Another Reason to Keep Cash in a Water and Fire Proof Safe
When even ATM’s don’t work . . .
Hurricane Maria Has Transformed Puerto Rico Into A “Cash Only” Economy
Electricity, internet access and cell phone service have been offline in parts of Puerto Rico for a whole week. And with the island still struggling to rescue people stranded in remote villages, those managing the emergency recovery effort have yet to focus their attentions on the monumental task that looms ahead: Rebuilding the island’s devastated infrastructure, from communications to sewers and water treatment plants that have been damaged by flash flooding and 155 mph winds that Hurricane Maria visited upon the island.
The damage, as Bloomberg reports, has essentially knocked Puerto Rico’s economy back into the 1950s. For locals who’re struggling to begin the process of rebuilding their damaged homes, shops across the island are only accepting cash.
The cash economy has reigned in Puerto Rico since Hurricane Maria decimated much of the U.S. commonwealth last week, leveling the power grid and wireless towers and transporting the island to a time before plastic existed. The state of affairs could carry on for weeks or longer in some remote parts of the commonwealth, and that means it could be impossible to trace revenue and enforce tax rules.
The situation further frustrates one of the many challenges already facing a government that has sought a form of bankruptcy protection after its debts swelled past $70 billion: boosting revenue by collecting money that slips through the cracks.
The cash-only economy could create problems for the island’s cash-strapped government, as business owners will no doubt be tempted to avoid declaring some of their revenues, depriving PR’s government of badly needed revenue.
In fact, the power blackout only exacerbates a situation that has always been, to a degree, a fact of life in Puerto Rico. Outside the island’s tourist hubs, many small businesses simply never took credit cards, with some openly expressing contempt for tax collectors and others claiming it was just a question of not wanting to deal with the technology.
But those were generally vendors of bootleg DVDs, fruit stands, barbers – not major supermarkets. Now, the better part of the economy is in the same boat.
And after a week without power, the few ATMs on the island that still work have run dry, while most others are simply out of service.
As Bloomberg reports, many Puerto Ricans were still living off what money they thought to withdraw ahead of the storm. When a branch of Banco Popular in San Juan opened on Monday morning, the line stretched about 200 people deep for banking and ATM services. People fanned themselves with whatever they could find and held umbrellas against the sun. At the back stood Giddel Galliza, 64, a music teacher.
“I didn’t want to come because of the lines,” he said. “I need money for basic needs, food, gas – my tank is full but it won’t be forever. I normally pay with my card.”
A similar situation unfolded at a Banco Santander across the street. Erasmo Santiago, a 63-year-old mailman, said he was actually a Popular client but opted to pay a fee and go for the slightly shorter line. “I have my mom living with me, she’s 83,” he said. “So I need money.”
Some store owners, even those in areas of San Juan that are heavily policed, worry that carrying so much cash could leave them vulnerable to a robbery.
In post-hurricane San Juan on Monday, commerce picked up ever so slightly. With a little effort, you could get the basics and sometimes more: diapers, medicine, or even a gourmet hamburger smothered in fried onions and gorgonzola cheese.
But almost impossible to find was a place that accepted credit cards.
“Cash only,” said Abraham Lebron, the store manager standing guard at Supermax, a supermarket in San Juan’s Plaza de las Armas. He was in a well-policed area, but admitted feeling like a sitting duck with so many bills on hand. “The system is down, so we can’t process the cards. It’s tough, but one finds a way to make it work.”
Ultimately, turning the ATMs back on probably ranks lower on the island’s list of priorities than, say, keeping the diesel generators that are powering hospitals in operation, or evacuating 70,000 people from a river valley in danger of being flooded after a nearby dam failed.
Depending on how long outages persist, Puerto Ricans in some areas may need to resort to bartering for essential goods, as residents find ever more creative ways to transact in the absence of modern technology.