Friday, June 26, 2015

Thousands protest against Correa in Ecuador (June 26, 2015)

Thousands of protesters gathered yesterday in Guayaquil, Ecuador's largest city, to protest President Rafael Correa's policies, especially proposed inheritance tax reforms. Though Correa temporarily withdrew the contested bills from parliament ahead of a papal visit next week, protesters are demanding their permanent shelving.

Led by Guayaquil mayor Jaime Nebot, a member of the political opposition, yesterday's demonstrations -- which also took place in Quito and other cities around the country -- were part protests that have been ongoing for the past three weeks. The nominal reason is a proposal to tax inheritances up to 77.5% and a 75% tax for capital gains from real estate, though protesters are also complaining about other economic policies and "what critics describe as President Correa’s dictatorial attitude," reports the Wall Street Journal.

Correa is criticized by foes for his confrontational style in dealing with such sectors of society as the church, the press, banks and traditional political parties. Human rights groups have called him intolerant, reports the AP.
Nebot said Ecuadorians don't want to become Venezuela, and suggested protesters give Correa a "democratic kick" in the ass, reports AFP.

Government supporters have held counter demonstrations, often simultaneously, but separated by police. Correa says the new policies are aimed at creating greater equality and rejects protests as attempts to destabilize his government.

Economists say both bills will negatively affect Ecuador’s economy and families in a country where 95% of businesses are family owned, according to the Wall Street Journal. According to a survey conducted by Cedatos-Gallup International in six major cities of the country between June 10 and 11, 70% of Ecuadoreans disapprove of the capital-gains tax, while 72% disapprove of the inheritance tax.

Correa has called for a "national dialogue" regarding the projects and what social and economic model Ecuadorians want. He announced that after meeting with businessmen this week he is already proposing a modification of the new inheritance tax, reports InfoBae.

Correa is proposing that the new rate exclude working businesses that are inherited by family, as long as they are up to date on their tax payments, reports El Universal. "Inheriting a business is not the same as getting a house with a pool," he told supporters yesterday.

Over 15,000 leaders from Ecuador’s so-called “rural parish governments” were slated to hold a an assembly in support of the government yesterday, reports TeleSur.

And Correa singled out Nebot as a clear example of the progress the country has made with respect to the collection of taxes, reports TeleSur. The president observed that in 2006, before the arrival of the Correa government to power, Nebot paid just $1,994 in income taxes but by 2014 he was paying $66,593, according to figures from the government revenue agency. 

The opposition mayor admitted in an interview on CNN that he would be among the richest 2 percent of Ecuadoreans that would be impacted by the proposed inheritance tax law.  

Ecuador is facing economic difficulties in the midst of an oil revenue decline that surpasses 50 percent. Among other measures, the government cut its 2015 fiscal budget by about 4%; imposed import tariffs of between 5% and 45% for 2,800 products; and ordered wage cuts of 5% to 10% for high-level public sector employees. The government also has nationalized various private pension funds and passed a bill that eliminated mandatory state contributions to the pension system, estimated at about $1.1 billion this year, reports the Wall Street Journal.

Nonetheless, Correa emphasized his commitment to maintaining the dollar as Ecuador's national currency, saying the government will "maintain dollarization at any cost," reports InfoBae.

Correa's left-wing government has taken an estimated 1.1 million people out of poverty, according to official figures, reports TeleSur.

