Puerto Ricans Fear Troubled Economy Will Inflict Real Pain

Puerto Ricans Fear Troubled Economy Will Inflict Real Pain

6:08pm Jul 02, 2015

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Transcript

RENEE MONTAGNE, HOST:

Puerto Rico appears to have narrowly avoided default, making a key last-minute deal yesterday and paying hundreds of millions of dollars to creditors. With a stagnant economy, more than $72 billion in debt and little cash, the U.S. territory remains in deep trouble. But on the streets of San Juan, NPR's Greg Allen reports, the signs of a crisis can be hard to see.

GREG ALLEN, BYLINE: At La Fortaleza, the historic governor's mansion in Old San Juan, officials shuttled in and out of meetings yesterday as they worked to stave off default.

(SOUNDBITE OF TRAFFIC)

ALLEN: But in Santurce, a business district just a few miles away, retired college professor Norma Perez Quiles said it was just another day.

NORMA PEREZ QUILES: Everything is like normal because we haven't had the impact in terms of the bank closing or supermarkets without food.

ALLEN: In a televised address this week, Puerto Rico governor Alejandro Garcia Padilla said the island's debt is unpayable. For years, a succession of administrations financed budget deficits by taking out loans from Wall Street. On Monday, Garcia said, he was convening a working group that will try to negotiate easier repayment terms with lenders. The governor also said each of the 3.6 million Puerto Ricans would be called on to make sacrifices. Perez found that unsettling.

QUILES: In my case, I'm just, like, worried, yes, because maybe my pension will be affected. Until now, my pension hasn't been affected. But I'm more cautious when I go to buy groceries now.

ALLEN: Libros AC is a combined coffeehouse and bookstore in San Juan. Owner Samuel Medina says he didn't hear anything new in the governor's speech Monday. What surprised him most was how the governor looked.

JEAN MEDINA: He looked really perturbed. He was about to basically, like, cry. You could see it in his eyes.

ALLEN: Medina is something that's a little unusual right now in Puerto Rico. He's 29 years old, a young professional who decided to start a business on the island. Many of his friends, he says, have left Puerto Rico.

MEDINA: Dentists, lawyers, friends who have studied real estate, they've gone - engineers. Basically half of them have gone state-side looking for better pay, a better style of life.

ALLEN: Medina is concerned about a new 4 percent hike in the sales tax and possible future increases. But he's an optimist. His business is doing well, and in crisis, he says, there can be opportunity. Lourdes Miranda also tuned in to watch the governor.

LOURDES MIRANDA: I was really disappointed.

ALLEN: Miranda says despite the financial crisis, her business has also been doing well. She's a property manager and has been seeing new clients as more condominiums go up here. But she's disappointed in the island's leaders. She says for years, they hid from the public the shell game they were playing with Puerto Rico's debt.

MIRANDA: We have been in this financial situation for almost 12 years. It's getting worse and worse and worse, and none of the past governors have done anything.

ALLEN: One thing Governor Garcia made clear this week is that Puerto Rico can't solve this financial crisis on its own. He's looking for help from lenders or perhaps Washington, D.C. Luis Negron is an author and regular at the coffee shop. He says in his view, it's a reminder that after more than a century, Puerto Rico remains a U.S. colony.

LUIS NEGRON: And we have, like, no power. And, you know, Washington right now, from here in San Juan, looks far away.

ALLEN: Puerto Rico's government made all of its scheduled debt payments yesterday. But many here fear the real pain for island residents still lies ahead. Greg Allen, NPR News, San Juan, Puerto Rico. Transcript provided by NPR, Copyright NPR.

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