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Puerto Rican Students Take on Wall Street Vultures

This week, students at the University of Puerto Rico located in the metropolitan area of Río Piedras declared a strike which has effectively closed down the main campus of the island’s public university system.  The students are protesting a plan to cut $450 million in funding to the university system which was demanded by a seven-person Fiscal Control Board imposed under the Obama administration and agreed to by the current colonial administration of Ricardo Rosselló.  The planned cuts represented about a third of the public university system’s total budget and would directly affect academic programming, tuition costs and staffing.

Along with these severe cuts to the most important post secondary institution in the country, the Fiscal Control Board has also imposed a series of austerity measures that significantly reduce spending on healthcare, K-12 education and affordable housing programs, impose wage freezes and layoffs on public sector workers, promote the privatization of public entities and increase consumption and property taxes.  The current administration recently had to submit a Fiscal Plan to the unelected board for approval and is now required to give regular accounts on the fiscal impact of all new legislation.

The pretext for this combination of cuts to social spending, attacks on labor and increased tax burdens is the $70 billion debt that the colonial government has incurred over several decades.  While there is much evidence suggesting that large portions of this debt was incurred illegally, the current administration has vowed to repay despite the disastrous social consequences of the austerity measures being imposed.

It is estimated that between 50 and 60 percent of the current debt is held by hedge funds.  This is not a new story as a deteriorating economic situation which began over a decade ago led to increased debt emissions by colonial authorities both in the form of general obligation bonds as well as other bonds tied to recurring revenue streams like a 11.5% VAT tax on consumer goods and surcharges on bills for public entities such as the Puerto Rico Electric Power Authority (PREPA).  The inevitable degradation of the island’s credit rating led to a fire sale of Puerto Rico bonds, long prized for their triple tax exempt status, and the entry of the same cast of vulture funds made infamous in places like Argentina, Greece and Detroit.

The students at the University of Puerto Rico have taken a bold step by resisting not only the colonial governments efforts to satisfy the demands of the bondholders through savage social cuts, but also by proposing a united front with the two main labor unions that represent workers within the University.  The Hermandad de Empleados Exentos No Docentes (HEEND), the union representing maintenance workers on campus, as well as the Association of Puerto Rican University Professors (APPU), have both lent support to the striking students by agreeing not to cross the picket lines.  This has come about despite a provocative order given by the interim President for all personnel to return to work.  Indeed, support for the striking students is widespread as the UPR is considered a point of pride by many Puerto Ricans.  In addition to opposing the planned cuts, the student leadership is demanding reforms to bring greater democratization to decision-making within the university as well as a public audit of the current debt in Puerto Rico to determine what portions could be cancelled on the basis of illegal bond emissions.

The current strike is taking place just 7 years after a series of similar student strikes led to a shut down of the majority of UPR campuses for several months.  Just as now, the major issues that led to the students taking radical action were tuition hikes combined with an intensification of the attacks carried out against social programs and labor by the colonial administration.  Yet, the imposition of a Fiscal Control Board on Puerto Rico since 2016, which clearly represents the interests of Wall Street, has shifted the focus of the students from the colonial administration to the financial vultures themselves.  While it is by no means assured that the current strike will result in a tangible victory for the university students, their direct challenge to the Wall Street has both raised consciousness among the rest of Puerto Rican society and merits respect beyond the colony.  Communities ravaged by municipal debt will do well to draw lessons from the struggle currently being led by Puerto Rican university students as their bold step offers the potential for new organizational models of popular resistance to the reactionary social policies being advanced by Wall Street vultures.

More articles by:

Carlos Borrero is a New York-based writer.

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