News Briefs

  • The Miami Herald has a four-part series on the Nicaragua Grand Canal project. Though millions of dollars of preliminary work has already begun, the 170 mile megaproject, funded by a Chinese corporation, remains cloaked in secrecy. The series has detailed graphics of the project and speaks to government authorities involved in the canal, who say the canal and its affiliated enterprises, once in full operation, would employ 200,000 people in direct and indirect jobs. The project foresees a massive free-trade zone where some 5,000 businesses would have operations in manufacturing, logistics and shipping, employing 113,000 people. All of this activity will double Nicaragua's economy, according to government proponents. But scientists worry about the potentially considerable environmental impact while activists are concerned about the people who will be displaced along the projected canal route.
  • Mexican soldiers executed half of the 22 civilians who died last year in an incident known as the Tlatlaya massacre, reports La Jornada, based on prosecutors' investigations. Five others were killed attempting to defend themselves and thereis no mention as to whether the remainder shot at police. Mexico's defense department initially said that 22 suspected members of a kidnapping gang died in a gunfight with army troops. But subsequent reports found that between eight and 15 people were executed, reports EFE. Eight soldiers who participated in the operation were detained on Sept. 25, 2014, three of whom face homicide charges and one a charge of tampering with evidence.
  • Brazil's central bank will hone its target inflation rate, reports the Wall Street Journal. While the goal will continue to be inflation of 4.5 percent, the tolerance band will be reduced to 3 and 6 percent.
  • Brazil's unemployment rate climbed for the fifth straight month this year in May, and wages fell, adding to signs of an imminent recession reports Reuters.
  • A U.S. court heard arguments yesterday that oil giant Petrobras should stand trial for a culture of bribery and corruption, a suit brought forward by investors who include British academics' pension funds, and retirement funds of state workers in Ohio, Idaho and Hawaii, reports The Guardian.
  • In an interview with the Washington Post Brazilian President Dilma Rousseff said her critics show a sexual bias. "Have you ever heard someone say that a male president puts his finger on everything? I’ve never heard that. ... I believe there is a bit of a sexual bias or a gender bias. I am described as a hard and strong woman who puts her nose in everything she’s not supposed to, and I am [said to be] surrounded by very cute men," she said.  
  • The Dominican Republic's crackdown on Haitian migrants is creating a humanitarian crisis for its neighbor, announced Haiti's Prime Minister Evans Paul yesterday. He said 14,000 people have crossed the border in less than a week, many of them should be considered Dominican citizens he says. The thousands of people include those being deported and leaving voluntarily, reports the AP. The Dominican government has said deportations will be a slow and lengthy process, with migration officials saying more than 12,000 people have left the country voluntarily.
  • The AP has a feature on Canaan, a self-built city on the outskirts of Port-au-Prince, that sprung up after the devastating 2010 earthquake. Authorities are seeking ways to improve conditions in the neighborhood, which is already the country's fourth-largest urban district and could reach a population of one million people in a decade.
  • Honduras' criminal underworld is fragmenting, after nearly a decade of relative stability. The upheaval could have important impacts on Honduras' political elite, reports InSight Crime. An investigation by El Heraldo says the country's drug trafficking groups divided the country into small fiefdoms, which operated for almost a decade with “absolute impunity,” thanks to their control of Honduras' police and military, as well as the country's political class and justice system, according to InSight. The captures and extraditions of several traffickers have opened the door to the possible prosecution of prominent Honduras politicians.
  • Paraguayan authorities are focusing on an marijuana cultivation eradication policy in order to combat the drug trade, but critics say support must be given to poor farmers who have few choices for survival, reports The Guardian.
  • Peru lacks the manpower to clamp down on illegal gold mining in the Amazon, leading to an increase in gold output from unregulated mining, reports Reuters.
  • Cuban performance artist Tania Bruguera has been confronting island authorities since December, when she tried to organize a free-speech forum in Havana's Plaza de la Revolución. Bruguera was arrested, along with more than two dozen supporters in December. Since then she has been detained four more times and has been barred from leaving the country while facing charges of disturbing the public order, resisting arrest and inciting criminal behavior, reports the Washington Post. Authorities see her as a calculated provocateur says the piece, and are using her to send a message to those "who are thinking of returning home to take advantage of new economic opportunities and easing tensions with the United States. Cuba is willing to welcome them back as entrepreneurs, sure, but not as dissident activists."
  • Argentina's Federal Chamber of Criminal Appeals confirmed a bribery case against Vice President Amado Boudou, which will send the case to trail at some point next year, reports AP. Boudou rejects the accusations and says they are politically motivated.
  • Univisión announced that it will no longer air the Miss USA pageant, ending its relationship with the Trump Organization in light of Donald Trump's recent remarks about Mexican immigrants. During his presidential announcement last week, Trump proposed building a wall along the border to keep criminals and “rapists” from sneaking into the United States, reports the New York Times.

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