By: Sophia Navedo-Quinones
In late July 2022, the Puerto Rico Status Act (H.R. 8393) was introduced to the House as the latest attempt to determine the island’s status. Unlike its five predecessors introduced during the 117th Congress, the bill is a combined effort between both statehood and independence advocates. Supporters for both sides center their debates on ethics, democratic values, and Puerto Ricans’ contributions to our country. However, there seems to be one argument that remains unsaid: the role Puerto Rico plays in protecting the homeland.
Today, Puerto Rico faces the consequences of decades of external governance, local corruption, and a crippled economy. Combined, these factors have created a fragile state in need of economic relief and susceptible to substantial foreign investment. Natural disasters and complex legislation, such as the Jones Act and amendments to the Federal Bankruptcy Code in 1984, have further exacerbated Puerto Rico’s economic plight. As it stands, a fragile Puerto Rico potentially increases the risk of U.S. adversarial presence in the Western Hemisphere.
Only 1,600 miles southeast of Miami, Puerto Rico is a gateway to the Americas. Home to the previously active U.S. Naval Station Roosevelt Roads and an Over the Horizon Radar platform, Puerto Rico contains key U.S. infrastructure to support defense and disaster recovery operations. Its location and infrastructure are what make the island appealing to any investor, but with overwhelming debt, investment could come at a cost. To understand the effects of foreign investment, consider a similarly situated country—Djibouti.
Located at the intersection of the Red Sea and the Gulf of Aden, Djibouti is adjacent to one of the world’s busiest shipping lanes. Its location in East Africa and proximity to the Middle East make it a strategically advantageous staging point for several major foreign militaries, including the U.S., China, France, and NATO forces. Djibouti gained its independence from France in 1977, but by 2021, China reportedly held over 70% of Djibouti’s debt. The debt crisis sparked concerns the country would need to cede portions of land as a means of repayment—like Sri Lanka’s lease of Hambantota Port only three years earlier.
In 2018, Sri Lanka agreed to a 99-year lease with China Merchants Port Holdings, granting the firm a 70% stake in the Chinese-built site. The $1.12 billion lease was generated to help reduce the Sri Lankan government’s debt to China. Concerns that China will leverage the port for naval operations intensified in late August when a military survey ship docked for a week. But how did Sri Lanka and Djibouti incur so much debt? Reliance on foreign investment.
Launched in 2013, China’s Belt and Road Initiative (BRI) aims to promote cooperation among economies and facilitate trade. However, critics view it as a guise for regional development and military expansion. Today, over 140 countries participate, making China the largest source of development finance in several regions. But these benefits come with a staggering cost. BRI infrastructure projects require the use of Chinese-owned contracting firms, which reportedly provide little transparency and, some worry, inflated cost estimates. How are these projects paid? Unlike the U.S. Agency for International Development (USAID) projects, which leverage grants, these ventures require Chinese-sponsored loans. Growing concerns among the international community have prompted the International Monetary Fund (IMF) to address the issue and work with China to reform BRI lending terms.
For Puerto Rico, the cost of enticing foreign investment may not outweigh the benefits of infrastructure revitalization. Instead, it could result in a pseudo-recolonization of the island. Likewise, allowing a Great-Power Competitor to gain a foothold in the Caribbean may result in significant ramifications within the Western Hemisphere at large. Until Puerto Rico’s debt crisis is resolved, independence is likely too risky for all parties.
We have reached a point in history where an independent status for Puerto Rico is potentially no longer realistic. If granted independence too soon, Puerto Rico would likely need to rely on substantial financing from foreign investors. Yet continuing to operate as a territory under economically crippling regulations will only intensify the core issues. As we consider Puerto Rico’s future, it is imperative our decisionmakers place greater weight on the national security implications all options entail. Allowing Puerto Ricans to choose is appropriate, but at this point, do we really have an option? If the U.S. intends to maintain security within the hemisphere, it must consider Puerto Rico’s status as a U.S. state seriously.