Puerto Rico, this year’s Place of the Year, has been in the media spotlight in the last year for several reasons. First, the island is undergoing its most severe and prolonged economic recession since the Great Depression in the 1930s. Between 2006 and 2016, Puerto Rico’s economy shrank by nearly 16 percent, and its public debt reached more than 73 billion dollars in 2017. Second, the island is experiencing a substantial population loss, largely due to emigration.
Acquired by the United States from Spain in 1898, Puerto Rico has a peculiar status among Latin American and Caribbean countries. In the excerpt below, author Jorge Duany provides the necessary background for understanding the inner workings of the Commonwealth government and the island’s relationship to the United States. How did Puerto Rico become a US Commonwealth?
The US territory of Puerto Rico is currently experiencing its most severe and prolonged economic downturn since the Great Depression (1929–33). Between 2006 and 2016, the island’s economy (measured as Gross National Product in constant 1954 prices) shrank by 15.2%, while total employment fell by 28.6%. The elimination of federal tax exemptions under Section 936 of the Internal Revenue Code in 2006 dealt a serious blow to the island’s manufacturing industry.