As Ecuador struggles to organize reconstruction efforts following a devastating 7.8 magnitude earthquake that was felt nationwide earlier this month, socialist President Rafael Correa has announced forced salary contributions from the nation’s middle class and a major tax spike.
The new economic measures, he argues, are necessary to refill government coffers and pay for rescue and reconstruction, as well as to offset money lost in tourist revenue that will no longer come in from Ecuador’s coastal towns devastated by the earthquake.
In a speech broadcast nationwide on Saturday, Correa announced that all Ecuadorians who are making more than $1,000 monthly will be forced to pay the government a day’s salary. Those making double that will be forced to pay a daily salary for two months and so on, up to those making $5,000 a month, who will contribute five days’ salary within five months. Ecuadorians who own more than $1 million in personal assets will be forced to give the government 0.9 percent of their net worth.
In addition, Correa will be imposing a 2 percent increase in the nation’s value-added tax throughout the year.
In his speech, Correa emphasized the need for promoting tourism in the country. “Tourism cannot be affected,” he argued, “we have a very focused impact [from the earthquake], but the rest of the beaches in Santa Elena, Guayas, El Oro, are as beautiful as ever; Quito [the capital], Cuenca, our Amazon, Galápagos, our national parks, our natural beauty [as well].”
The effect these measures will have on victims of the earthquake — or those who survived but have relatives in hard-hit areas — remains to be seen. At least one economist, Universidad Eafit expert Óscar Eduardo Medina, has weighed in, suggesting that the move will be “efficient” for lining the pockets of government officials but may trigger undue inflation.
The official death toll of the earthquake last week is currently at 654, with over 26,000 people living in shelters after their homes were destroyed. At least 58 people remain missing, suggesting the death toll could rise. Survivors affected, those working on the ground warn, are having trouble finding food and water, and roads into the most affected areas are mostly destroyed.
Correa hopes a strong response to the earthquake will boost his popularity following criticism for his behavior immediately after the earthquake. Correa, who was visiting Pope Francis at the Vatican during the earthquake strike, returned home immediately, with his office releasing footage of him touring affected areas touting his “work, coordination, and leadership,” propaganda which triggered wide rebuke, particularly on Twitter.
Correa was also caught on video losing his temper with earthquake victims in the city of Bahía de Caráquez. There, upon being swarmed by desperate earthquake victims asking for help, Correa can be heard saying in the video, “Nobody lose calm, nobody yell or I will arrest you, whether you are old, young, male, or female. Nobody cry or complain.”