How the Jones Act affects Puerto Rico; ‘the uncanny parallels’ with Hawaii

from Grassroot Institute, Aug 31, 2022

Hawaii and Puerto Rico share many similarities. Among those is the devastating effect on island economies of the Jones Act, which prohibits international vessels from carrying cargo between U.S. ports.

“There are some uncanny parallels between Puerto Rico and Hawaii,” Grassroot Institute President and CEO Keli‘i Akina said during the Aug. 30, 2022, episode of his “Hawaii Together” program on ThinkTech Hawaii. “One of them, of course, is the high level of economic impact of the law upon ordinary families.”

Akina’s guest on the show was Luis Ponce, co-founder and action director of Boricuas Unidos en la Diaspora (Puerto Ricans United in the Diaspora), or BUDPR.

Ponce said economic studies have estimated the annual cost of the Jones Act to Puerto Rico to be about $1.5 billion, or $1,050 per family. 

“When you also compare that with the poverty rate in Puerto Rico, then, you know, it’s a no-brainer that this needs to change,” said Ponce, whose organization promotes progressive policy options to improve lives for the people of Puerto Rico.

Asked by Akina to explain the “liberal” or “progressive” case against the Jones Act, Ponce said he highlights three main concerns: colonialism, economic cost and climate change.

“First of all, and especially after the Black Lives Matter [movement], which we wholeheartedly support, … people have been paying attention, … to historical grievances, racism, colonialism. And I think, especially for Puerto Rico and Hawaii — probably more than other territories because of the magnitude of the populations — you know, we are peoples that sometimes are overlooked by the American discourse, right? So that’s why, probably, Americans don’t engage around the Jones act. 

“So, that’s the first thing we tell progressives, right? This is like a decolonial issue. In the particular case of Puerto Rico, these laws were imposed on us. We didn’t have any … way of … negotiating this, and it just affects our everyday life. 

“And then the second is, like, it’s actually affecting the home economy of thousands of thousands of Latino families in Puerto Rico, right? We’re, like, people of color, and we are being like economically disenfranchised, thanks to the Jones Act.”

Regarding “climate change,” Ponce referenced recent hurricanes that devastated the island, and how the Jones Act poses a danger to the territory being able to recover after any sort of natural disaster, including earthquakes.

Ponce challenged the claims of a recent pro-Jones Act study that shipping to Puerto Rico is more affordable and reliable because of the act.

“The fact that all shipments come [to Puerto Rico] from Jacksonville,” he said, “that equals, to me, to a monopoly, right? So, you know, if that monopoly breaks down, then Puerto Ricans are stuck, right? Puerto Ricans are done, … left behind, right?”

He said when Hurricane Maria devastated Puerto Rico in 2017, the island couldn’t rely on neighboring countries to easily help. Instead, supplies had to come directly from Florida — which has led some to wonder what would happen if a hurricane were to hit both Puerto Rico and the Jacksonville area.

“We don’t have the proper tools, the proper vessels or the proper, you know, legislation to actually keep Puerto Rico stocked, keep Puerto Rico safe during an emergency like with Maria or an even greater natural disaster, which everybody’s expecting,” Ponce said.

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TRANSCRIPT:

8-30-22 Luis Ponce with Keli‘i Akina on “Hawaii Together”

Keliʻi Akina: Aloha, and welcome to “Hawaii Together” on the ThinkTech Hawaii broadcast network. I’m Keliʻi Akina, your host, and the president of the Grassroot Institute of Hawaii. Today’s program is going to focus on the Jones Act, but with a little bit of a twist. 

Many people who support economic freedom oppose the law, which is a 1920 maritime law that restricts shipping competition between United States ports. 

Today, I’m going to be speaking with Luis Ponce. He’s the co-founder of Puerto Ricans [Boricuas] United in the Diaspora, or BUDPR. It’s an advocacy network that promotes progressive policy options intended to improve life for the people of Puerto Rico. He’s also a director of BUDPR Action, which is a 501(c)(4) nonprofit organization. 

