Fiscal row with Washington distracts Puerto Rico from storm recovery - official

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Tuesday, 24 April 2018 09:34 GMT

Houses damaged or destroyed by Hurricane Maria stand at the squatter community of Villa Hugo in Canovanas, Puerto Rico, December 11, 2017. REUTERS/Carlos Garcia Rawlins

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"We need to put all of our energy in the rebuilding," says Secretary of State Luis Rivera Marín

By Megan Rowling

CALVIA, Spain, April 24 (Thomson Reuters Foundation) - Puerto Rico, battered by Hurricane Maria in September, is working "day and night" to restore public services, but a row with Washington over a fiscal turnaround plan for the bankrupt U.S. territory is draining energy from the recovery effort, said the Caribbean island's secretary of state.

Luis Rivera Marín, Puerto Rico's second-highest official, said the territory's government would not comply with some of the cost-cutting measures announced by the federal oversight board last week, which affect public policies such as pensions.

"We are going to take care of our most vulnerable - our children, our elderly - and we will take the necessary measures so that through tourism and technology, we can return to economic growth (and) pay our debts," he said in an interview on the sidelines of the Smart Island World Congress in Mallorca.

Last year, Puerto Rico filed the biggest government bankruptcy in U.S. history, owing $71.5 billion of bonds and $50 billion in pension obligations.

The oversight plan forecasts that Puerto Rico would be able to pay back $6.7 billion through 2023.

Governor of Puerto Rico Ricardo Rosselló said in a statement on Thursday the board "usurps the powers of the democratically elected government".

Rivera Marín, a former commercial lawyer, said Puerto Rico's government agreed with about 80 percent of the plan, but would disregard the rest.

"It distracts us; we need to put all of our energy in the rebuilding," he told the Thomson Reuters Foundation ahead of the start of the hurricane season in June.

"We are working day and night to make sure the last home on the island gets its power back, all schools are reopened, hospitals provide proper health services - that's our focus."

Some 40,000 customers have been without power since Hurricane Maria took out the island's electricity supply.

Restoring electricity in Puerto Rico - which suffered its latest blackout last week when a transmission line failure cut power to almost all 3.4 million residents - has been a major challenge.

DITCHING DIESEL

Rivera Marín said the Puerto Rico government was working on ways to avoid the same thing happening in future storms.

It has changed the law, for example, to allow individuals, businesses and cooperatives to set up micro-grids that can operate independently of the main power grid if needed.

People can now store and use solar power they produce from panels installed at home, he said.

Puerto Rico aims to source 25 percent of its energy from clean sources - mainly solar and wind - by 2025, up from 5 percent now, Rivera Marín said. It currently relies on imported diesel for 75 percent of its needs, which is costly and polluting.

"We want to get rid of diesel altogether," Rivera Marín said, noting the aim is to bring the cost per kilowatt hour of electricity down from $0.24 to less than $0.20 by 2020. "It would help hotels, the fiscal position, family budgets - everyone," he said.

Another measure to deal better with disasters is to improve data collection on everything from logistics to hospitals and generator sizes, in partnership with businesses and using blockchain and cloud storage, he added.

Puerto Rico also wants to turn the destruction wrought by the hurricane into an opportunity to build better housing for its people, Rivera Marín said.

More than 472,000 homes were damaged or destroyed by the storm, many of them wooden shacks with tin roofs.

Puerto Rico - where 40 percent live below the U.S. poverty line - has asked Washington for money to build "dignified housing" that can better withstand storms, Rivera Marín said.

So far $20 billion in assistance has been granted by the U.S. Department of Housing and Urban Development for long-term disaster recovery in Puerto Rico, including housing.

BRAIN DRAIN

The island's economy relies heavily on manufacturing for the pharmaceuticals industry, which was disrupted by the hurricane.

After the storm, tens of thousands of Puerto Ricans left for the U.S. mainland, and some have yet to return. But that process of "relocation" had already spiked before the disaster, because of bad economic conditions, Rivera Marín said.

"There has been a brain drain," he said.

The island's government is "stopping the bleeding" through policies such as lower tax rates for doctors, he added.

"Now we are working on prosperity, on making Puerto Rico safe - making a place where your children can get a good education, where you can find a good job or build a small business for yourself," said Rivera Marín.

(Reporting by Megan Rowling @meganrowling; editing by Alex Whiting. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women's rights, trafficking and property rights. Visit http://news.trust.org/climate)

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