Date
October 18, 2019

The potential for civil unrest in Puerto Rico could increase in the coming months due to a controversial pension cuts proposal, a debt restructuring plan introduced by the island’s Fiscal Oversight Board (Junta de Supervision Fiscal, JSF), and acceded by Governor Wanda Vázquez. One of the most controversial elements of the plan involves an adjustment of public sector pensions. Major unions have already engaged in small-scale protest actions in the last few months. Further disruptive actions are likely to escalate in the medium term and could pose a serious security concern to travelers and business personnel operating in Puerto Rico.

 

Fragile Political Environment Threatening Security

Wanda Vázquez, the newly appointed governor of Puerto Rico, agreed to demands by the JSF to cut public sector pensions Sept. 27. Vázquez assumed the position of governor under contentious circumstances. Former Governor Ricardo Rosselló resigned from office in July under the weight of continued protests and unrest, becoming the first governor to resign since Puerto Rico became a commonwealth of the United States. Vázquez, Rosselló’s de facto successor, assumed the governorship amid continuing protests, now under the new protest banner “Wanda Renuncia” (Wanda Resign). Many activists deem Vázquez an extension of the previous administration, with similar accusations of alleged corruption and lack of transparency surrounding her political career. Vázquez’s political capital and popularity in Puerto Rico is weak, and any divisive legislative action she takes is likely to increase the potential for unrest significantly.

The JSF is also an extremely controversial entity, and to many activists, it emphasizes Puerto Rico’s alleged quasi-colonial status. The JSF is not an elected board, and it ensures many economic decisions in Puerto Rico are managed externally, allegedly removing the capacity for Puerto Rico to self-govern. In the protest actions that took hundreds of thousands of demonstrators to the streets against Rosselló, many protesters also demanded that authorities disband the JSF. For many activists, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), the act that established the JSF, has merely offered the prospect of further austerity. The widescale dissatisfaction toward the JSF, colloquially the junta, is unlikely to dissipate.

 

Pension Cuts Proposal Encouraging Unrest

As in other countries, particularly in Latin America, any policy that threatens to reform social security benefits in the vein of fiscal responsibility and austerity is likely to cause a backlash. Such backlash from a pension cuts proposal has historically manifested in mass protest action. In Brazil, for example, the administration is on the verge of passing a constitutional change on the country’s public pension system. The move has seen hundreds of thousands of Brazilians protest nationwide in 2019 alone. In Puerto Rico, while the scale of related unrest has not mirrored that of Brazil, the potential for widescale protests exists. Small protest actions have already manifested, particularly since the JSF’s Sept. 27 announcement, with further actions planned in the short term.

Around 40 percent of pensioners, equivalent to 350,000 former public workers, will be affected by the proposed changes. The plan will include cuts of up to 8.5 percent of monthly payments. Vázquez has insisted, however, that without the cutback, the risk of greater reductions in the future would be higher. The governor asserts that the cuts come with stringent rules to prevent future pension reductions, as well as the creation of a reserve fund to guarantee subsequent payments. The assurances have not quelled the anxiety of many activists, who attribute an ineffectual nature to the guarantees, given the perceived lack of authority by Puerto Rico over JSF decisions. In any future protest action, protesters will likely march upon Viejo San Juan and convene in front of the governor’s Palace, also known as La Fortaleza. Such actions have the potential to cause significant transport and business disruptions.

 

Precautions to Take if Operating in Puerto Rico

Vázquez and the general political establishment is still unsettled in the aftermath of the summer’s political crisis. Any subsequent protest action in Puerto Rico, regardless of scale, is likely to be taken seriously by officials. It is unlikely that all 350,000 affected pensioners will protest; however, several influential groups have expressed their dissatisfaction with the pension cuts proposal, including Let’s Build Another Agreement (Construyamos Otro Acuerdo), Puerto Rico Teachers’ Federation (Federación de Maestros de Puerto Rico), and Citizen Front for Debt Audit (Frente Ciudadano para la Auditoría de la Deuda), insisting that the cuts are unnecessary. The JSF’s plan still needs to be approved by the federal courts, and changes to the proposal are still possible before its implementation. Unrest, which may lead to widespread transportation and business disruptions, has the potential to escalate as protesters seek  the proposal’s annulment.

The pension reduction also has the potential to affect Puerto Rico’s overall security environment in the long term. Socioeconomic studies estimate that over 40 percent of the island’s population lives under the poverty line; the 2015 US Census Bureau registered this figure at 46.1 percent. The public pension system guarantees an income not only to former public workers but also to the families of pensioners. With a lack of economic security heightened by lower pensions, Puerto Rico could see an increase in rates of both petty and violent crime in the coming years.

If operating in Puerto Rico, personnel and visitors to the island should consider taking the following precautions to mitigate the threat of violence and disruptions exacerbated by civil unrest:

  • Stay abreast of local news or alerts to avoid planned protests
  • Avoid all protests as a standard security precaution
  • Keep in mind that government buildings, embassies, and sometimes police stations can be targets of civil unrest and as such may not be good options for safe havens
  • Exercise increased caution if visiting low-income neighborhoods, including La Perla in Viejo San Juan
  • Avoid walking alone in isolated areas and after dark
  • Consider using a local driver who is familiar with road conditions for ground travel, particularly over long distances
  • Avoid wearing flashy clothing and jewelry and displaying valuables or large sums of money in public

 

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