Concerns over a cash crunch in Puerto Rico were mounting Monday after Governor Alejandro Garcia Padilla said the US territory would not be able to pay debts worth 72 billion dollars, according to dpa. In a report, US expert Anne Krueger, a former deputy managing director of the International Monetary Fund (IMF) and former chief economist of the World Bank, suggested a 10-year adjustment plan with tax increases and cuts in public spending. "The situation is acute in the face of faltering economic activity, faltering fiscal and debt sustainability, and faltering policy credibility," Krueger wrote. "A comprehensive program that tackles all three has a better chance of success than a partial approach, and the advantage of sharing the costs and benefits of reform across government, workers, businesses, and creditors." Governor Garcia Padilla made the extent of the crisis very explicit in an interview published Sunday by the New York Times. "The debt is not payable," he said. "There is no other option. I would love to have an easier option. This is not politics, this is math." The White House says there are no plans for a US government bailout of Puerto Rico. "Ultimately this is going to be the responsibility of the Puerto Rican government to resolve," spokesman Josh Earnest said, even as Treasury Department officials help Puerto Rico navigate existing programmes to help it resolve its financial problems. Puerto Rico, a Caribbean island of 3.5 million people, is a free associated territory of the United States. Its economy has shrunk by close to 20 per cent over the past decade, and its population continues to age as many young people migrate to the US mainland. The island expects a budget deficit of 3.7 billion dollars in 2016. Speaking to the New York Times, Garcia Padilla said locals should not bear the brunt of the crisis. Rather, creditors should "share the sacrifices" of the Puerto Rican people. "If they don't come to the table, it will be bad for them," he said. "What will happen is that our economy will get into a worse situation and we'll have less money to pay them. They will be shooting themselves in the foot."
