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Protesters in Ecuador Demonstrate Against Correa’s Policies – The Wall Street Journal

Date: Jun 30, 2015

Thousands of protesters on Thursday took to the streets of Ecuador’s largest city, Guayaquil, to protest against the policies of President Rafael Correa,especially new tax proposals.

The Guayaquil demonstrations, led by Mayor Jaime Nebot, were part of the third week of protests against Mr. Correa’s government. On Thursday mass protests also took place in Ecuador’s capital, Quito, and in other cities.

Television stations showed images of thousands of people in Guayaquil’s main avenue, carrying city flags and signs saying things like, “No more abuse, no more taxes,” and “Ecuador is not Venezuela.”

In a fiery speech, Mr. Nebot said that Ecuador is going through a difficult time, not only politically but also ideologically, and he accused the government of dividing Ecuadoreans, following the same path of Venezuela’s government.

Mr. Nebot lashed out at what he said was a “criminal war of classes.”

“”They [the government] cannot call a class struggle. We want an Ecuador where all freedoms are respected, especially freedom of expression and to be able to progress,” Mr. Nebot said.

The protests against the government’s policies were originally organized via social-media sites but now more are also being led by political opponents, trade unions, indigenous people and social activists.

Government supporters have also held mass demonstrations, often at the same time but separated by police.

A bill to tax inheritances up to 77.5% and a 75% tax for capital gains from real estate ignited protests which included complaints about other economic policies of the government and what critics describe as President Correa’s dictatorial attitude.

Mr. Correa has said the protests are aimed at destabilizing his government, and the new tax proposals are aimed at creating greater equality.

Economists say both bills will negatively affect Ecuador’s economy and families in a country where 95% of businesses are family owned.

Last week, President Correa temporarily withdrew from the nation’s parliament the two contested bills before the visit of Pope Francis from July 6 to 8.

Protesters are demanding for the permanent shelving of both bills.

After eight years in office and in the midst of a boom period mainly based on high oil prices, the Correa government has had to resort to a series of economic measures to address a more-than-50% decline in oil revenue.

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.

“The president was used to having a lot of money in his pocket and keeping people happy,” says Juan Rivadeneira, an economist with private consulting firm Profitas. “Many measures have affected the middle class and in some cases also the poor. They hit everybody.”

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.

“The streets have become the scenario for political debate due to the government’s control of the National Assembly,” said Congressman Ramiro Aguilar.

The ruling party, Alianza Pais, controls 100 of the 137 seats in the National Assembly.

Protests against Mr. Correa’s policies are expected to continue at least until July, when trade unions will decide the date of a major strike against the government.

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