'Puerto Rico had never seen anything like it:' the meaning of the general strike.

Late on the morning of July 8, across the road from the main gate to the Isla Grande port authority complex in San Juan, Roberto Rosa, president of one of Puerto Rico's dock huddled with a few of his assistants to talk over their next move. As they met, several hundred striking dock workers and teamsters kept up a rhythmic picket line, replete with music and congas, under a torrid sun. The pickets were celebrating: None of the 5,000 people who normally work in Isla Grande had crossed the line.

"The teachers need our help over at the Department of Education," one aide told Rosa. "They say some scabs may try to get across their line."

"No," Rosa said. "We've got to cover Navieras [the huge truck depot about two miles away]. "Get four carloads over there to reinforce the line. And remember, no truck gets through."

It was the second day of a stunning forty-eight-hour general strike that paralyzed this island of 3.8 million and reverberated all the way to Washington, D.C., and Wall Street.

Puerto Rico had never seen anything like it. Nor had any other part of the United States, for that matter. You'd have to go back to the 1930s to find a general strike in even a single U.S. city. But this was happening in every town on this island of U.S. citizens.

More than half a million workers and students joined the strike, according to organizers. They shut down most government offices, universities, the ports, public buses, taxis, and many private businesses.

The protest was so effective that even before it began virtually every major shopping mall on the island announced it was closing for the duration.

The depth and militancy of the protest became clear on the first day, when the strikers staged a seven-hour blockade and engaged in a stand-off with riot police at the entrance to the Munoz Marin International Airport. That surprise move--along with wire-service photos of American tourists forced to carry their own baggage along the highway in the hot sun--prompted the major U.S. media to scamper belatedly to the island to cover an issue they had uniformly ignored.

This was no typical protest over wages or high unemployment. The general strike aimed to stop the $1.9 billion sale of the government-owned Puerto Rico Telephone Company to a consortium headed by Connecticut-based GTE Corp.

As such, it was one of the most startling blows any labor movement has struck in recent years against neoliberal economic policies in the Third World. From Brazil and Mexico to Bulgaria and Poland, countries have stampeded to sell off public companies at fire-sale prices. Often, these moves have sparked protests. In Brazil, the sale in July of the government-owned telephone company has become a major issue in this fall's presidential campaign.

Nowhere have the protests been more vocal than in Puerto Rico.

Why would half a million people lose two days' pay in hopes of stopping the sale of their phone company? Certainly, few of us in the United States feel any similar loyalty to our local Baby Bell.

But the Puerto Rico Telephone Company is more than a company. It is a symbol of Puerto Rican achievement. For decades, ever since it was nationalized in 1974 from the old ITT corporation, the company has been the pride and joy of islanders, much as the oil industry is to Mexicans.

When ITT ran it, phone service was available only to the well-to-do in the cities, and it was notoriously unreliable. ITT would regularly shift obsolete equipment from its subsidiaries in Chile and other Latin American countries to Puerto Rico.

Fed up with the terrible service, former Governor Rafael Hernandez Colon bought the company from ITT. Today, Puerto Rico Telephone is so profitable that it contributes $100 million a year to the government, provides free service to all public schools, and helps subsidize both public television and radio.

In addition, the company provides enormous support to civic associations. From the local Little League manager who needs uniforms for his kids to the block association that needs a sponsor for its annual event, Puerto Ricans have come to depend on La Telefonica for assistance.

And the company is no small operation. It is the twelfth largest in the United States, with operating revenues in 1996 of $1.2 billion. The system is as modern as any in the United States, with 1.2 million digital lines, 23,000 pay phones, 169,000 cellular customers, and 204,000 beeper clients. A call by pay phone still costs only ten cents.

Compared to the island's electrical and water systems, which perpetually fall victim to breakdowns, the telephone lines are very reliable, operating even in hurricanes.

The telephone company has given Puerto Ricans bragging rights: Here is something they do better than in the states. It's a symbol of the deep national pride Puerto Ricans retain even after decades of being American citizens.

The island's current governor, Pedro Rossello, is a fervent advocate of statehood, and the fight over Puerto Rico's political status forms a backdrop to the telephone strike (see sidebar). For several years, Rossello has been trying everything he can--and that includes worshiping the private sector--to persuade Republicans in Congress that Puerto Rico is fully American. Before the annual U.S. governors' conference last year, which was held on the island, Rossello insisted that Puerto Rico was not a nation. The first allegiance of all Puerto Ricans, he said, was to the United States. Of course, few Puerto Ricans need to have their patriotism questioned; Puerto Ricans have fought in every American war this century. His speech, however, created a furor because he seemed to be denying the sense of nationhood that many Puerto Ricans still feel. As a result, more than 80,000 people protested outside the conference under the banner WE ARE A NATION.

For several years, Rossello has been on a privatization binge, trying to persuade Congress that Puerto Rico has left the era of big government behind. He has sold off hospitals and regional airports and privatized various public school activities. But none of his other efforts kicked up the storm that his telephone company deal did.

Last October, a coalition of labor and community organizations called a twelve-hour general strike to protest the impending sale. That strike, which involved more than 100,000 workers, got no attention in the United States, even though telecommunications mergers were in the news.

Rossello refused to meet with union leaders and insisted the sale would go on. Then, on June 18, only days after the Puerto Rico legislature approved the final sale agreement with GTE, two unions representing 6,400 telephone company workers went on strike.

The main leader of the strike, Annie Cruz, was an unlikely hero. A former executive secretary who had not been politically active in the past, she is the leader of the smaller union of white-collar workers, the Independent Brotherhood of Telephone Employees.

