Peace for the World

Peace for the World
First democratic leader of Justice the Godfather of the Sri Lankan Tamil Struggle: Honourable Samuel James Veluppillai Chelvanayakam

Friday, April 29, 2016

Sri Lankan struggle to recover from the economic and emotional wounds of civil war

Sri Jegarajah

It looks peaceful and serene in the late afternoon but Elephant Pass – a strategically important gateway controlling access to and from Jaffna, the captial of Sri Lanka's northern province - was the focus of bitter fighting between the separatist Tamil Tigers and the security forces.

This is where war memorials honor the soldiers that fell in the government's campaign against the Tigers. But nothing tells the story of the civilian lives lost. And those that remain say they're struggling to re-build homes, businesses and a broader self-sustaining local economy under the shadow of military occupation.

What's encouraging is that enlightened business leaders in the private sector are stepping up. Sri Lankan conglomerate Cargills Ceylon and hotel group Jetwing have made investments with an emphasis on hiring locally and empowering the local community.

We visited a fruit, vegetable and dairy processing center owned and operated by Cargills Ceylon in what was once a war zone.

"It was a jungle when I came here in 2013, thick, scrub jungle," general manager Samuel Neshakumar tells me over locally made fresh mango juice. Now it's a bustling and thriving factory that supports 450 farming families.

Farmer Ponniah Maheswarn says he gets a good price for his produce, and he's growing cash-crops with more certainty now that he has a guaranteed buyer.

"They give us good rates if we give them good produce. There is no issue in that," he says.
Rasanayagam Sarojinidevi, 64, lost both her sons during the war and is still traumatized, but says she has found a new purpose working at a food processing factory owned by Cargills Ceylon.
Sri Jegarajah | CNBC
Rasanayagam Sarojinidevi, 64, lost both her sons during the war and is still traumatized, but says she has found a new purpose working at a food processing factory owned by Cargills Ceylon.

A devout Hindu, Ponniah has nothing but praise for Cargills. He calls them "second only to God," a sentiment echoed by 64-year-old Rasanayagam Sarojinidevi, who works in the staff canteen.

"For me to work here is a huge blessing from God. God has shown me this place, given me this job, only He has done this for me. I am finally peaceful here."

Cargills deputy chairman Ranjit Page says the battle for hearts and minds was a tough one.
"Winning them over, and for them to believe in a corporate from another part of the country is a challenge," Page recalls.

But problems persist and are limiting this region and its people from realizing their full potential. Debt levels have soared. Many cannot pay back what they owe, and that's led to reported suicides.

Several families we talked to – like Sivanesan Kamalarany and her family, uprooted by the war - are still waiting to be re-housed. They're frustrated by what they see as a lack of progress and it's taken a heavy emotional toll.

Kamalarani and her family fled to India in 1998 after their home was destroyed by artillery shelling. They returned in 2012 and built a temporary home by themselves but are still looking for a permanent place to live
Rajeshkumar Vijayarany tells a similar story.

"We are living with hope now that they will give us a house…living another day as a refugee doesn't help, and this is our land."
Workers bury the bodies of 41 suspected Tamil Tiger fighters recovered by the government after fighting in the northern district of Vavuniya in January 2009.
STR | | AFP | Getty Images

Workers bury the bodies of 41 suspected Tamil Tiger fighters recovered by the government after fighting in the northern district of Vavuniya in January 2009.

The military's presence here is undeniable. Much land remains under military and government control; the army even controls and operates businesses, from lagoon-side resorts to tours of former battlefields. Our crew took lunch in the picturesque Thalsevana Holiday Resort – run openly by the military, as its website proudly states – in a high-security zone.

Many in the country's capital Colombo argue the military's continued presence is necessary to prevent the Tigers from regrouping. But locals believe it sows distrust.