In this program, Ponce is going to discuss with me the progressive case against the Jones Act and how it harms the people of Puerto Rico, and perhaps what we can do about that. Please welcome to the program my guest today, Luis Ponce. Luis, welcome. Aloha.

Luis Ponce: Aloha. Thank you, Dr. Akina. I’m very happy to be in this program and, you know, hello to all your audience. Happy to be here.

Akina: Well, we have a special tie, being from islands across the world from each other, but we have a great deal in common because of our geography.

Ponce: That’s for sure, yeah, yeah. We’re very happy to be here with our Hawaiian brothers to talk about this important issue.

Akina: And we’ve done that quite a bit. We’ve been in contact with people from Puerto Rico who care about the economy, most definitely, and the impact of the Jones Act. So I’m glad today that we’re going to get your perspectives on that.

Ponce: Yeah, Thank you. And again, you know, it’s my pleasure to be here and inform your audience.

Akina: But first, tell me a little bit about yourself. I’d be really interested to know how you got into the work you’re doing now, and also tell us a little bit about the organization. 

In fact, I’m going to take the liberty of reading from your Facebook page. It says: “We are a network of Puerto Rican professionals ready to activate other Boricuas,” which means…

Ponce: Puerto Ricans.

Akina: Puerto Ricans. “… in the diaspora to fund progressive, community-led organizations in Puerto Rico.” 

And with that, tell us a little bit about yourself and your organization.

Ponce: Yeah, of course. Happy to do that. Yeah, well, I got started very early, you know, when I was young in activism and advocacy in Puerto Rico because of the colonial reality of our island, right? We are a U.S. territory with no vote in Congress and really, you know, don’t — we don’t elect the president. So since I knew that, I knew things needed to change. 

Fast forward a few years later, after going to Georgetown University for undergrad and then to law school back in my home country of Puerto Rico, I just continued to become active in civic issues, in community development work, and that eventually led us to form, with other law school rallies from Puerto Rico, our organization back in 2017. 

In August of 2017, just one month prior to Hurricane Maria, we knew it was going to be a busy hurricane season, so it was kind of like a preemptive move [on] our part to help not only form and engage Puerto Ricans on the island and their organizations that don’t have a voice or leverage in Congress, but also to inform Americans and lawmakers about the fights, the issues, the problems of our island. 

So that’s how we [came] to be. And besides, you know, working with organizations in Puerto Rico, we actually have a big advocacy effort permanently in Washington, D.C., through one of our co-founders, and we are constantly engaging lawmakers about Puerto Rican issues; we are constantly connecting Puerto Rican organizations, grassroots organizations in Puerto Rico, to lawmakers and really just educating them through social media or events. 

And particularly in the times of COVID, it has been a lot through virtual events, and we led in 2020, actually, we led a very interesting panel with Colin Grabow from the Cato Institute with other economists from Puerto Rico to discuss precisely the Jones Act and the cabotage laws.

Akina: That’s right, and we have been aware of your engagement with the Jones Act issue, and Colin Grabow is also one of our scholars at the Grassroot Institute. 

Now, you’ve been through so much in Puerto Rico… 

Ponce: Yeah.

Akina: Not only the history and political status and their impact upon your current economy, but natural disasters. And in all of that, of course, the Jones Act has [played] a role. 

How did you get involved as an organization in dealing with the Jones Act, and what kind of advocacy are you pursuing with regard to it?

Ponce: Well, first off, we’re trying to to create more awareness about this issue and also moving, moving the needle a little bit more from the conception that there is in Puerto Rico that mostly independent supporters or anti-American groups are, you know, in favor of repealing or accepting Puerto Rico, to actually bring like the Grassroot Institute, like Cato Institute, right, more into the focus so Puerto Ricans can understand that this is not like a purely ideological thing. 

This has to do with a larger conversation about the, not only the economic freedom of Puerto Rico, but the economic development. And actually, also, making things more livable and accessible to the large majority of Puerto Ricans. We are unfortunately under the poverty federal line, right? 

