On September 27, Puerto Rico’s federally imposed Fiscal Oversight and Management Board (FOMB) announced a debt restructuring plan that would reduce the island-territory’s $129 billion debt ($72 billion in bonds and $57 billion in pension obligations) by 33% and provide a path out of bankruptcy.
“After more than a decade of economic decline and fiscal disarray, after tens of thousands of Puerto Ricans left their island to find prosperity elsewhere, we have now reached a turning point,” said FOMB chairman José Carrión upon filing the plan.
While this may seem like a welcome relief to an island still recovering from Hurricane Maria, it just spells more trouble for Puerto Rico by requiring more austerity to maintain payments, while ignoring policies that would promote economic sustainability.
