Economic recovery is vital to close down drug smuggling and organized crime rings operating through the Island.

But the Puerto Rican economy does matter for the United States – and particularly for U.S. security. Given the island's proximity and ties to the United States – not to mention the perennial (and highly controversial) debate over Puerto Rico's status as a U.S. commonwealth and the ease of entering the United States once on the island – drug trafficking and violent crime in Puerto Rico have direct implications for U.S. security policy in the region. In the absence of a healthy economy and given the shrinking private sector in Puerto Rico, the growth of informal activities – drug trafficking and organized crime chief among them – Is the unfortunate consequence. In 2011, Puerto Rico saw a record-breaking 1,136 murders. According to the World Bank, in 2010 its per capita murder rate exceeded Mexico's by nearly 15 percent-and was almost 500 percent higher than that of the mainland United States. According to Estudios Tecnicos, a leading economic planning and consulting firm on the island, Puerto Rico, the so-called third border of the United States, brought in an estimated $5 billion in drug-trafficking activity in 2011, comprising an enormous 10 percent of the island's gross domestic product (GDP). In contrast to patterns along the U.S.-Mexico border, cocaine is the island's greatest drug threat-and trafficking of the drug is on the rise, with cocaine seizures in the region doubling from 2009 to 2010 alone. While 7 percent of U.S.-bound cocaine was trafficked through the Caribbean in early 2012, a full 14 percent came along Caribbean routes in early 2013. What is to blame for the violence and crime plaguing Puerto Rico? The answer to that question is complex. But the island's economy, currently suffering through a deep, grinding recession, is certainly among the key factors. Illustratively, Puerto Rico's debt- to-income ratio is nearly 83 percent-almost 14 times the same measure for New York, California, and Illinois. Puerto Rico's economic woes, particularly in combination with the political establishment's inability thus far to solve them and the ongoing debate over the island's legal status, leave in question what can be expected on the island moving forward, and what its government can do to get the island back on track. And though U.S. attention typically focuses on whether Puerto Rico should remain a U.S. commonwealth-or instead become an independent nation, a sovereign state in free association with the United States, or the fifty-fust state – it is solving the country's economic struggles, not its legal status, that will mean most for U.S. security moving forward. Though the media have paid some attention to Puerto Rico's economy in recent months, there remains a lack of awareness of the implications of the island's crisis for U.S. security. That issue can hardly be overstated. Whatever the nature of Puerto Rico's economic woes, their implications for U.S. drug policy and security are significant. By helping Puerto Rico patch together its broken economy, the United States can head off the serious security threats increasingly emanating from the island. Hoping to raise awareness on this issue, I brought in Jose J. Villamil, the leading Puerto Rican economist looking at these issues, to write this report, which provides an analysis of the challenges the island currently faces and what needs to change moving forward.