The previous administration did increase spending on infrastructure. The Yal Devi, a Colombo to Jaffna train service, was reconnected after 25 years. And war-weary Tamils appear to be putting the past behind them. In 2013, voter turnout in provincial election was almost 70 percent, the highest of any Sri Lankan province. The landmines have for the most part been cleared.

It's clear what needs to be done next – pick up the pace of post-conflict reconstruction, rehabilitation and reconciliation. The return of the successful Tamil diaspora would be a game-changer in terms of expertise, access to capital and support. Plus, demilitarization of former conflict areas and the revival of what were once thriving local industries are key.

The cement factory we visited in a high-security zone near the coastal town of Kankesanthurai is a good example. In its post-independence heyday, this cement works was a pioneering northern industrial development.

Now, it's idle, rusting, its parts cannibalized, at a time when it should be producing the material so badly needed for reconstruction. But talks have started to revive the cement factory, possibly with investment from the United Arab Emirates.

Green shoots are appearing but the road to a lasting recovery is proving to be a painfully slow one.
Of taxation, Inland Revenue and Panama Papers

Untitled-2Untitled-3Saturday, 30 April 2016
Avurudu vacation revelations

Court vacation always permits that little bit of extra time to pen something down and the occasion arose when former Dep. Governor of the Central Bank Dr. Wijewardene, Island Editor Shamindra Ferdinando and I were invited by Sirasa TV last Monday for a dialogue on this general theme.
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Immediately the following evening (Tuesday) our good friend Deputy Foreign Minister Dr. De Silva, an expert in the area of fiscal policy was heard to complain, during a debate on the same channel, of the appallingly low rate of registered tax payers as opposed to our income earning population; thus this discussion is too much of a temptation to just leave it there, hence these thoughts accompany my (belated) wishes to you for a peaceful and relatively prosperous Sinhala and Tamil New Year! 

Let’s use the backdrop of the now infamous Panama Papers revelations as a starting point. So we are made aware of some twenty odd Sri Lankans (yet unnamed) who are supposed to hold and/or benefiting from foreign holdings, assets or income amounting to trillions of rupees, which by law must be disclosed internally and be subject to taxation, unless of course they are entitled to some exemption such as double taxation regime. 

This is in addition to the so many “golden horses” and “foreign castles” etc that were mentioned regularly in the run-up to our people’s victory of 8 January last year and repeated ad nauseam in August which were assured to us as matters of priority that would be pursued, reclaimed and credited to the coffers of the people upon assuming governmental power. With all of this yet to see the light of day even one and half years later, we are now appraised (at last week’s Cabinet briefing) that, inter alia: 
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Chandra Fires Warning At Monetary Board Secretary


Colombo TelegraphApril 29, 2016
Good governance activist and former Chairman of the Ceylon Chamber of Commerce, Chandra Jayaratne has warned the Secretary of the Central Bank’s Monetary Board on possibility of imprisonment for as long as 10 years if a public servant is found guilty for corruption.
Chandra Jayaratne
Chandra Jayaratne
In a letter titled ‘The Responsibility of a Board Secretary to Advise the Chairperson, the Board & Top Management on Legal and Statutory Compliance and Risk Management’ to the Secretary on April 29, 2016, Jayaratne said a Board Secretary is expected to play an active role in risk management and in mitigating risk of institutional and personal liability of board members and top management, as well as in mitigating risks of reputation risks.
His letter comes, just weeks after he requested the Monetary Board Secretary to provide him all information pertaining to the recent Treasury Bond issuance from the Central Bank, amidst allegations of another bond scam.
The full text of Jayaratne’s letter is below;
29th April 2016.
The Secretary,
Monetary Board of Sri Lanka,
Central Bank of Sri Lanka,
Janadhipathi Mawatha,
Colombo 1.
Dear Sir,
The Responsibility of a Board Secretary to Advise the Chairperson, the Board & Top Management on Legal and Statutory Compliance and Risk Management
I am sure you will agree with me, that the Codes of Secretarial Best Practice places an obligation and an expectation that the Secretary of the Board will be responsible for advising and guiding the board in its deliberations and decision making, in regard to legal and statutory compliance requirements. The Board Secretaries are often expected to develop and oversee the systems that ensure that the institution complies with all applicable codes of conduct and ethics, in addition to its legal and statutory requirements. Further a Board Secretary is expected to play an active role in risk management and in mitigating risk of institutional and personal liability of board members and top management, as well as in mitigating risks of reputation risks.
In recognition of the above accountability, kindly review the under noted statutory provisions applicable in Sri Lanka, and address the need for you to brief the Chairman, Board Members and top management of the consequential compliance commitments and essential risk management processes accountability of the Board and theTop Management;
CHAPTER 26 of the LEGISLATIVE ENACTMENTS -BRIBERY – Being AN ACT TO PROVIDE FOR THE PREVENTION AND PUNISHMENT OF BRIBERY AND TO MAKE CONSEQUENTIAL PROVISIONS RELATING TO THE OPERATION OF OTHER WRITTEN LAW. (1st March, 1954,) where under *PART V – OFFENCES OTHER THAN BRIBERY- Includes the section 70 –Corruption- brought in to force by the enactment [§ 7,20 1994.] which reads as;
Four cops including SI interdicted over Dambulla bar fight

