A new economic plan makes a direct case for Puerto Rican independence moving past symbolic, emotional arguments for independence that are abundant within the pro-independence faction and focuses on economic, monetary and financial mechanics. This plan, dubbed ‘Plan B Independencia’ explained by Rolando Emmanuelli Jiménez, Puerto Rican lawyer and Martha Quiñones Domínguez, former Professor at the University of Puerto Rico and former President of the Association of Economists and the Puerto Rican Planning Society, proposes a 20-year transition to manage economic stability, engaging in trade without the constraints of the Jones act, reclaiming fiscal control, a monetary policy which when coupled with sovereignty could create a productive economic hub on the island.

To fix this predicament, the plan outlines a path to sovereignty, beginning with the rejection of the island’s colonial debt as an odious debt, a financial obligation incurred by a colonial power for its own benefit, not for the welfare of the island’s population. Although the Financial Oversight and Management Board (FOMB), created by the US Congress under the Obama Administration was tasked with resolving Puerto Rico’s debt crisis. The Board has worsened the situation by imposing strict austerity measures, deepened economic contraction and hindered recovery, making it harder to generate the revenue needed for any debt repayment.

This colonial debt, managed by an externally imposed Fiscal Control Board, should be understood not as Puerto Rico’s burden but as a liability of the US empire itself. So, severing this chain is the prerequisite for any sovereign accounting, allowing capital flows to be redirected inward. Moreover, the Board’s structure means the US government through its congressionally appointed officials is now directly managing the debt, effectively turning it into a US overseen liability. As a result, the people of Puerto Rico have no elected, accountable representation at the negotiation table. Local government authority is suspended, and the debt restructuring process is dictated by the Board and the US federal government making the debt a wholly US process.

A Way Forward

Plan B Independencia outlines two potential pathways for initial stability firstly negotiating a Transition Fund (TS) from the United States which would only be a fraction of what is currently giving Puerto Rico in funds, thus cutting costs for the Federal government by acknowledging its historical responsibility cited even in past US congressional bills. Nonetheless if that transitional fund is an impossibility, Puerto Rico could call for the immediate retention of revenues currently siphoned off and using that for the island TS. These include federal excise taxes, customs duties, and aviation fees, sums which alone could mirror the proposed annual subsidy.

On the first option for the TS, the goal is not perpetual aid but a sovereign wealth fund, a capital base to weather the shift without catastrophic collapse. But critical to the second option for the TS is the reclamation of policy tools via sovereignty, meaning control over maritime and airspace, enabling Puerto Rico to become a logistical hub freed from restrictive cabotage laws. It demands a sovereign food policy, rebuilding an agricultural sector long sacrificed to colonial trade priorities and a focus on authentic industrial productive capitalism not on neoliberal machinations.

In addition, a sovereign monetary policy is required to survive the inflationary consequences of US macroeconomic policy, which has sunk the island into a worse disenfranchised status making its colonial symptoms worse. US low interest rates and quantitative easing have flooded financial markets with cheap liquidity via digital money printing, that has contributed greatly to global and domestic US inflation, eroding both the US and therefore Puerto Rico’s purchasing power. Compounding this is the lack of effective US political leadership which merely enforces austerity, suspends local democracy, and manages the island’s economy as an extractive colonial liability. This leaves Puerto Rico with no viable path to stability or growth within the current US framework making independence the only option for growth.

Plan B Independencia’s economic restructuring explicitly rejects the neoliberal model that has hollowed out the island by advocating for a mixed economy where the state actively corrects market failures and strategically incubates domestic industry. The model takes inspiration from nations like South Korea — which ironically refined development strategies first tested in colonial Puerto Rico — engaged in a radical act of strategic appropriation, using the model’s core instrument, the state-directed export-processing zone, and embedding it within a fiercely nationalist developmental framework. While both models emphasized export-led growth, South Korea decisively rejected the passive, dependency-creating aspects of the Puerto Rican template. Instead of simply offering tax holidays to attract footloose foreign capital, the Korean state used access to its market and labor force as leverage to demand technology transfer, mandate joint ventures with domestic chaebols, and enforce strict performance requirements. This allowed South Korea to transform foreign investment from an end in itself into a calculated tool for national industrial learning and capacity building.

