While most people have been focusing on the crisis unfolding in Greece, attention has not been turned to somewhere closer to home in the US territory of Puerto Rico. Puerto Rico, much to the chagrin of Puerto Rican sovereigntists, is a part of the United States and they utilize the US Dollar as their form of currency. Puerto Rico has been having their own debt crisis coupled with a terrible economy that is failing to diversify beyond tourism (see Greece). Their government also refuses to prioritize paying its creditors over the welfare needs of the most vulnerable of its citizens. They are also in heated negotiations with their creditors, which is not thankfully not as extreme as the IMF. These creditors include mutual funds and hedge funds, which include two large funds, Oppenheimer Funds and Franklin Funds. This is not good news for holders of mutual funds, but also for the markets despite the small size of Puerto Rico.
Chuck Schumer and other Senate Democrats have warned that if the United States government does not help Puerto Rico fix its financial problems, mostly with mutual funds and hedge funds, it could trigger a humanitarian crisis. This is probably more important to people closer to here as it could potentially trigger a massive migration of Puerto Ricans to parts of the United States, which Massachusetts seem to be a very prominent part of their future plans. As it is not saying that US citizens should shun Puerto Ricans, but they need to shun the approach that the creditors are dealing with Puerto Rico. While Puerto Rico's troubles might not be as headline news as Greece, which being a member of a very fragile Eurozone seemingly matters more for the world economy, it should be reminded that Puerto Rico could be in a bigger hole than Greece is. While US manufacturers could be open to moving their operations to Puerto Rico, other options are available to them such as the obvious choices in China and in Mexico, but also in some emerging export-based manufacturing countries. Puerto Rico's tourism industry could be improved and they could promote non-US citizens to travel to their wonderful beaches and resorts, it cannot be the solution to their economic malaise. Similar to Greece, they must take action to revitalize that manufacturing part of their economy, which had been previously a huge part of their local economy. With some work and government legislative actions, Puerto Rico can hopefully not be an American Greece.
