Puerto Rico voters overwhelmingly approved a nonbinding referendum calling for the commonwealth to begin the process of applying for admission as a full state.
On June 11, 97 percent of participating Puerto Rico residents voted to begin the statehood application process. The remaining 3 percent were split between retaining the territory’s current status and requesting independence.
On July 3, territorial Gov. Ricardo Rossello, a member of the New Progressive Party, began selecting individuals to send to Congress as unofficial representatives.
The statehood process requires congressional legislation, approval of a state constitution, and the fulfillment of any other requirements set by Congress.
Unleashing Economic Potential
Statehood is key to unlocking the territory’s full economic potential, says José Rodríguez Suárez of the New Progressive Party, a former Puerto Rico Deputy Secretary of State and cofounder of Puerto Rico Statehood Students Association, a nonprofit organization promoting statehood for the territory.
“It is essential that Puerto Rico continues to carry out the structural reforms that are required for a fiscally responsible state government,” Suárez said. “However, that would be only the beginning of the path towards long-term prosperity. For Puerto Rico to get the full benefit of those reforms and achieve convergence with the U.S. national economy, it would ultimately be necessary for the island to be admitted into the union.”
New Deal Obstacles
U.S. government policies instituted in the 1930s and 1940s by President Franklin Delano Roosevelt have contributed to the territory’s financial troubles, Suárez said, which statehood would have prevented.
“Puerto Rico’s government-owned utilities are the legacy of Washington’s intervention in the island’s economy while FDR was president,” Suárez said. “That intervention would not have been possible without the island’s unincorporated territory status. Statehood, by contrast, would bring about economic freedom on a par with the rest of the nation. Therefore, statehood would encourage private-sector investment which would facilitate the privatization of the utilities.”
Policy Changes Wanted
Luis Fortuño, the commonwealth’s governor from 2009 until 2013, says territory status holds back progress in Puerto Rico.
“The economies of territories tend to underperform the economy at the national level, and Puerto Rico is no exception,” Fortuño said. “I think the island would probably want to prove that it can indeed act responsibly and perform economically. I would say that that’s the challenge of the new administration.”
The same policies that promote prosperity in the United States would succeed in Puerto Rico, Fortuño says.
“If you look at the past decade, the only period of time when the economy was in positive territory was right after we had slashed expenses by $2 billion and lowered corporate and individual taxes,” Fortuño said. “The government budget was coming down every year in 2011 and 2012 while this was happening.”
“The thought that you need increased government spending to get the economy moving is obsolete,” Fortuño said.
Help Me Help You
Guiding Puerto Rico along the path to prosperity would also benefit the mainland, says Joseph Milligan, executive vice president of Fundación Libertad.
“Puerto Rico is a gem,” Milligan said. “Its challenges catch the front pages these days when you look at it from a financial perspective, but so do Detroit and the state of Illinois. From a geographical perspective and from a cultural perspective, Puerto Rico is the bridge to Latin America, and there’s a lot of benefit in that to the United States.”
