Memories of the survival of Hurricane Maria still haunt the people of Puerto Rico, four years after the storm wreaked havoc on U.S. territory on September 20, 2017.
There are reminders of the destruction, with thousands of homes, many of which are still covered in blue tarps, yet to be repaired. Constant power cuts are a reminder to Puerto Ricans that essential work to modernize the dilapidated power grid decimated by Maria has yet to begin. The deterioration of school buildings, roads, bridges and even health facilities indicates a slow reconstruction process that has not yet picked up its pace.
A new analysis by the Center for a New Economy, a Puerto Rico-based non-partisan think tank, argues that post-hurricane reconstruction is just one of three “system shocks” – along with the Covid-19 pandemic and the decade-long financial crisis – which challenge Puerto Rico.
On reconstruction, some of the most important work, which includes “undertaking mitigation activities to increase resilience and reduce risk exposure of vulnerable populations – has yet to begin,” according to analysis.
Hurricane Maria caused $ 90 billion in damage and Congress allocated at least $ 63 billion for disaster relief and recovery. Four years later, around 71% of these funds have not reached the communities of the island archipelago. Puerto Rico received around $ 18 billion, according to FEMA Recovery Support Function Steering Group.
According to Sergio Marxuach, CNE policy director and author of the analysis, the Oversight and Budget Management Board overseeing Puerto Rico‘s finances has said the bulk of reconstruction aid is expected to come after fiscal 2025. .
Created under the Obama administration under the Promesa Act of 2016, the Federal Tax Board is tasked with restructuring Puerto Rico’s $ 72 billion public debt after U.S. laws arbitrarily excluded US territory from the Federal Bankruptcy Code. This has resulted in severe austerity measures as Puerto Rico tries to revive its economic growth.
The precarious financial situation has become more complicated as worsening crises such as a series of destructive earthquakes in early 2020 followed by the Covid-19 pandemic have made life more difficult for the 3.2 million Puerto Ricans living on the territory.
Puerto Rico has so far made up about two-thirds of the loss of economic activity resulting from the Covid-19 pandemic. But Marxuach said it was important to remain cautious about the relatively rapid recovery, as it is largely attributed to a recent injection of federal aid linked to the pandemic.
“It is worrying that short-term economic growth depends primarily on receiving federal transfers over which we do not control,” Marxuach said in the report. “We are concerned that these expenditures may have a temporary positive impact on the economy that may delay efforts. To develop a medium / long term economic strategy or plan for Puerto Rico.”
Puerto Rico is expected to receive $ 43.5 billion in federal aid related to Covid-19 by fiscal 2023, according to the Fiscal Oversight and Management Board.
Power 4 Puerto Rico, a coalition of national organizations from the United States, is lobbying the federal government to address structural factors hampering recovery in the short and long term. They are also working to strengthen the infrastructure of the United States, reduce its debt as part of the restructuring process and increase transparency and accountability.
Coalition urges President Joe Biden and his administration to address issues he vowed to undertake during his campaign.
According to a fact sheet written by Power 4 Puerto Rico and shown in advance to NBC News, Biden has kept some campaign promises, including releasing previously blocked hurricane aid and reviving a White House task force in Puerto Rico to advance reconstruction efforts on the island. ‘Isle.
But he has yet to order a review of the federal tax council’s fiscal austerity policy, which he has pledged to do, as well as support a Puerto Rican debt audit and ensure that the recovery funds benefit local businesses.
The Federal Tax Council is promoting structural reforms for Puerto Rico in key areas such as social protection, energy and ease of doing business, “which it says will have a cumulative positive impact equal to 0.75% of GNP by fiscal year 2026 “. Marxuach said in the report.
But Marxuach points out “that it is not clear, however, whether the government of Puerto Rico has the capacity to implement these policies” and whether they will have the economic impact predicted by the board.