Puerto Rico:
Hit by Natural Disasters, Plundered by U.S. Capital

Sep 26, 2022

All 3.2 million people living in Puerto Rico lost electricity on Sunday, September 18, even before Hurricane Fiona made landfall—that is, before Fiona’s strongest winds hit the island. Two thirds of Puerto Ricans were also left without running water, as water pumps failed due to flooding or loss of power. Five days later, on September 23, one third of the customers on the island still had no electricity, and hundreds of thousands of people were without clean water.

For Puerto Ricans, this is a repeat of the complete disaster wrought on the island by Hurricane Maria in 2017. Back then, many Puerto Ricans had to live without electricity for several months—and some as long as 11 months! It is estimated that at least 5,000 people died from the consequences of not having power and clean water during the months after Hurricane Maria.

Five years later the same thing is happening again, even though Fiona was not as strong as Maria. But it’s not a surprise. After Hurricane Maria in 2017, mostly makeshift repairs were made to get the electric grid running again, but practically nothing was done to modernize the aging grid.

The catastrophic failure of Puerto Rico’s electric grid can be traced back many decades. But that failure is also tied directly to the island’s long history of plunder by U.S. capital.

Puerto Rico’s status as a U.S. “territory"—a euphemism for colony—has meant that U.S.-based companies were given a free hand to loot the island’s resources. Starting in the 1930s, some U.S. companies set up factories in Puerto Rico, where they paid workers much lower wages than in mainland U.S., while U.S. law allowed them to avoid paying taxes. In the 2000s, after U.S. Congress began to impose taxes on U.S.-based companies’ operations in Puerto Rico, the companies left the island, looking for new places where they did not have to pay taxes, and where wages were even lower. Unemployment skyrocketed in Puerto Rico, pushing nearly half the population below the poverty level.

But U.S. capital was not done squeezing huge profits out of Puerto Rico’s working class. U.S. banks and finance firms bought bonds issued by Puerto Rico to make money off the interest, and the government’s debt increased. By the mid-2010s, Puerto Rico was saddled with more than 70-billion-dollar debt it was unable to pay.

PREPA, the electric utility, stopped doing maintenance. The electric grid became outdated and more prone to failure, while customers had to pay more for electricity.

When Hurricane Maria hit Puerto Rico in 2017, PREPA was under a crushing, 9-billion-dollar debt and had already filed for bankruptcy. In 2021 the government hired LUMA, a joint venture of U.S. and Canadian companies—guaranteeing LUMA more than 100 million dollars a year for 15 years!

As soon as it took over the job in June 2021, LUMA began to impose regular, frequent blackouts on the island’s population, at the same time that it increased the rates customers paid. Nothing got fixed.

While natural disasters keep hitting Puerto Rico, the only question for U.S. banks and corporations is how to squeeze even more profit out of Puerto Rico’s working class.

Capitalism, as represented by Wall Street, has no plan for Puerto Rico’s continued underdevelopment other than to keep what’s already been plundered, and take more. Who collects 100 million dollars a year for not fixing a grid and not delivering power? The bosses’ money racket can only be interrupted by social revolt and revolution.