Four cops including SI interdicted over Dambulla bar fight
logoApril 29, 2016
Four police officers including a Sub-Inspector (SI) attached to the Dambulla Police Station have been interdicted in connection with an altercation which had occurred at a restaurant. 

The Police Spokesman’s Office said that a Sub-Inspector, two Sergeants and a Constable were interdicted based on a complaint regarding their alleged involvement in an incident at a restaurant in Dambulla on Wednesday (27). 

 It has been reported that the four policemen, who were dressed in civilian attire, had visited the restaurant in question for the purpose of obtaining liquor and got into an argument with the staff. 

 During the confrontation one of the police officers had pulled out a firearm and proceeded to threaten an individual at the establishment.  

A decision was taken to interdict the policemen in question pending an investigation into the incident.  
Friday prayers cancelled in Aleppo for ‘first time’ amid heavy fighting

Despite carnage, Aleppo has been excluded from fresh 'freeze' in fighting due to start tonight


Syrian civil defence volunteers remove body of man from rubble of destroyed buildings after airstrikes on Wednesday (AFP) 

Lizzie Porter-Friday 29 April 2016
MARDIN, Turkey - Friday prayers were cancelled in Aleppo for the first time since the war began, after days of airstrikes that led to scores of deaths and left mosques in ruins.
The city’s legal council on Friday asked mosque guardians to keep places of worship shut on the eighth continuous day of fighting in the northern city.
It recommended that people pray in private homes because of the risks posed by “God’s enemies” to public gatherings.
Friday is normally the most significant day of the week in the Islamic calendar, when thousands of people attend mosques to listen to imams’ sermons and worship collectively.

Oil rig helicopter crashes off Norway coast, 13 presumed dead

Rescuers work at a site where a helicopter has crashed west of the Norwegian city of Bergen April 29, 2016. NTB Scanpix/Marit Hommedal/viaREUTERS
Bergen, 20160429: A helicopter has crashed west of the Norwegian city of Bergen with 13 people on board. A rescue vessel lifts up parts of the helicopter. NTB Scanpix/Torstein Boe/viaREUTERS

BY STINE JACOBSEN AND OLE PETTER SKONNORD-Sat Apr 30, 2016

A helicopter ferrying passengers from a Norwegian oil platform crashed in the North Sea on Friday, apparently killing all 13 people on board, rescue officials said.

The 11 passengers and two crew on the flight from the Gullfaks B oil platform, operated by Norway's Statoil (STL.OL), were all Norwegian except for one British and one Italian national, according to the Rescue Coordination Centre for Southern Norway.

"The helicopter is completely destroyed," it said. After several hours searching for survivors, 11 bodies were found and the remaining two people were presumed dead.