This critical divergence in objective fueled a unique and sequential industrial march, the “Korean Miracle.” Guided by a powerful and autonomous state, Korea moved with relentless discipline from light industries like textiles into heavy and chemical industries, steel, shipbuilding, and finally into advanced high-tech sectors semiconductors, electronics. This progression was underpinned by massive, state-coordinated investments in a highly educated, technically skilled workforce and in critical infrastructure. Consequently, South Korea did not just replicate bootstrap principles, it transcended it, evolving from an importer of foreign assembly plants into a generator of globally competitive, indigenous industrial giants. So, Puerto Rico remained a platform for externally controlled capital, while Korea became a sovereign industrial powerhouse, mastering and owning the chain of production.

The crucial difference is that South Korea possessed more national sovereignty and the political autonomy to adapt and enhance the model for its own strategic ends and of course the lack of the Jones Act. Unlike Puerto Rico, which remained a US territory subject to federal laws and policy constraints, South Korea’s independent state apparatus could wield its authority without external constraints. Their sovereignty allowed its planners to enforce the hard bargains and long-term discipline the model required. They could impose strict performance requirements on foreign investors, protect and subsidize nascent infant industries until they became globally competitive, and control capital flows to direct savings into productive national champions. Thus, sovereignty granted South Korea the power to use foreign capital as a tool, whereas Puerto Rico was structured to be a tool for foreign capital, with sovereignty transforming the same basic strategy from a formula for dependent development into an engine for sovereign industrial ascension.

From Neoliberal Colonial Neofeudalism Towards A Productive Economy

The proposed economic restructuring is a direct rejection of the neo-rentier model that Michael Hudson identifies as the core failure of neoliberalism. In Michael Hudson’s terms, this proposed model would be a rejection of a neo-feudal, rentierrelationship in favor of sovereign, industrial capitalism. Plan B Independencia seeks to transform Puerto Rico from a financialized zone of extraction where trade and investment have served to hollow out industry into a productive economy where the state safeguards the process of capital formation, technological learning, and balanced trade for the benefit of its own population.

As Hudson argues, neoliberal free trade rules are designed to prevent the rise of domestic competitors. Puerto Rico was forced into a state of permanent industrial infancy, prohibited from using protective policies to incubate its own infant industries, while its market was used as a tax shelter for external firms. Trade became asymmetric and predatory, oriented around extracting fiscal benefits for external capital rather than building a balanced, productive economy based on goods-for-goods exchange and local value chains. For Hudson, the state’s essential role is to defend the real, productive economy from the extractive financial sector. The plan’s active state is not “interventionist” in the abstract but corrective and protective, ensuring capital flows to productive domestic industry like the already mentioned possible medical tech and sustainable agriculture projects rather than speculative or extractive ventures.

The core of the restructuring should be in ending colonial tax distortions and engaging foreign capital on new terms is the application of Hudson’s distinction between productive and unproductive investment. Thus, by eliminating the crippling tax exemptions for external capital stops the bleeding of economic surplus via financial channels. The goal shifts from attracting any capital to attracting productive capital that aligns with national development. This is a shift from a rentier-based model to an industrial capitalist model, where profit is derived from building up the island’s productive forces, not from stripping them.

Puerto Ricos plan B calls for protecting endogenous infant industries while engaging foreign capital on renegotiated, equitable terms. What the plan proposes is not radical but a return to the proven playbook of productive capitalist development, which neoliberalism explicitly forbids to subordinate regions.

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Miguel Santos García is a Puerto Rican writer and political analyst who mainly writes about the geopolitics of neocolonial conflicts and Hybrid Wars within the 4th Industrial Revolution, the ongoing New Cold War and the transition towards multipolarity. Visit his blog here.

Featured image is from the author

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