Large-scale protests are expected in the Puerto Rican capital of San Juan this Wednesday as creditors and local retiree groups meet in court for the first time. The US territory is woefully indebted and owes some $74 billion.
Facing pending lawsuits from its creditors, Puerto Rican authorities have sought the assistance from a federal oversight board known as PROMESA to protect it from legal action and help it restructure its debt. While Wednesday’s hearing will deal with routine legal matters, it could also lay the groundwork for a broader legal fight.
If the proceedings spark a declaration of bankruptcy, it could lead to the reduction of government services such as health and education programs. More worryingly, the territory would have to make deep cuts to the $49 billion in pensions owed by the Puerto Rican government to workers.
Given the extreme reliance on these social services by Puerto Ricans, 45% of whom live in poverty, their suspension will cause substantial social unrest.
Max is Foreign Brief's Chief Executive Officer. A Latin America specialist, Max is an expert in regional political and economic trends, focusing particularly on the Southern Cone.