So we’re trying to mix all those things by creating these alliances and groups and just showcasing that our thought, or that the thought that people thought in Puerto Rico was only of a small sector, is actually a larger campaign, a bigger sector, and a larger preoccupation with the economic farewell of — sorry — welfare of our people.

Akina: Well, Luis, I couldn’t agree with you more that collaboration, crossing the aisle, working together and finding common ground are absolutely important in going forward. 

And when it comes to issues that affect our people across the board, there’s no place really for partisanship. We really have to work together. 

But as you know, the Jones Act often receives support from politicians and others who consider themselves, quote-unquote, “liberal” or “progressive.” 

Can you explain why progressives, in your thinking, may want to reconsider their position with regard to the Jones Act?

Ponce: Well, first of all, and especially after the Black Lives movement, the Black Lives Matter [movement], which we wholeheartedly support, you know, people have been paying attention, you know, to historical grievances, racism, colonialism. 

And I think, especially for Puerto Rico and Hawaii — probably more than other territories because of the magnitude of the population — you know, we are peoples that sometimes are overlooked by the American discourse, right? So that’s why, probably, Americans don’t engage around the Jones act. 

So, that’s the first thing I will tell, you know, we tell progressives, right? This is like a decolonial issue. In the particular case of Puerto Rico, these laws were imposed on us. We didn’t have any making or way of, you know, of negotiating this, and it just affects our everyday life. 

And then the second is like, it’s actually affecting the home economy of thousands of thousands of Latino families in Puerto Rico, right? We’re like people of color, and we are being like economically disenfranchised thanks to the Jones Act, which actually, you know, in studies that have been made in Puerto Rico, you know, like the negative effect to the Puerto Rican economy is $1.5 billion. That basically means [it’s] $1,050 more expensive for each family in Puerto Rico. So, when you also compare that with the poverty rate in Puerto Rico, then, you know, it’s a no-brainer that this needs to change. 

And I finally, you know, I think it also has to do with another hot topic of the progressives, you know, which is climate resiliency, you know, in the face of climate change. Puerto Rico imports almost 90% of our foodstuff, and all of that mainly, and you know, actually, only comes from the Jacksonville port in Florida.

I mean, many people think on the Jones Act and the hurricanes.”Oh, OK, so Puerto Rico will get hit with the hurricane.” But what happens if the hurricane devastates Florida, as it has happened in the past? Then, you know, Puerto Rico will never, ever get, you know, in a timely manner the necessary emergency relief material — food — to actually recover. 

So, I think those are like the three main things that I tell progressives on the Jones Act issue.

Akina: It’s obvious that Puerto Rico is at a tremendous disadvantage due to the Jones Act economically, but I’m glad to hear you explain that some of the issues that are dear to progressives that are engaged in that as well. 

There are some uncanny parallels between Puerto Rico and Hawaii. As you were talking, I was just listening, and one of them, of course, is the high level of economic impact of the law upon ordinary families. 

Another one comes from the name of your organization: Puerto Ricans United in the Diaspora. So, what caught my eye at first was “diaspora,” because that’s often used to talk about people from Hawaii. We have a dwindling population in our state because economic conditions are driving people to leave the state. 

In fact, when it comes to Native Hawaiians — the indigenous people — the majority of them live outside of Hawaii, which is a surprise to everyone. 

But, tell me a little bit about “diaspora” as part of your name, and not only your name, actually. What I’m really asking is: As part of the experience of the Puerto Ricans who have left their homeland, what are the causes of this?

Ponce: Yeah, no, thank you for that question. I’m very glad you asked that. 

And, you know, it actually, what you just mentioned — right? — the fact that even Hawaii as a state has dwindling population, people are leaving their home islands, it’s something that we see that could potentially happen to Puerto Rico if it ever becomes a state. 

