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The Star-Ledger Newark, NJ

The Statehood Debate Continues: Diverted By The Great Debate - Should Island Join Union Or Flee? Observers Say Neither Is An Economic Cure-All


October 29, 2002
Copyright © 2002 The Star-Ledger Newark, NJ. All rights reserved. 

Guanica - At the water's edge in this coastal town, where blood-red mimosas meet the blue Caribbean, a crudely engraved stone marks the spot where U.S. troops splashed ashore during the Spanish-American War of 1898.

It is the kind of place where tourists stop, guidebooks in hand, to stare out at the harbor and contemplate the long and tumultuous ties between this island and the American mainland.

It is also the place Chony Bonilla parks his taxi each morning to wait for increasingly infrequent fares - a consequence, he believes, of the endless debate over Puerto Rico 's status , more than a century after Spain ceded the island to the United States as a spoil of war.

"That's all the politicians talk about: Should we be independent, should we be a state, or should we be a commonwealth?" Bonilla says. "They never talk about the really important things, like what to do about the economy, or whether people have jobs."

Bonilla, who earned a degree in electronics but could not find work in this area's few remaining factories, has been driving a taxi for two years now. Business has been spotty, and he has fallen $1,000 behind on payments for his Chevy Lumina, with its cloth upholstery and Scooby Doo floor mats.

"A lot of people have no work here," he says. "Pretty soon I might not, either."

Bonilla's frustrations are shared by many on this island of 3.8 million people, 50 years after Puerto Rico became a U.S. commonwealth. Buffeted by plant closings and the flight of overseas capital, residents are increasingly concerned, many desperately so, about where jobs will come from in the future.

More than 28,000 manufacturing jobs have left the island since Congress began phasing out tax incentives for outside investors in 1996, and 48 percent of Puerto Ricans live below the federal poverty line. In places like Guanica, where a Hanes factory closed recently, the situation is even worse.

But when islanders turn to elected officials in San Juan for solutions, what they often get instead is another partisan re-enactment of the battle over the island's political identity.

" Status ideology has had disastrous consequences on economic development," says A.W. Maldonado, author of a book on Puerto Rico 's economic history and a former newspaper editor here. "But the politicians continue their deadly dance, and the people watch."

At issue in the political debate are the many inconsistencies and eccentricities of Puerto Rico 's marriage with the U.S. mainland.

It is a complicated relationship. Tens of thousands of residents have died fighting in the U.S. miliAAtary, but Puerto Ricans cannot vote in presidential elections. Residents pay no federal income tax, but the unemployed are eligible for welfare benefits and food stamps. Puerto Ricans are American citizens, but the island does not have a voting member in Congress.

Most of the $13 billion that Puerto Rico receives each year from Washington comes from entitlement programs, including Social Security. Funds for roads, education and other public spending, however, are capped well below similar programs on the mainland.

During the Cold War, resentment over this set of conditions fueled a radical anti-American fringe. Throughout the 1970s and 1980s, a pro-independence group known by the Spanish acronym FALN waged a bombing campaign in the United States that killed at least six people.

Today the political landscape has settled into three fairly conventional camps, embodied by the island's leading political parties.

The faction currently in power is the Popular Democratic Party, led by Gov. Sila M. Calderon, who was elected two years ago. The PDP wants to maintain the commonwealth arrangement with the United States while seeking as much power as possible within the relationship.

The major opposition force is the New Progressive Party, which wants to make Puerto Rico the 51st state. The NPP controlled the governor's office during much of the 1990s but has suffered from a series of corruption scandals and general disarray.

The Puerto Rico Independence Party, representing a small but vocal minority, rounds out the island's mainstream political scene.

The difference in power between statehood proponents and the pro-commonwealth camp has long been close. But in three referendums on the island's political status - in 1967, 1993 and 1998 - Puerto Ricans rejected the statehood option.

In the 1998 referendum , which was nonbinding, statehood received 46.5 percent of the vote, while independence received 2.5 percent and the "none of the above" option supported by pro-commonwealth forces drew 50.2 percent.

Despite public support for maintaining the commonwealth arrangement, debate over the island's status still colors nearly every discussion about economic development in Puerto Rico .

"The constant battle over political options is academic and silly, and not connected to reality," says Juan Manuel Garcia-Passalacqua, a political analyst and former adviser to the Carter White House. "Today's global economy demands that we stop, but we can't seem to figure that out."

The trouble, according to Garcia-Passalacqua, is that the island's political leaders find it impossible to separate the status issue and economic planning.

Calderon, for instance, argues it is "crystal clear" that maintaining the commonwealth relationship with the United States, subject to some modifications, is crucial for Puerto Rico 's future.

"The economic benefits of our common market and common currency are obvious," she says. "The fact that we have our own fiscal authority, and that we can create certain incentives for investment that states can't - these things have worked for us."

For Calderon and her supporters, the answer to Puerto Rico 's current economic funk lies in persuading Congress to approve new tax incentives for outside investors and to relax restrictions on maritime trade. She also has launched a $1 billion anti-poverty program and has tried to encourage more local entrepreneurship.

"The status debate does get in the way," Calderon concedes, noting that she has tried, with little success, to establish a Unity and Consensus commission to resolve the issue. But she adds, "Commonwealth is a unique answer to a unique relationship, and you cannot argue with results."

