Puerto Rico

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Puerto Rico has decided not to become a US state, yet. Now it wants greater economic independence

Puerto Rico is largely mountainous. The Central Cordillera range extends east–west along most of the length of the island, descending steeply to the narrow southern coastal plain, and more gently to the broader plains of the northern coast. There is also a north–south distinction in climate: humid and tropical in the north; drier in the south.

The population is racially fairly homogenous, and there is little overt discrimination though, as elsewhere in Latin America, the people in positions of power tend to be those with lighter skin colour. Puerto Ricans are US citizens, but their standard of living is far lower than that in the USA: the per capita income is around half that of the poorest US state, Mississippi; the unemployment rate is usually far higher than in the USA; and half the population live below the US poverty line. Not surprisingly, many people driven by poverty and unemployment have headed for the USA, which now has around 3.4 million people of Puerto Rican descent, most of whom are in New York.

Almost everyone speaks Spanish, which is the main language of instruction in schools. English is also an official language, but far fewer speak it fluently and many people want to resist any further imposition.

Puerto Rico's main economic activity is manufacturing, which accounts for more than 40% of GDP. Many US firms have been attracted to Puerto Rico by low wages. Although Puerto Rico is subject to US minimum wage legislation, wages tend to be one-quarter less than in the USA. In the past there have also been significant tax concessions. These are now being phased out though local politicians are lobbying for them to be retained.

Initially this drew in firms engaged in labour-intensive industries like garments manufacture. But in recent decades companies have invested in higher levels of technology—around half of current manufacturing is in chemicals, and another quarter is in metal products and machinery. Most of this output is for export, primarily to the USA.

Though some garment production remains, and employs around 30,000 people, many labour-intensive industries, faced with increases in the US minimum wage, have migrated in search of cheaper labour elsewhere—especially when the North American Free-Trade Agreement heightened competition from Mexico.

Little is left of Puerto Rican agriculture, which now contributes less than 1% of GDP.

Another important source of employment and income is tourism. San Juan, the capital, is a favourite port of call for cruise liners. Around 1.3 million cruise visitors disembark each year along with four million stopover tourists, primarily from the USA.

Puerto Rico's strange status

The USA acquired Puerto Rico in 1899 at the end of the Spanish American War. Since then, its status has remained unresolved. The US Supreme Court has asserted that Puerto Rico is an ‘unincorporated territory of the United States’—a possession of, but not a part of, the USA. A new constitution in 1952 established a system for local government, making Puerto Rico a ‘Commonwealth’.


Subjects: United States History.

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