generally, the
announcement by the government created shock, uncertainty and anger. The unions
who represent the 95,000 public employees to be dismissed began to mobilize
forces. The entire union movement has denounced the imposition of a sales tax
and the impending layoffs.
On April 28 the Association of Mayors, which is
tied to the PDP, bused in several thousand municipal employees from cities
throughout the island to pressure the legislature to come to an agreement with
the governor on the budget.
On the morning of April 29, a demonstration
billed as “Puerto Rico Grita” (Puerto Rico Screams), initiated by
radio show hosts Antonio Sánchez and Funky Joe, drew 40,000 marchers, who
went to the legislature demanding, again, that it and the governor come to an
agreement.
That same afternoon Servidores Públi cos (Public
Servants), which represents office workers, held a demonstration in the banking
and financial district of San Juan. The workers stopped in front of Banco
Popular and sat down in the street, demanding that the crisis be averted by
taxing the banks and corporations.
Some union leaders attempted to
dramatize the moment by entering the bank to withdraw their deposits, but police
moved in. Clashes with the police prevented the workers from
entering.
Later that afternoon, some 5,000 members of the Federation of
Teachers, the Puerto Rican Workers Union, the Association of Lunchroom Workers
and others marched to the legislature under the slogan, “Not 4 percent or
7 percent, make the rich pay.”
At the rally in front of the
legislature, Teachers Federation head Rafael Felici ano warned the government
that if the schools closed on May 1, the federation and other unions
representing the 70,000 Education Department employees would call for a general
strike. He blamed the current crisis on “big business, which is holding
the country hostage.”
From 1999 to 2005, the assets of the
commercial banks operating in Puerto Rico increased from $44 billion to $83
billion. They include Banco Bilbao Vizcaya Argentaria, Banco Popular, Banco San
tander, Bank & Trust of Puerto Rico, Citi bank, Doral Bank, Eurobank,
FirstBank, R-G Premier Bank, Scotiabank and Westernbank.
On May 1, the
government went ahead with its plans and 95,000 public employees found
themselves without jobs. The president of Puerto Rico’s Development Bank,
Alfredo Salazar, who represents the island in negotiations with Moody’s
Investor Services and Standard & Poor’s, explained to the press that
the government shutdown would be viewed as a good thing by the credit rating
houses and by bondholders on Wall Street because “they will see it as a
demonstration that the financial problems are being
confronted.”
May Day protest trashes banks
A May Day
protest, organized by the Coordinadora Sindical (Union Coordi nation), drew
4,000 in the pouring rain. The demonstration gathered at the Labor Department
and marched to the financial and banking district.
Marchers chanted in
Spanish: “The government of Puerto Rico is an instrument of the
rich,” “If 7 percent is so good, let the bankers pay it,”
“Struggle yes—Surrender no,” “We say no to the
layoffs,” and “Workers and students united and moving
forward.”
As the demonstration passed the banks, militant, hooded
young people sprayed the walls of the banks with the slogan in Spanish:
“Not 4 percent or 7 percent—Let the rich pay.”
The
police moved in to stop the youth. In the ensuing struggle, the
demonstration’s security squad, made up of men and women unionists, held
the police at bay. As crowds grew to protest the police intervention, more young
people gathered and pelted the bank windows with rocks. Several large window
structures at Scotiabank, McDonald’s and other businesses were
damaged.
According to Puerto Rico’s Develop ment Bank, last year the
island’s gross domestic product was $79 billion; of that, $30 billion went
straight into the pockets of U.S. investors. In that same year, per-capita
income was reported at $12,947.
If one adds up the profits that Wall
Street and other foreign investors have taken out of Puerto Rico in the 107
years of its domination by the U.S., it becomes clear that most of the wealth
produced by the workers of Puerto Rico has been robbed.
The current
struggle is a reflection of the fundamental contradiction of
capitalism—that while the working class collectively produces all the
wealth of society, this wealth is appropriated by a handful of private
corporations and banks. In the case of a colony like Puerto Rico, it means that
an even greater portion of what the workers produce is stolen.
Articles copyright 1995-2012 Workers World.
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