On Tuesday, August 4th Business Council for American Security Chairperson Dante Disparte spoke to the BBC World Business Report about the latest development in the Puerto Rican debt crisis. Puerto Rico missed a $58 million bond payment on Monday, sending the island territory into default for the first time. In his interview, Disparte mentioned several of the issues contributing to Puerto Rico’s debt troubles.
“Things are very difficult on the island,” said Disparte, who was born and raised in Puerto Rico. Disparte described that were it part of the mainland US, Puerto Rico would be an even poorer state than Mississippi. Energy costs, he explained, were one of the largest problems facing Puerto Rican residents. Energy is much more expensive in Puerto Rico than it is in other parts of the country, and the inefficient public utility PREPA (Puerto Rico Electric Power Authority) imposes severe costs on the fragile Puerto Rican economy.
As for a resolution to crisis in Puerto Rico, Disparte explained that a bailout would be the likeliest way to revive the economy and add solvency to the territorial government. He said:
“So much of the solution to the crisis in Puerto Rico sits in Washington, DC… However we got here matters less than what we do from this point forward.”
Debt relief and a bailout may be politically unpopular, but as Disparte said, neither paying the full amount of the debt nor a disorganized solution will be possible fixes to this serious problem.
Listen to the full interview here.