The dark prognosis of Puerto Rico: the island may never recover

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One year after Hurricane Maria in Puerto Rico, leaving some 2,975 dead and topple the economy, it is becoming increasingly clear that the US territory may never fully recover from the storm.

Puerto Rico was already insolvent before the storm of 2017, with creditors and the island government in the midst of negotiations on how to revive the economy or strip it to pay back $ 70 billion to bondholders. And the island government still owes $ 50 billion to cover current and future pensions. Even before Maria, half a million people had left Puerto Rico and her economy had been steadily declining since 2005. After the hurricane, there is still less work to be done.

While electricity and water have finally been restored to more than 99% of the 3.2 million remaining inhabitants of the island, the economy is moribund. Economic output is expected to drop by 13.3% this year, manufacturing jobs are drying up, tax revenues are falling, small businesses are stalling, and the reconstruction boom following a series of natural disasters is being held back by the sluggishness of the economy. Federal aid and the fact that most Puerto Ricans had little savings or insurance before the storm. Only 15% had home insurance and only 1 in 3 residents had a bank account.

"I'm not extremely optimistic," says Brad Setser, an economist at the Council on Foreign Relations in New York, who has written extensively about Puerto Rico. The challenge for the island is whether it can take advantage of the expected growth of $ 9 billion in 2018 and 2019. "While Puerto Rico has not experienced strong growth in fiscal 2019, it does not will never do it, "said Seters.

Puerto Rican Governor Ricardo Rosselló accuses what he calls the island colony status of the united states. He wrote to President Trump this week urging the United States to make Puerto Rico the 51st state. "The biggest obstacle to the complete and prosperous recovery of Puerto Rico: the inequities that Puerto Rico faces as the oldest and most populous settlement in the world," Rosselló wrote.

The granting of statehood, however, would be a multi-year process with considerable political difficulties. Meanwhile, the economy of Puerto Rico is losing steam.

How difficult is life in Puerto Rico? A budget plan released by the Puerto Rico Financial and Management Oversight Council in June outlines many of the challenges ahead. Here are the numbers:

• Hurricane Maria caused about $ 80 billion worth of damage.

• 45,000 homes are still waiting for government help to repair their roofs.

• More than 40 percent of the population lives below the poverty line, according to the agency that oversees Puerto Rico's finances.

• More than 40% of Puerto Ricans depend on Medicaid for health care.

• Some 200,000 people have left Puerto Rico since the storm.

• Another 10 percent of the population is expected to leave in the next five years to seek a better life elsewhere.

• The island owes more than $ 70 billion to creditors of a recession that began years before Maria.

• The government pension fund is running out of $ 50 billion.

• 8,000 small businesses, about 10% of the total, remain closed after Maria.

• The tax incentives that helped make Puerto Rico a low-cost manufacturing center expired in 2006, cutting manufacturing jobs by 35 percent.

• According to the island's tourism authority, the number of tourists visiting Puerto Rico dropped by 52% during the main winter months, compared to the year before Hurricane Maria.

• According to a New York Times analysis, the median FEMA subsidy granted to Puerto Rican landlords after Maria was $ 1,800, compared with $ 9,127 for those affected by Hurricane Harvey in Texas. Many who asked for help were refused, often because they were unable to prove that they owned their home.

• About 245 of the 1,100 public schools on the island have been closed. Some were damaged or demolished by the storm, but many others were closed because teachers and students fled the island. About 42,000 schoolchildren leave Puerto Rico while their families seek a better life elsewhere.