And it is actually already happening. And it is happening under, you know, the U.S. sovereignty and under, you know, all the programs — mostly all of the programs that we will also have under statehood, which is what, you know, statehooders in Puerto Rico say, right? So I think that’s worth — that’s great that you mentioned that, you know. I wasn’t actually fully aware of that. 

The term diaspora — yeah, we also use it. And there’s been like a, there’s been a historical diaspora from Puerto Rico in the early 20th century up to the mid-20th century, right — a lot of workers exiting Puerto Rico to help, especially in the fruit and vegetable industry in the East Coast, and then like the canning and the industrialization of the East Coast. 

And then I will say there’s a more recent diaspora, which our group is part of — like the three of our co-founders and most of the people we work with are Puerto Ricans that have left their, you know, our island just to make ends meet — [that] has happened because of the, I always say, you know, of the triple terror of the debt-ridden economy of Puerto Rico. 

Like, after Section 936 of the [Internal] Revenue Code expired in the early 2000s, that just started depressing the economy, and there wasn’t a proper plan to address that. And, you know, Administración de Puerto Rico knew that that was coming, and they never did anything.

That skyrocketed the debt and, in turn, that provoked the U.S. Congress to impose a federally sanctioned and unelected body called the [Financial Oversight and Management Board for Puerto Rico], which has actually impacted, inflicting a lot of economic pain through large austerity measures. 

And then finally, I will say the, all the natural disasters, which, you know, some can also be characterized as manmade disasters, like hurricanes, mainly, right, due to climate change. But then also we also had earthquakes, and then the pandemic, right? 

So all that has just exacerbated and put so much pressure on Puerto Ricans that there is no other option, unfortunately, especially for professionals, [than] to leave their family behind, their friends behind, and try to look for a better future. 

Most of us go to the U.S. — right? — because of the U.S. citizenship, right? And, you know, it’s essentially, it’s the country that invaded Puerto Rico, right, and that controls Puerto Rico. 

But there are other many thousands of Puerto Ricans that are like all across the world, right? So that’s what we call diaspora, right? Like it’s the Puerto Rican nation abroad, right, away from Puerto Rico. 

And as [with] any other diaspora — and with this, I want to end — and contrary to some of the opposition we have received, diasporas are fully engaged on what is happening back in their countries, you know. And there are multiple examples across different nationalities and countries, and I probably, I would like to know more how Hawaiians in the diaspora keep engaged with Hawaii. 

But, you know, we have the Irish diaspora historical [example]; you know, we have, in cases, you know, the Bangladeshi diaspora — just to say that a more, you know, Third World country example, right? That they are constantly active on sending money back to their families, and the Puerto Ricans are no exception.

We want to — we want the best for our island. We have still family. We have friends. We actually go back often to Puerto Rico. And what we’re seeing is something that we don’t like. 

So that was like the main drive to actually form BUDPR — we wanted to change that. And if we have power here in the United States — where we can vote, we can move lawmakers, we can move other people on behalf of Puerto Rico — we will do it. There’s no question that we will do it. 

And that actually has been the hallmark of our work. We have gone to move people on issues and talk about issues that are usually uncomfortable but need to be addressed in order to change what we are unfortunately are seeing in Puerto Rico, which is a mass exodus, massive brain drain, and the economy, honestly, is not recuperating.

Akina: Luis, I’m glad that you’ve pointed out the actual toll upon Puerto Rico of this exodus of its people. It’s certainly, it’s political in terms of losing population base and even the opportunity, should it arise, to ever increase the number of representatives in Congress. 

It’s definitely, as you put it, the brain drain, the loss of economic capacity. And culturally, people are leaving their home. And so, I personally feel with you, being from an island home and seeing our population leave. We want to work hard to be able to create economic conditions that make it possible for our children and grandchildren.

Ponce: Yes, yes. Precisely. And if I may ask, you know, that also comes to the cost, of course, like population displacement and population replacement, right? So, now in Puerto Rico — and I did see some of the studies that you have done — right? — that probably necessarily people from the outside are not impacting the prices. But in Puerto Rico, it is, actually. 

