Ecuador is still reeling from the devastating 7.8 magnitude earthquake that struck last week, killing 654 people, injuring 16,600, and leaving 25,000 homeless, Vice News reports:
Last Wednesday, President Rafael Correa announced on Ecuadorian television that everyone was going to have to shoulder the burden of the quake. As a result, he plans to increase sales tax by 2 percent, dock government wages once for those earning more than $1,000 a month, and impose a new personal wealth tax for the country’s millionaires.
But Correa’s plan weren’t entirely well-received, and some officials have complained that the economy is already in such dire straits that the country can’t afford a tax hike. In Portoviejo for example, one of the coastal cities that was badly hit by the quake, residents are concerned about the impact that higher taxes will have on sales.
The earthquake is historic not only for the magnitude of the destruction and human suffering, but also for giving rise to the most impressive mobilization of civil society, notes one observer. But on the day before the earthquake Correa criticized Ecuadorian and international civil society groups, claiming non-governmental organizations threatened its democracy.
Estimates that put the cost of the damage at no less than 5 percent of G.D.P. are particularly awkward for Mr. Correa, who still has more than a year in office, notes Martín Pallares (right), a former Knight fellow at Stanford, and a founding member of the alternative news site “4Pelagatos.” The government finances were already in a mess, but now the president could be forced to seek assistance from organizations like the I.M.F. that he despises for ideological reasons, he writes for The New York Times:
But that’s not the only problem. The people who have been out working in the rubble-filled streets since the earthquake have not forgotten that Mr. Correa has always criticized the idea of creating savings funds financed by surpluses from oil revenues. He even liquidated those set up by the previous government, saying that they merely benefited the international banking system and that it was better to spend the money on projects. Now, with the country on the brink of bankruptcy, people are asking why Ecuador doesn’t have a savings fund like the one Chile had built up with revenues from its copper industry, a fund that helped to provide the more than $25 billion needed to cover the costs of reconstruction after a major earthquake in 2010.
4Pelagatos is the brainchild of three opinion journalists and a cartoonist who were singled out by Correa for their critical analysis, and subsequently pushed out their newspapers. In only two months online, this digital platform has received 1.8 million viewers, and has positioned itself as one of the most read online news pages in Ecuador.
The earthquake was not the only natural phenomenon threatening Ecuador’s future. The Cotopaxi volcano near Quito is active right now; a major eruption could cause a disaster far worse than this quake, Pallares adds:
Is the country ready to cope with such an event? Mr. Correa says it is. But it’s clear that it’s not. For now, what we see is that civil society is doing the work that the government was not prepared for.