Cruz became spokesperson for the coalition of sixty labor and civic organizations that called the general strike. The acronym for the coalition in Spanish is CAOS. And that is exactly what the group has brought to the ruling circles on the island.

"We have shown our movement's power," Cruz says. "The governor knows we can paralyze the country."

In the days following the general strike, the Rossello administration appeared to waver, at least in selling the company to GTE. With public opinion polls showing that 70 percent of Puerto Ricans wanted a referendum on the sale, and with new leaks that a Spanish telephone company had offered a far better deal than the American company, including a five-year, no-layoff guarantee for all phone company workers, Rossello left open the possibility of aborting the GTE sale and choosing the Spanish company, TISA. That would have delayed the sale for months and required a new vote in the legislature.

But then GTE sweetened its offer, and the governor, in a televised speech to the whole island at the end of July, said the deal would go through. After six weeks on strike, the disheartened leaders of the telephone unions began negotiating a return to work. They insisted, however, that they would challenge the sale before the U.S. Justice Department and the Federal Communications Commission, both of which must approve it.

No matter the outcome, CAOS succeeded in bringing workers, professionals, and students into a massive united front whose slogan was PUERTO RICO CANNOT BE SOLD.

The symbol of the July 7-8 general strike was not a telephone, or a laid-off worker, but the Puerto Rican flag. In every town, strikers and protesters carried thousands of them. The main symbol of the strike's opponents became the American flag. And thus did the sale of a phone company turn into a massive battle over the future of a nation.

RELATED ARTICLE: Poorhouse of the Caribbean

The still unsettled fight over the island's colonial status helped sweep the telephone company strike along. This year marks the 100th anniversary of Puerto Rico becoming a U.S. colony. On July 25, 1898, in the midst of the Spanish-American War, General Nelson Miles landed in the southwest coastal town of Guanica with several thousand U.S. troops and raised the American flag. Miles promised island residents their freedom. After 400 years of Spanish colonialism, many welcomed him. The U.S. occupation, Miles said, was "not to interfere with the existing laws and customs which are beneficial for your people."

Yet Puerto Rico was immediately turned into a prize of war under the Treaty of Paris, along with the Philippines, Guam, and the protectorate over Cuba.

For the first half of this century, the island was treated as a formal colony. Presidents appointed American governors who ruled as they saw fit. In 1917, Congress declared Puerto Ricans citizens of the United States, despite the overwhelming opposition of the island's own House of Delegates. The U.S. Supreme Court, in a series of rulings known as the insular decisions, defined Puerto Rico as "a territory ... belonging to the United States but not a part of the United States" (Downes v. Bidwell, 1901). These rulings became the legal underpinnings of the American colonial empire.

Meanwhile, U.S. sugar companies flocked to the island, gobbled up the best lands, paid their workers starvation wages, and made off with fortunes. By the 1930s, the island had become the poorhouse of the Caribbean.

Discontent with American rule spawned labor unrest and a strong nationalist movement. Roosevelt's New Deal defused the crisis by setting in motion local self-rule, an industrialization project to provide new jobs, massive emigration to the United States, and a buildup of military bases on the island.

Luis Munoz Marin, a democratic socialist and Roosevelt follower, became the island's first elected governor in 1948. Munoz devised the idea of commonwealth status, where Puerto Ricans would run local affairs but still be under U.S. control.

In 1952, Puerto Ricans approved commonwealth in a referendum, and the United States promptly reported to the United Nations that the island was no longer a colony.

Only during the past few years have all political forces on the island, as well as the White House and Congress, publicly admitted that Puerto Rico has never gone through a genuine process of self-determination. But efforts by the major Puerto Rican political parties to get Congress to agree to a binding plebiscite have foundered because of divisions in both countries.

Republicans fear that if a majority of island residents vote for statehood--in a 1993 nonbinding referendum, statehood garnered 46 percent of the ballots--it would shift the balance of power in Congress. Puerto Rico would be sending two Senators and at least six Representatives to Washington.

This impoverished, Spanish-speaking territory would also pose a challenge to advocates of English as the official language of the United States. And Puerto Rican statehood would increase pressures to resolve the status of the District of Columbia.

At the same time, Congress no longer wants to foot the billions a year it costs the federal government to administer mandated social programs on the island. It is like the slaveholder who no longer wants to pay the upkeep of his slaves. The cheap labor and tariff-free trade that once were the hallmark of Puerto Rico's industrialization can now be found at far better rates in dozens of countries around the world.

Still, the island remains immensely important economically. That importance is rarely understood, even among progressive Americans. Because the U.S. maritime fleet has a legal monopoly on the shipment of all goods into and out of Puerto Rico, in 1991 the island represented 21.7 percent of the entire world trade carried on U.S.-flagships. And tiny Puerto Rico has long ranked as one of the biggest sources of profit for U.S. corporations in tile world. In 1995, for instance, the number one country in the world for net income from U.S. foreign direct investment was the United Kingdom, with $13.7 billion. The comparable figure for Puerto Rico that year was $13.3 billion. The island produces more profit for American corporations than Wall Street's two Latin American darlings, Mexico and Brazil, combined.

No binding referendum on independence or statehood has ever been held. And the U.S. government has made it clear that, no matter what, its military bases are there to stay.

Many Puerto Ricans see the commonwealth as merely a dressed-up form of colonialism. It is no longer acceptable.

Juan Gonzalez, a columnist for the Daily News of New York, is the author of "Roll Down Your Window: Stories From a Forgotten America" (Verso).