Norway and Britain suspended commercial flights of the type of helicopter involved in the crash, an Airbus Helicopters H225 Super Puma, a workhorse of the offshore oil industry.

Airbus later said the grounding had been extended to the whole commercial fleet, 70 percent of which is used to support the global oil industry from the Gulf of Mexico to Asia and Africa.

Plumes of smoke rose from the scene in a stretch of sea with many small islands and debris could be seen on the rocks.

Several witnesses told Norwegian media they saw the rotor blades separating from the helicopter while still in the air.

"While I looked up, the rotor (blades) loosened and disappeared towards the north," John Atle Sekkingstad told the website of local paper Bergens Tidende.

"After that, the helicopter turned north and I saw fire at the top of the helicopter, where the rotor had been attached. It caught fire before it crashed."

The main body of the aircraft was lying under water, while its rotor was found on a rocky outcrop about 200 to 300 metres (220-330 yards) away, state broadcaster NRK said, quoting the rescue centre.
Oil worker Chris Andersen told NRK: "I saw the rotor separate ... It was horrible. There was a huge explosion that you could physically feel. You felt the vibrations."

The area, just west of Bergen, Norway's second-largest city, has frequent helicopter traffic to and from offshore oil installations. Weather conditions on the day were normal.

Norway's king and the prime minister expressed their condolences to the families of the victims.
"You are not alone in your sorrow," Prime Minister Erna Solberg, dressed in black, said in an address to the nation.

PRODUCTION, FLIGHTS HALTED

Statoil halted production at the Gullfaks B platform, a visibly upset company executive told a news conference.

"This is one of the worst accidents in Norwegian oil history," said Arne Sigve Nylund, Statoil's head of production in Norway, adding that the helicopter passengers worked for different companies, but were all on assignments for Statoil.

"This is a heavy day ... Some of our colleagues will never come home," he said in a trembling voice.
It was the second-worst Super Puma accident after a 2009 crash off Scotland in which the rotors also detached, killing 16 people. Investigators cited a catastrophic gearbox failure.

Tracking service Flightradar24 said the helicopter in Friday's crash dropped 2,100 feet (640 metres) in the last 10 seconds.

Formerly known as the Eurocopter EC225LP Super Puma, the aircraft is a long-range helicopter widely used in the oil and gas industry, as well as for VIP flights and search and rescue. Eurocopter changed its name to Airbus Helicopters in early 2014.

Imposing a temporary ban on commercial flights using the same type of helicopter, the Norwegian Civil Aviation Authority said it was too early to determine the cause of the crash.

Airbus Helicopters, a subsidiary of Airbus Group (AIR.PA), pledged full support for the investigation, which will be carried out by Norway with assistance from investigators based in France and Britain.

Norway said late on Friday it had found the two "black box" flight recorders, one capturing data and the other recording cockpit conversations, and would send them to Britain, which has experience of handling several recent helicopter incidents.

The crash deals a blow to an offshore industry already suffering weak demand due to low oil prices and puts the Super Puma back in the spotlight after a series of problems in the UK.

In 2012, Super Puma fleets were grounded after a pair of controlled ditchings that were later linked to gearbox cracks, prompting Airbus Helicopters to carry out modifications.

In 2013, four people died when an earlier version of Super Puma ditched off the Shetland Islands, off northern Scotland, in an accident blamed on crew.

The last helicopter crash in the Norwegian oil industry, in 1997, involved a Super Puma in which 12 people died.

Airbus Helicopters said it had no information so far to link the latest crash to earlier accidents.

The helicopter that crashed on Friday had been granted extended flying hours, or delayed maintenance, twice in 2015, an aviation authority official told Norwegian daily VG.

The flight was operated by Canada-based CHC Helicopter, owned by U.S. private equity firm First Reserve.

CHC confirmed that the life of a previous gearbox fitted to the helicopter had been extended, but said the gearbox fitted at the time of the crash was new. It said the aircraft was fully compliant with Norwegian rules at the time of the accident.

