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Andean Group - June 2015 (ISSN 1741-4466)

POLITICS: Correa throws down the gauntlet amid protests

By his own admission, Ecuador’s President Rafael Correa was caught out by the strength of opposition to a tax reform bill he sent to the national assembly in early June. In one of his ever-more creative ways to raise extra greenbacks for threadbare state coffers amid dwindling oil revenues, Correa proposed a radical overhaul of the graded inheritance tax system, including some big hikes for the country’s wealthiest citizens. Despite Correa’s assertion that only the top 2% would feel any impact from the reform, thousands took to the streets in a nationwide protest. Correa raised the stakes by daring the political opposition to call a recall referendum on his mandate, before withdrawing the tax bill in order to pave the way for a period of “peace, joy and reflection” ahead of a visit by Pope Francis in early July. But the opposition, seizing upon and stirring up fears about the tax reform, suspects Correa’s motives and is promising no respite.

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