"I read the news today, oh boy!"
— The Beatles, "A Day in the Life"
Every so often a news story grabs your attention and you say, "Whoa!" The announcement that the government of Puerto Rico will lay off as many as 30,000 workers was such an item. The impact of these cuts is unknown, but it is certain to be vast and long-lasting. Puerto Rico’s public sector is huge, with a ratio of one public worker to 20 residents. By comparison, California has one state worker for every 100 residents. The ratio of workers to residents in the Virgin Islands is somewhere in the range of 1:11. According to the World Bank, government’s share of overall economic activity is 12 percent in Puerto Rico. It is 35 percent in the Virgin Islands.
Puerto Rico’s actions are being taken to close a budget deficit of more than $2 billion, proportionately the biggest in the United States. The sources of the Puerto Rican crisis are complex and rooted in decisions going back many years. But it is clear that far more than the number of people being let go will be directly and indirectly affected by these layoffs. And the four-year old recession in Puerto Rico seems certain to deepen in the months ahead.
It is important to understand how Puerto Rico got into this fix. It would be useful if that exercise could be done without finger pointing and making every discussion political. This is unlikely. And, for most people, the primary response is going to be a simple one: What does this mean for me and my family?
For leaders and managers, there is another set of questions that have to be asked and answered. And these questions have as much relevance in the Virgin Islands as they do in Puerto Rico. First, there is a critical need to understand the dangers that these situations pose. Because we live in a peaceful and stable part of the world, we take this peace and stability for granted, the natural order of things. This is both a mistake and a failure of imagination.
We should consider peace and stability to be values that have to be protected because they are almost certain to be tested in the months and years ahead. It is worth doing some worst-case analysis and keeping in mind W.B.Yeats’ poem "The Second Coming":
Things fall apart
the center cannot hold
Mere anarchy is loosed on the world
The blood dimm’d tide is loosed, and everywhere
The ceremony of innocence is drowned
The best lack all conviction, while the worst
Are full of passionate intensity
Overreaction? Probably, but a part of solid planning is to consider events that seem unimaginable, but could happen. (Why do the Sept. 11 attacks always pop up in this category?) And for the Virgin Islands, the dangers posed by a sustained and self-reinforcing downturn are substantial.
These dangers are shaped by a number of linked realities: the heavy dependence on tourism; the size and low productivity of the government sector; inter-group and inter-island tensions, rivalries and resentments; and bad, interest-group-driven politics.
In a real crisis, the dividing line between success and failure is often the ability to get everyone pulling in the same direction. Each of the realities just listed makes it hard to achieve that in the Virgin Islands. Everyone or every group looking out only for its own interests is the definition of "the center cannot hold."
It is not clear whether Puerto Rican leaders planned effectively, considered the full range of options and communicated in the best possible way. These things are never clear when we are confronted with decisions that range from bad to even worse. What is clear is that the dangers we face are far greater when we wait until the crisis is upon us. I’m far less likely to look at the big picture when my livelihood is on the line then when we are trying to learn lessons from the experience of someone else.
For the Virgin Islands, the unfolding drama in Puerto Rico can provide an education without the requirement of paying tuition. There is an opportunity to think and plan based on probabilities, and on dealing openly with those things that will block or impede getting the best possible results. At the front end, this will require soul-searching by people and institutions that have shown little inclination to take a critical look at themselves in the past.
It will also require thinking through the government-driven economic model that provides employment but does not effectively deliver the services that Virgin Islanders depend on every day. Neither condemning a "bloated public sector" nor digging your heels in to defend an indefensible status quo is going to be a useful strategy. Finding the best possible size and structure for government services to meet the needs of all Virgin Islanders is a lot better approach. And it is one that can provide a shared framework to respond to the crisis if and when it comes.
These are all the kinds of hard issues that political leaders — and others — like to avoid and put off. But one thing that we can be quite sure of is that decision-makers in Puerto Rico and other places in crisis would like to turn the clock back and have more time to plan and gain consensus. The clock is always ticking.