"The main gearbox in the aircraft in question, which has at all times been fully airworthy and compliant, was subsequently replaced in January 2016," said CHC's head of safety and quality, Duncan Trapp, in an emailed statement.

(Additional reporting by Terje Solsvik, Nerijus Adomaitis, Cyril Altmeyer, Tim Hepher; Writing by Gwladys Fouche; Editing by Alistair Scrutton, Robin Pomeroy, G Crosse)

PEN’s double standards over Israel boycott

Charlotte Silver-29 April 2016

Amidst a campaign aimed at convincing PEN American Center to reject Israeli government funding for its annual World Voices Festival that began this week, the literary group and its directorSuzanne Nossel have displayed glaring double standards in their approach to cultural boycotts.

When challenged about why the group has accepted funding from Israel, Nossel reportedly toldPalestine solidarity campaigners earlier this month that there was a strong reaction to the word “boycott” among her PEN colleagues.

But PEN American Center has publicly advocated that the tactic be used in certain situations.

Just last week the organization tweeted out a letter, signed by PEN American Center, urging singer Enrique Iglesias to cancel his upcoming concert in Azerbaijan.

The Spanish star was urged to protest against human rights abuses in Azerbaijan, including thejailing of journalists.
Suzanne Nossel (via Flickr)




Similarly, PEN American Center signed a letter to several country leaders in 2015 asking them to make their participation in the inaugural event of the European Games that were scheduled to take place in Azerbaijan contingent on the release of eight journalists and five human rights activists.

While the letter stated it was not seeking a “public boycott” of the event, it did actually recommend a boycott.

It asked the UK and Ukrainian governments to refrain from sending a “high-level delegation” to the games if the prisoners in question were not released.

Adviser to Hillary Clinton

Nossel has not been averse to calling for boycotts in a personal capacity, either.

In 2006, for example, she warned that Iran was “about as frightening a rogue state as can be imagined.” To support that assertion, she noted that Iran was “hostile to the United States.”

Writing on Democracy Arsenal, a website that she founded, Nossel suggested a “sports boycott that would exclude soccer-crazed Iran from the World Cup, akin to what was done for apartheid South Africa and [Slobodan] Milosevic’s Serbia.”

Along with running PEN America, Nossel is what certain media describe as a “volunteer adviser” on human rights to Hillary Clinton’s presidential election campaign.

Nossel was also a senior figure in the State Department when Clinton was secretary of state.
After leaving the State Department, she headed Amnesty International’s US branch.

Under Nossel’s leadership, Amnesty ran an ad campaign portraying the US-led invasion of Afghanistan as beneficial to that country’s women.

Journalists detained

More than 200 prominent literary figures and 16,500 other individuals have signed a letter criticizing PEN American Center for accepting Israeli sponsorship.

The Asian/Pacific/America Institute at New York University recently canceled its event at the World Voices Festival, scheduled for Friday.

The panel, titled “The Language of War,” was to have featured the poets Solmaz Sharif, Jennifer Tamayo, and Jennifer Hayashida.

All declared their support for boycotting the festival because it had accepted funding from the Israeli government.

The pressure on PEN American Center appears to have been effective. Jennifer Clement, president of its parent organization PEN International, recently promised to address criticisms raised by Adalah-NY, a New York-based group advocating a boycott of Israel.

“PEN International shares your concern,” Clement stated. “At present we are formalizing our recommended guidelines for the world’s PEN centers regarding funding from countries with a poor record on freedom of expression.”

PEN American Center has also broken its silence over recent human rights abuses by Israel.

On Thursday, PEN American Center issued a statement asking the Israeli government to explain why it has jailed the Palestinian journalist Omar Nazzal.

He has been placed in administrative detention – detention without charge or trial – after Israel arrested him in the past week at the Israeli-controlled crossing between Jordan and the occupied West Bank.
Nazzal was traveling to a meeting of the European Federation of Journalists in Bosnia.

