Incoming Puerto Rico Governor Declares ‘Fiscal Emergency’

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Just hours after being sworn in as governor of Puerto Rico on Saturday, Pedro Pierluisi declared a “fiscal emergency,” requiring government agencies to cut costs by limiting travel, reducing third-party contracting and refraining from opening new positions, among other measures.

The executive order came after Pierluisi, 61, took the reins of the U.S. territory earlier in the day, promising to crush Covid-19, kick start a moribund economy and lead the U.S. territory out of a historic bankruptcy.

Pierluisi, who served as the island’s non-voting delegate to the U.S. House of Representatives from 2009 to 2017 and Secretary of Justice from 1993 to 1996, narrowly won election in November on a pro-statehood, pro-business platform.

He’ll be facing political headwinds. Pierluisi won the governor’s race with just 33% of the vote -- a historically thin margin -- and he and his New Progressive Party must contend with a divided and combative legislature.

During his swearing-in ceremony, Pierluisi asked his political rivals to set aside their differences.

“You’re not our enemy,” he said. “Our enemy is Covid-19 and other diseases. We have to work together against the pandemic so that we can resume our lives, our work and the education of our children.”

Hard Work

One of his first major tests will come in February when the federal board overseeing Puerto Rico’s finances will file a new proposal to restructure about $18 billion of island debt and lay out plans to begin repaying creditors for the first time since 2016.

“We are going to work hard to leave the government’s bankruptcy behind and attract investment,” he said.

He also promised to quickly tap billions of federal aid to rebuild the island after the 2018 hurricane season and series of damaging earthquakes in 2020.

The fiscal emergency declaration late Saturday was just one of six decrees Pierluisi signed. He also issued orders requiring the health department to design a robust Covid-19 testing plan, and ordered the local justice department to work more closely with federal prosecutors on corruption cases.

Pierluisi begins his four-year term as the Caribbean island emerges from a period of political instability. In August 2019, then-Governor Ricardo Rossello named Pierluisi his No. 2 shortly before resigning amid corruption allegations and mass protests. But Pierluisi’s stint as accidental governor was quickly overturned by the courts, paving the way for Wanda Vazquez -- then the Justice Secretary -- to take the top spot.

Pierluisi’s swearing-in ceremony has been controversial. At a time when there are strict curfews and limits on gatherings in place to contain the spread of the coronavirus, he invited 400 VIPs to his inauguration. His campaign says it minimized the risks by holding the ceremony outside and requiring attendees to present negative Covid-19 tests.

Speaking in front of the domed legislative building that faces the sea, Pierluisi said he would pursue his long-term dream of making the island the 51st U.S. state. Some 52% of the population voted in favor of statehood during a non-binding referendum in November.

“The people have made a clear statement and we are obliged to listen,” Pierluisi said. “Statehood is just, dignified and possible.”

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