Behind Puerto Rico’s Debt, Corporations That Drain Profits from the Island

Source: César J. Ayala, Monthly Review, August 18, 2015

Beginning in the 1970s, Puerto Rico’s economy began to suffer a drain of profits, to the point where the measure of total income produced in the island, the Gross Domestic Product, began to separate dramatically from the measure of income that residents own, the Gross National Product or GNP. This divergence owes itself to the extraordinary volume of profits that leave Puerto Rico into the hands of the foreign investors that control its economy. A third of the income that is generated in Puerto Rico leaves the country each year in the form of repatriated profits. In other words, the gross National Product of Puerto Rico, or the income that belongs to the residents of the island, is 67% of the total income generated there; the other third is taken away by U.S. corporations. …. To put this drain in perspective, repatriated profits in the last decade alone are enough to pay the entire debt of Puerto Rico’s government and its public corporations four times over! …..