The PEN statement also expressed concern about the detention and prosecution of Palestinian writer Dareen Tatour, who was arrested and charged with “incitement to violence” for a poem that she wrote calling for resistance to Israeli brutality.

Ru Freeman, a novelist who has been campaigning for PEN to cease accepting Israeli sponsorship, told The Electronic Intifada that this week’s statement was made “under enormous pressure” from Palestine solidarity campaigners and the wider public.

“But ​two ​questions remain,” Freeman added. “First, ​will PEN now speak also for ​the many other journalists and writers ​– and we can provide them with a list – whom​ ​Israel has detained​? And second, how can a statement about a government’s​ ​denial of ​the ​freedom ​of speech for writers and journalists be reconciled​ ​with taking money from ​that same government for a festival that​ ​​is supposed to celebrate​ ​free speech​?​”

At least 19 Palestinian journalists are currently being held in Israeli custody and more than 40 Palestinian journalists have been detained since October 2015.

Israel has, for instance, held 25-year-old Palestinian journalist Samah Dweik since 10 April, charging her with “media incitement” based on what she has posted on Facebook.

Democracy?

This week, the US-funded think tank Freedom House changed its ranking of Israel from “free” to “partly free.”

The reason given for the demotion was the increasing influence of Sheldon Adelson’s newspaper, Israel Hayom,which features a growing portion of government-paid content not clearly identified as such to readers.

Freedom House notably excludes from its criteria for its rankings Israel’s treatment of Palestinians in the occupied West Bank and Gaza Strip – despite the fact that Israel exercises the authority to arrest, imprison andkill Palestinian journalists.

In contrast, Reporters Without Borders does consider Israel’s treatment of those journalists, and consistently ranks Israel in the bottom tier of its world press freedom index.

Ireland set for minority government after two main parties reach deal

Fianna Fáil will stay in opposition but allow Fine Gael to govern until at least September 2018

 Ireland correspondent and agencies-Friday 29 April 2016

Ireland finally has a new government after its inconclusive general election in February.
The Republic’s two main parties, Fine Gael and Fianna Fáil, struck a deal on Friday that will lead to a new coalition.

Fianna Fáil has agreed to facilitate a Fine Gael minority government in a “political ceasefire” between the two dominant political forces in the state. But Fianna Fáil will remain on the opposition benches in the Dáil, the Irish parliament.

After an intense day of discussions at Trinity College Dublin, the two parties’ negotiating teams described the arrangement as “the first initiative of its kind”.

It is understood that Fianna Fáil will allow Fine Gael to govern until a review of the coalition’s performance in September 2018.

The 14 independent deputies in the Dáil have been summoned to government buildings in Dublin to be briefed about the deal.

They will play a key part in the formation of the new government and will extract a constituency-by-constituency price for supporting a Fine Gael minority administration as well as demanding major reforms over the way the Irish parliament is run.

Michael McGrath, one of Fianna Fáil’s negotiators, said he was “pleased and relieved” that the formal discussions were over.

“Our own parliamentary party members remain on standby for a special meeting of the party to be called at any time over the weekend if necessary to approve or not approve at their discretion the document,” he said.

Alluding to the original divide over the Anglo-Irish treaty in 1921 that partitionedIreland into two states, leading to a bitter civil war and the formation of the two parties, McGrath said: “When you consider the history of those parties, the near 100-year history of our state, this is the first initiative of its kind.”

In the February election, Fine Gael, led by taoiseach Enda Kenny, lost 26 seats but it remains the largest party in the Dáil with 50 seats. Fianna Fáil made a stunning recovery from a historic low of 21 seats in the 2011 general election to 44 seats this year.

Sinn Féin remains the third-biggest party with 21 seats and whose increased presence in the Dáil was the main reason why Fianna Fáil will not sit in government.

