Evizda

Hedge fund managers and bondholders are pressing the government of Puerto Rico to drive through a series of punishing austerity measures, including dramatic cuts to public education and workers’ rights protections, to “solve” the crisis of debt and poverty gripping the Caribbean island.

A group representing $5.2 billion of debt held by 38 investment managers paid three former economists for the International Monetary Fund, who now are employed by the firm Centennial Group International, to devise policy recommendations in response to Governor Alejandro García Padilla’s claim last month that Puerto Rico’s $72 billion debt is “not payable.”

Entitled For Puerto Rico, There is a Better Way, the report urges the government to increase tax collection and then use this money to pay back creditors while at the same time severely slashing public programs—particularly education—and privatizing assets and industries. Needless to say, the billionaire bondholders who commissioned the study have a direct financial interest in its findings.

Specifically, the report’s authors call for the government to slash public education and health programs, including proposals to: “Reduce number of teachers to fit the size of the student population; Reduce subsidy to University of Puerto Rico; Cut excess Medicaid benefits.”

The recommendations come despite the fact that Puerto Rico’s government has already been rapidly defunding the education system, closing 100 schools in 2015 alone. Puerto Rico’s teachers’ unions have vigorously opposed attempts to drive through neoliberal education reforms and cuts, and in May, thousands of educators and students took to the streets and staged strikes to protest a proposed $166 million cut to the University of Puerto Rico’s budget.

The study also recommends “structural reforms” to regulations and worker protections, including calls to: “Amend local labor laws regarding overtime, vacation time, mandatory bonuses, and others;” and changes that would “[m]ake welfare benefits consistent with local labor market conditions.”