Tag Archives: Ecuador

Ecuador to hike taxes, sell assets to fund quake rebuilding

Aerial view of Pedernales, after an earthquake struck off Ecuador's Pacific coast

By Ana Isabel Martinez and Diego Oré

PEDERNALES/QUITO, Ecuador (Reuters) – Ecuador will temporarily increase some taxes, sell assets, and may issue new bonds on the international market to fund a multi-billion dollar reconstruction after a devastating 7.8 magnitude quake, a somber President Rafael Correa said on Wednesday.

The death toll from Ecuador’s weekend earthquake neared 600 and rescue missions ebbed as the traumatized Andean nation braced itself for long and costly rebuilding.

“It’s hard to imagine the magnitude of the tragedy. Every time we visit a place, there are more problems,” Correa said, fresh from touring the disaster zone.

The leftist leader estimated the disaster had inflicted $2 billion to $3 billion of damage and could knock 2 to 3 percentage points off growth, meaning the economy will almost certainly shrink this year. Lower oil revenue had already left the poor nation of 16 million people facing near-zero growth and lower investment.

In addition to $600 million in credit from multilateral lenders, Correa, an economist, announced a raft of measures to help repair homes, roads, and bridges along the devastated Pacific Coast.

“We’re looking at the possibility of issuing bonds on the international market,” he said on Wednesday afternoon, without providing details.

Ecuador had been saying before the quake that current high yields would make it too expensive to issue debt. Yields on its bonds are close to 11 percentage points higher than comparable U.S. Treasury debt, according to JPMorgan data, and creditors are likely to be wary after the quake.

Correa’s government in 2008 defaulted on debt with a similar yield, calling the value unfair. His government has since returned to Wall Street and Ecuador currently has some $3.5 billion worth of bonds in circulation.

In a nationally televised address later on Wednesday, Correa also announced the OPEC nation was poised to shed assets.

“The country has many assets thanks to investment over all these years and we will seek to sell some of them to overcome these difficult moments,” he said.

He also unveiled several short-term tax changes, including a 2-point increase in the Valued Added Tax for a year, as well as a “one-off 3 percent additional contribution on profits,” although the fine print was not immediately clear.

The VAT tax is currently 12 percent.

Additionally, a one-off tax of 0.9 percent will be imposed on people with wealth of over $1 million. Ecuadoreans will also be asked to contribute one day of salary, calculated on a sliding scale based on income.

‘FOOD, PLEASE’

Briefly pausing talk of reconstruction and hindering rescuers, another quake, of 6.2 magnitude, shook the coast before dawn on Wednesday, terrifying survivors.

“You can’t imagine what a fright it was. ‘Not again!’ I thought,” said Maria Quinones in Pedernales town, which bore the brunt of Saturday’s disaster.

That quake, the worst in decades, killed 570 people, injured 7,000 others, damaged close to 2,000 buildings, and forced over 24,000 survivors to seek refuge in shelters, according to government tallies.

Four days on, some isolated communities struggled without water, power or transport, as torn-up roads stymied deliveries. Along the coast, stadiums served as morgues and aid distribution centers.

“I’m waiting for medicines, diapers for my grandson, we’re lacking everything,” said Ruth Quiroz, 49, as she waited in an hour-long line in front of a makeshift pharmacy set up at the Pedernales stadium.

On a highway outside the town, some children sat holding placards saying: “Food, please.”

When a truck arrived to deliver water to the small town of San Jacinto, hungry residents surrounded the vehicle and hit it as they yelled: “We want food!”

Scores of foreign aid workers and experts have arrived in the aftermath of Saturday’s disaster and about 14,000 security personnel have kept order, with only sporadic looting reported. But rescuers were losing hope of finding anyone alive even as relatives of the missing begged them to keep looking.

Speaking from the highland capital, Quito, Correa said the death toll would likely rise further, although at a slower rate than in previous days. “May these tears fertilize the soil of the future,” he said.

