Disaster capitalism rages in Puerto Rico

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VOL. 35, NO. 11, NOVEMBER 2017 WWW.SOCIALISTACTION.ORG U.S. $1 / CANADA $2 “The only thing we need now is a hurricane.” These were the words of a financial advisor in Puerto Rico this summer, anticipating the business opportunities the devastation of a hurricane would produce.

This framework—which understands disaster as an opportunity for profit—is not unusual. As Naomi Klein showed in her famous book, “The Shock Doc­ trine,” capitalism exploits both natural and manmade disasters as a chance to tear down social reforms, privatize public services, and implement neoliberal economic policies.

From the Pinochet dictatorship in Chile to postKatrina New Orleans, we have seen the program and tactics of disaster capitalism persist and expand. To­ day, we can see the same forces seeking to bring di­ saster capitalism to Puerto Rico in the aftermath of Hurricanes Irma and Maria.

The most immediate disaster capitalist propos­ als for privatization came after Hurricane Irma. The storm did not hit Puerto Rico directly, but knocked out power to more than a million people. The ex­ ecutive leadership of the Puerto Rico Electric Power Authority, PREPA, warned that the island might face power outages for six months or more. This immedi­ ately prompted calls for the privatization of PREPA on the grounds that it was inefficient and incompe­ tent. In fact, PREPA was able to restore power for most of its customers within a few weeks.

PREPA’s current executive leadership was installed through an agreement with its creditors after the previous, anti-privatization administration was oust­ ed. Four of the board’s seven members had signed a letter in June calling for PREPA’s privatization. The Electrical Industry and Irrigation Workers Union, which represents PREPA’s workers, accused the lead­ ership of exaggerating its estimates and delaying the deployment of available workers to promote the prospects of privatization.

Hurricane Maria, with a far more devastating im­ pact on Puerto Rico, has likewise intensified the di­ saster capitalist pressure. The calls for PREPA’s priva­ tization have intensified. They have also been joined by the likes of Elon Musk, the CEO of Tesla, who has attempted to put a green veneer on this push by pro­ posing to build a renewable grid in Puerto Rico—but on a privatized basis.

One of the key objectives of advocates of PREPA privatization is the breaking of the electrical work­ ers’ union. Musk has a history of opposing union drives at Tesla and elsewhere. The fiscal control board installed in Puerto Rico by Washington has in­ voked a legal provision that would allow it to approve public-private partnerships with almost no public or environmental review.

Ricardo Arduengo / AFP / Getty Images (Above) A street in Arecibo, Puerto Rico, after the Arecibo River overflowed in the aftermath of Hurricane Maria.

Of course, Hurricanes Irma and Maria were not the start of austerity and privatization programs in Puerto Rico. Even before the hurricanes, Puerto Rico faced a debt of $74 billion—more than 70% of its GDP—as well as nearly $50 billion in unfunded pen­ sion liabilities. In 2016, the U.S. Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA. PROMESA established a fiscal control board with broad authority over Puerto Rican finances and over its elected government.

The main causes of this debt crisis include massive tax breaks for corporations and wealthy individu­ als in Puerto Rico. Restrictions on the Puerto Rican government and economy due to its status as a U.S. colony have also contributed. This includes the Jones Act, which restricts non-U.S.-flagged ships’ ability to ship goods to Puerto Rico but also extends beyond it: when Puerto Rico attempted to raise taxes on large corporations that imported goods, Walmart success­ fully sued to block the tax in a U.S. federal court on the basis of federal law.

Nonetheless, the austerity program in Puerto Rico (continued on page 5, in “Drexel professor suspended following right-wing attack”)

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