As Hurricane Sandy approaches the northeastern shore of the United States, Caribbean countries began cleaning up after the storm left over 60 dead throughout the region. The AP reports that 51 of the 65 deaths reported were in Haiti, where the nation’s Prime Minister declared, “This is a disaster of major proportions.” The Southern region was the worst hit, with large scale flooding causing damage to homes as well as crops. Haiti, which has been grappling with a cholera epidemic for two years, could see increased cases over the next few weeks as the rising water levels facilitate the disease’s spread. For more information on cholera in Haiti, see CEPR’s Haiti Relief and Reconstruction Watch blog. Cuba, Jamaica, the Bahamas and Puerto Rico all reported deaths as well.
The governing coalition led by President Sebastian Pinera took a hit at the polls this weekend in Chile, reports the AP. Parties from the left took roughly 43 percent of seats as compared to 37 percent for the governing right-wing alliance. The left’s largest victory was in central Santiago where Carolina Tohá, who has supported student protests for education reform, defeated the incumbent, “ultra-conservative” Pablo Zalaquett. Former president Salvador Allende’s daughter also won her first major political race, whereas Pinochet’s former intelligence director lost his 16-year hold on the mayor’s office in the upper-class district Providencia. As the BBC notes, the election was marked by low turnout. It was the first election where voting was not mandatory, and abstention was over 60 percent. For more analysis, see the Pan-American Post.
A U.S. appeals court ruled against Argentina in a long running dispute with hold-out bondholders, reports Bloomberg. Argentina appealed a lower court ruling that it must repay the vulture funds before making payments to those bondholders who accepted a restructuring. The ruling comes as a huge victory to NML Capital, a unit of billionaire Paul Singer’s Elliot Management Corp, which has spent millions lobbying against Argentina through the American Task Force Argentina. It was a surprise to many as the United States government had come down on Argentina’s side, having argued to the lower court that their ruling “could enable a single creditor to thwart the implementation of an internationally supported restructuring plan, and thereby undermine the decades of effort the United States has expended to encourage a system of cooperative resolution of sovereign debt crises.” Felix Salmon, writing on the ruling, states, “I've been writing about holdouts, or vultures, or whatever you want to call them, for a good dozen years now, and although they've had victories here and there, there's been nothing remotely as big or precedent-setting as this.”
Ecuadorian president Rafael Correa is pushing a bill that would increase the taxes charged to banks to pay for increased social welfare programs, reports Reuters. The bill, which was submitted to Congress last week, will introduce a 3 percent charge on banks’ income and scrap the exception lowering income taxes for banks to 15 percent, compared to 25 percent for others. The extra revenue would help raise the monthly payments under the government’s Human Development payment from $35 to $50 a month. As Reuters notes, Correa has pushed for significant financial reforms over the last few years, preventing banks from investing in other sectors of the economy, banning some service charges on credit cards, and allowing borrowers to default on loans by giving back the houses or cars to the banks that lent them the money. The government has also mandated that banks repatriate assets that are held abroad so that they can be more productively invested in Ecuador. Correa, who is widely expected to win another term as President in February when elections are held, has greatly increased social spending during his time in office. For more on changes to the Ecuadorian economy and the government’s social policy, see this recent paper by CEPR researchers Rebecca Ray and Sara Kozameh.
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