(Additional reporting by Alexandra Valencia and Diego Ore in Quito, Brian Ellsworth in Caracas; Writing by Andrew Cawthorne and Alexandra Ulmer; Editing by Tom Brown, Peter Cooney and Michael Perry)

Trapped Ecuador survivors searching for hope

Red Cross members, military and police officers work at a collapsed area after an earthquake struck off the Pacific coast, at Tarqui neighborhood in Manta

By Julia Symmes Cobb

PEDERNALES, Ecuador (Reuters) – During a terrifying five hours trapped in the rubble of her own restaurant, Filerma Rayo almost lost hope.

“I was yelling and yelling and then, at the end, I started to think I would die there,” said Rayo, 33, as she nursed a crushed foot, pinned by a falling piece of cement when a 7.8 magnitude earthquake shook Ecuador on Saturday.

The Andean nation’s worst quake in a decade killed more than 270 people, injured another 2,000, flattened buildings and tore apart roads along the Pacific coast.

“It was my siblings who saved us, the rescue teams hadn’t arrived yet,” said Rayo, who runs a restaurant on the bottom floor of a now-shattered hotel in the worst-hit town of Pedernales, a rustic beach location on the Pacific coast.

Her three brothers and sisters, also from Pedernales, came looking for Rayo and her husband, who suffered head injuries, after the quake. Guided by her shouts, they managed to remove the rubble and pull her out around midnight, well before emergency crews arrived.

Nearly 100 neighbours in Pedernales were not so lucky.

They died when the earthquake struck, sending pastel top floors crashing to the ground, punching holes in the façade of the church on the main square and obliterating a local hotel, its roof jack-knifed and crumbling.

Many residents, including Rayo and her family, spent a restless Sunday night sleeping outside on mattresses in the muggy tropical night, wary of aftershocks.

CORPSES IN STADIUM

Others, too uneasy to sleep, watched from the sidelines as firefighters continued rescue operations in some buildings, calling for silence so they could listen for cries for help.

More than 600 people were treated for injuries at tents in the town’s still-intact football stadium, or were transported by ambulance or helicopter to regional hospitals.

Most of the corpses recovered were taken to the stadium and laid out under tents. Only four of 91 had not been identified by families. Wakes and burials were being quickly arranged.

Queues for supplies like bottled water, blankets and food snaked along the stadium walls, as government and Red Cross workers rushed with aid supplies to the lush, hilly zone next to Pacific beaches.

Residents complained that a lack of electricity was keeping them from using mobile phones to contact loved ones.

Many lost all their possessions.

“There’s nothing left of the houses and nowhere safe to stay,” said housewife Betty Reyna, 44, who was keeping watch over a dozen members of her family as they slept under a gas station awning early on Monday.

Reyna, her daughter and son had travelled from the capital Quito in search of relatives when they heard about the destruction in her hometown.

They were able to find some family members but Reyna had still not seen her parents or other daughter, though she had made contact with them and knew they were largely unharmed. Her father, however, had suffered head injuries.

“We’re taking everyone back to Quito as soon as we can, at least until things calm down here.”

More than 1,000 policemen, brought in to guarantee calm, patrolled Pedernales’ streets ahead of an expected visit by President Rafael Correa.

Rayo hopes she and her neighbours will get the support they need to rebuild their homes and businesses in the long term, but her immediate request is simple.

“We need everything,” she said. “I couldn’t even get pain medication at the medical tent.”

(Editing by Andrew Cawthorne and Bernadette Baum)

Ecuador’s President To Resign If Abortion Made Legal

The president of Ecuador said he will resign his office if the National Assembly makes abortion legal.

The Assembly is in the process of reforming the nation’s Penal Code. He said that some members of his own governing alliance is pushing to make abortion legal.

“They can do whatever they want. I will never approve the decriminalization of abortion,” President Rafael Correa said.

Correa was first elected in 2007 and re-elected to a third term in February. He is considered a far-left wing leader who is extremely critical of the United States and other western nations. He has given asylum to Wikileaks founder Julian Assange and has offered it to accused U.S. cyberterrorist Edward Snowden.

“Where do we say we should decriminalize abortion? On the contrary, our constitution pledges to defend life from the moment of conception,” Correa said on state TV.