In Puerto Rico, mainland Americans can now afford the houses in Puerto Rico that Puerto Ricans cannot afford, right? And there is like a whole movement now in Puerto Rico calling against that displacement, which I know is a very, a controversial issue. 

But, you know, what’s going to be the future, right, of Puerto Rico when Puerto Ricans leave? Because Puerto Ricans cannot afford to actually buy a house on the Island, right? I think it’s getting to a very, very complicated situation down there.

Akina: And to follow up just on that point alone, you’ve touched on another dovetailing similarity between Hawaii and Puerto Rico, and that is the cost of our housing. 

Ponce: Right.

Akina: [It’s] so exorbitant, the average person simply can’t afford to buy or even rent. 

Now, going back to what you mentioned in terms of natural disasters impacting Puerto Rico. In 2017, Hurricane Maria struck very hard and did billions of dollars of damage from which you haven’t fully recovered at all. 

Ponce: Yeah.

Akina: How, in particular, has the Jones act made recovery from Hurricane Maria difficult?

Ponce: Well, I mean, the first thing is that when immediate help was needed, neighboring countries — which, of course, you know, are independent, sovereign countries — couldn’t easily, you know, come to our assistance, you know, like we have a… 

And, you know, and not to get into any political or ideological debate, but you know, like Venezuela is almost our next-door neighbor and they have oil, right? So we could have probably [had], you know, easy access to oil, right, in the aftermath. The same with foodstuff from the Dominican Republic and from other like South American/Latin American nations. 

And the fact of the matter is that that wasn’t even, you know, that wasn’t even possible, like, Puerto Ricans had to wait. There was like an emergency like Army and, you know, U.S. Navy move that they actually were the ones that bringing and just like dropping foods out from helicopters. 

And I know it was also part of during President [Donald] Trump’s administration, he actually lifted — they, he waved it for like 10 days, which wasn’t sufficient, right? It was like trying to cure a cancer patient just by putting like a bandage. And that I think also uplifted the debate about whether, you know, the Jones Act needed to be, you know, repealed for Puerto Rico.

So, there was great suffering because the emergency response couldn’t be fast enough because we had to wait for Jacksonville vessels to actually come and deliver the needed goods. 

And, you know, thankfully, it didn’t — a major humanitarian tragedy was avoided. But that doesn’t, you know, say that it couldn’t happen again with a more powerful hurricane or a hurricane that, for example, hits Puerto Rico and then on the way north also hits Florida. And then what are we going to do here? So I think that’s the fear that Puerto Ricans have started to realize. 

And the other compounding factor, right, because I know — and I know we’re going to get into the aspect of refuting some of the proponents of the Jones Act, or the defenders of the Jones Act — but the thing is that even though, yes, the Jones Act will allow foreign ships to dock and, you know, to deliver goods, then after that, they cannot go to the U.S. port, right? 

So that actually like defeats the purpose of these other vessels to actually, you know, participating from the economy of the biggest economic partner in the hemisphere, right? So that actually dwindles the possibility of Puerto Ricans having a more diversified economy on shipping and of actually being part of the logistics of international maritime trade. And that again has negative effects on Puerto Rico, as I just mentioned. 

But during a crisis, we will just be, you know, in basically in a deserted island in the middle of nowhere because we don’t have the proper tools, the proper vessels or the proper, you know, legislation to actually keep Puerto Rico stocked, keep Puerto Rico safe during an emergency like with Maria or an even greater natural disaster, which everybody’s expecting that’s going to happen again.

Akina: Right. It’s important that the lessons be learned and we follow up on them. 

Now, there’s so much more that you and I could talk about, but I want to jump ahead to a subject that you had agreed to discuss as we close off our time together. 

A recent study by the Transportation Institute, which is a pro-Jones Act group, purported to show that the Jones Act actually provides economic benefits to Puerto Rico, and it ensures reliable shipping. 

You’ve taken a look at this study. What is your position on this?