Kenneth McClintock begs to differ. As the minority leader of Puerto Rico 's Senate and a member of the New Progressive Party, he argues that statehood is the only long-term solution for Puerto Rico 's ills. Among other things, he says, statehood will inspire greater confidence among potential investors, leading to a boom in development.

"If you look at the economic development of Hawaii and compare it to Puerto Rico , it is clear that the reason Hawaii has enjoyed more progress is because it became a state and we did not," McClintock says. "The truth is that our political status has not changed since 1898; we were a colony then, and we are a colony now."

For the island's independentis tas, McClintock is right to criticize the current relationship between Puerto Rico and the United States and to describe it as "colonial." But he is wrong, they say, to believe the solution is a closer alliance.

Manuel Rodriguez Orellana, a retired Northeastern University Law School professor who serves as director of North American affairs for the Puerto Rico Independence Party, says the commonwealth arrangement limits the island's ability to strike favorable trade deals, putting it at a competitive disadvantage with similar economies such as Singapore and Ireland.

Political sovereignty "is the only way out," he says. "If we do not change the economic tools that are available to us, Puerto Rico is going to fall behind other countries in the Caribbean. Economic growth in the Dominican Republic has been twice that of Puerto Rico in recent years."

The lack of popular support for independence, Orellana believes, stems from a Cold War mentality that linked the independence movement to communism.

"The idea of independence became part of an intellectual apparatus that said the Communists would take you over," he says. "But there are no more Communists today, and more Puerto Ricans understand that we are a distinct society that deserves independence."

As evidence of this, Orellana points to a newspaper poll conducted in May, in which 60 percent of respondents identified Puerto Rico as their "nation." Twenty percent said the United States was their nation, while 17 percent said both.

Part of why Puerto Rico 's political status has remained an issue for so long is that the U.S. Congress has refused to approve a binding vote to determine the island's future. The House of Representatives passed a bill in 1998 that would have set the terms of a final status referendum , but the matter never got further.

"In some ways, this explains the public support for continuing the status quo," says Felix V. Matos Rodriguez, director of the Centro de Estudios Puertorriquenos at Hunter College in New York. "If Congress is not going to commit itself to honor the results of a referendum , why should people take the idea of change seriously?"

In the meantime, the island's economy has stagnated, slowing to a growth rate of just 2.2 percent in the 2000-01 fiscal year, according to figures compiled by the Calderon administration.

Despite Calderon's efforts to draw up an economic development plan geared toward 2025, many business executives and economists fear that it will be too little, too late - and they blame the problem in part on the endless back-and-forth of status politics.

As an example, they cite the efforts by Puerto Rico 's last pro- statehood governor, Pedro J. Rossello, to end the federal tax breaks that attracted outside investors to the island for more than 20 years.

"Rossello saw the tax breaks as a symbol that Puerto Rico was different, and he wanted the island to be treated like any of the 50 states," Maldonado says. "Never mind that those tax policies were probably responsible for a lot of jobs."

Jose Villamil, who heads Puerto Rico 's largest economic consulting firm, says that once questions about economic development become politicized, "there is no room for rational analysis. Everything becomes impossible." The irony, he says, "is that there is nothing we need to do that we cannot do under the present circumstances."

This failure to move ahead frustrates many island residents, who care much more about the economy and jobs than they do about whether they pay income tax to the federal Treasury or the state government in San Juan.

Miriam Molina, who lives in a former squatters' colony known as Punta Diamante in the southern city of Ponce, says government inaction has made it almost impossible to find good work these days. She works part time in a cafeteria, making $4.50 an hour.

"With the politicians, it's a lot of talk - blah, blah, blah, and then nothing," she says. "We're being treated like animals instead of like human beings. They think we are so stupid that we can't understand what they're doing."

Molina's husband, Enrique Soto Santiago, has made several forays to southern New Jersey over the last 24 years to find work harvesting peppers, tomatoes and lettuce, and he is considering doing it again next year. His seasonal employment as a construction worker in Puerto Rico has been inconsistent lately, and he is worried.

"I would rather stay here and do construction work," he says. "I'm 54 now, and this work is better for me. But if things don't turn around pretty soon, I'll be headed back to the fields."

Chony Bonilla faces equally bleak prospects. After two years of driving a taxi in Guanica, he is only weeks away from having his car repossessed -a setback that would leave him exactly where he was a few years ago when he graduated from Ponce College with a degree in electronics: jobless.

"I spent four years trying to find work with microprocessors and digital electronics, but there was nothing," he says. "Driving a taxi was a last resort, and now it looks like this might not work out, either."

Bonilla, who suffers from a severe case of rheumatoid arthritis, should not be working at all right now. He had a complete hip replacement only weeks ago, and the doctors prescribed an extended period of bed rest.

But without driving, there is no chance he can make his car payments. So each morning, Bonilla parks his well-polished Chevy along Guanica's waterfront and stares at the stone that bears the 19th-century mark of the U.S. military.

"If only the politicians could focus on the real problems here," he says with a sigh, as pelicans sweep across Guanica Bay. "Then maybe we have a chance."

Last Of Three Parts

Two Weeks Ago: A Commonwealth Wonders If The Wealth Will Ever Return

Last Week: Puerto Rico And New Jersey: Chasing Jobs In Jersey, With Hearts Left Behind

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