With a so-called “grand coalition” between Fianna Fáil and Fine Gael proving a step too far for rivals whose enmities were forged in the Irish civil war, a minority Fine Gael-led administration, with the support of a number of independents, has been the only realistic option for weeks. 

If Fine Gael manages to finalise negotiations with the independents quickly , a new taoiseach could be elected next week. 
Three previous attempts in the Dáil to elect a taoiseach in the wake of the election ended in failure. 

Sinn Féin’s president, Gerry Adams, accused Fianna Fáil of campaigning in the election to put Kenny out of office but striking a deal to keep him there. The Dáil member for Louth claimed Fianna Fáil had forfeited its right to lead the opposition.

“Whatever deal has been reached will, I have no doubt, fallen well short of delivering the change and investment required to tackle the housing and homelessness crises and fix our health service, and will not bring about a fairer, more equal society,” he said.

Puerto Rico Is on the Brink of Default

Puerto Rico Is on the Brink of Default

BY DAVID FRANCIS-APRIL 29, 2016

Barring an unlikely last-minute miracle, Puerto Rico is going to default on its debt Monday.

The U.S. commonwealth owes creditors $70 billion, and $422 million of that is due on May 1. This week, Puerto Rico Gov. Alejandro Garcia Padilla said “there will be a default on Monday,” adding, “I don’t think there is a deal on the table that avoids a default.”

Earlier this year, House Speaker Paul Ryan (R-Wis.) gave lawmakers three months to come up with a “responsible solution” to the island’s debt crisis, but so far Democrats and Republicans can’t come to terms on how to rescue Puerto Rico, home to 3.5 million U.S. citizens. The White House wants Congress to give Padilla’s government something similar to Chapter 9 bankruptcy protection, which would set up an orderly process for creditors to get paid back some of what they’re owed.

So far, lawmakers have failed to agree on legislation that would grant Puerto Rico this protection. Opponents of a bailout insist that the island must be more transparent about the state of its finances before a bailout occurs.

“I don’t think it’s fair to say it’s going to be a bailout upfront. I think that’s accurate, but the major concern is will it end up being a backstop?,” Rep. Dave Brat (R-Va.), a member of the conservative House Freedom Caucus, saidearlier this week of the proposed Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). “If we go along with setting up a control board and something goes wrong … who’s the backstop?”

Even HBO’s John Oliver has weighed in on the crisis, urging Congress to give Puerto Rico a lifeline.

A restructuring of Puerto Rico’s $70 billion in debt would be the biggest ever in the $3.7 trillion-dollar municipal market. State and local governments rely on these loans to raise cash to pay for the cost of operating.

Without congressional action, Puerto Rico’s default gets ugly quickly. When and if the island misses its payment Monday, it opens the door to larger and more consequential defaults on debt protected by the island’s constitution. Puerto Rico owes $2 billion on July 1. This includes an $805 million payment on its general-obligation bonds, guaranteed under the island’s constitution to be paid before anything else.

In March, Padilla said that without financial help, his government would not be able to deal with the Zika virus, because it did not have the cash to eliminate standing pools of water or other places where mosquitoes thrive. Bites from the bug transmit the virus, which has been linked to birth defects, and the CDC estimates 20 percent of Puerto Ricans living on the island could contract it. On Friday, the Centers for Disease Control and Prevention reported the first death from the virus on the island. 

And economic conditions there show no sign of improving, so chances that the government could eventually come up with the money it owes are slim. Puerto Rico faces a trifecta of challenges: Its government has spent irresponsibly for years; for five of the last six, it has failed to pass a balanced budget, a constitutional requirement. Its GDP hasn’t grown since 2005, floating in negative territory ever since.

And its population is shrinking, fast. According to a Pew report released in March, its population is 3.47 million in 2015, down 334,000 from 2000, or a 9 percent drop. Seventy-five percent of this loss has occurred since 2010. This continues the largest emigration in more than 50 years, Pew found.
Photo credit: SPENCER PLATT/Getty Images