Ponce: Yeah, well, the first thing that comes to mind is that, you know, and we always ask this, right, when we are trying to understand Puerto Rico: Were there any, you know, Puerto Rican scholars involved in this study, you know, like, and what was the methodology of this study, right? So yeah, then, you know, it can be open to scrutiny. 

And this is something that we actually raise a lot because a lot of people can talk about Puerto Rico, you know, and, you know, and we are not here to question the validity of science and all that, but, you know, if you don’t bring the people, the experts from where things are happening, then, you know, I think the results of these studies are not, you know, are not truly to what is happening in the reality, in reality.

The second thing I will say is that, you know, the reliability factor, I mean, was just, you know, highlighted during the — an emergency, right? And the fact that all shipments come, all shipments come from Jacksonville, right? I mean, that’s, you know, that equals, to me, to a monopoly, right? So, you know, if that monopoly breaks down, then Puerto Ricans are stuck, right? Puerto Ricans are done, like, left behind, right? So I will also like, you know, like, counter argue that. And the numbers done by Puerto Rican economists… 

And actually, there’s like a coalition between, you know, the Puerto Rican Chamber of Commerce, the minorities and other like groups in Puerto Rico that are also banding together, and we have actually had them in some of our events, you know. They have, you know, shown how expensive it actually is for Puerto Ricans, right? It’s almost like 2.5 times more expensive, right? And all [those] costs are passed, you know, to Puerto Rican families, right? 

So I mean, I think that study, it seems that it was made, you know, as a political, you know, gift to the supporters. 

And I know, right, I know there are other aspects of the Jones Act that are beneficial or could be, you know, reframed to be beneficial, you know, like labor, you know, military, national security. But at the end of the day, you know, and we have discussed this here already, is just making a big drain in Puerto Rico’s economy in hindering Puerto Rico’s ability to develop itself to be part of the international maritime logistics. 

I mean, again, it’s costing $375 — this is a story made in 2016 — per individual in Puerto Rico for the Jones Act, right? So that just reflects on the cost. And now with the inflation, worldwide inflation, you know, the cost in Puerto Rico is just skyrocketing. 

So, I have my doubts around that story. I will definitely like to — it will be ideal, right, like we can get, you know, the methodology around that, get the whole data so we could analyze it.

But, essentially, this is something — and with this, I’ll finish this question — that in the past, you know, economists in Puerto Rico have definitely refuted, right? There’s a great economist, José Caraballo-Cueto, he’s a professor at the…

Akina: Right.

Ponce: University of Puerto Rico-Cayey. We also had him with Colin Grabow in our program back in 2020. And, yeah, he has been great in refuting one by one, all these myths. I will say, even like fables that the supporters of the Jones Act have put together.

Akina: Well, Luis, you’ve been wonderful in the presentation today. I appreciate the work you and your organization are doing.

Ponce: Thank you.

Akina: Let’s move ahead to help the people of Puerto Rico, Hawaii and the entire world. 

Ponce: [Gestures thumbs-up sign]

Akina: Now, as we close, tell our audience how they can get in touch with you if they so like to do that.

Ponce: Yes, for sure. Well, you mentioned earlier — right? — like we have a Facebook page, so you can just like put [in] BUDPR on Facebook, and you can find us. 

We also have a website: BUDPR.org. That’s our main website where you can also, you know, sign up, be engaged and see all our past events. 

We are also active in Instagram and on Twitter. So, but, you know, actually, we have almost like 5,000 [followers] on Instagram, and we have like more than 13 — like 13,000 followers on Facebook, so. And lastly, our email is patria, like [the word] motherland in Spanish, patria, P-A-T-R-I-A, at BUDPR.org. [patria@BUDPR.org]

Akina: Terrific. Luis, thank you so very much. We’re going to continue to work together toward our common end. 

My guest today has been Luis Ponce. He’s the co-founder of the people, the Puerto Ricans United in the Diaspora, and you can get a hold of him directly. 

Much aloha to you. See you next week. 

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