According to reports released October 10, 2021, the Presidents of both Chile and Ecuador will be investigated by their governments for their use of tax havens which were revealed by the Pandora Papers. The loss of credibility suffered by both Ecuadorian President Guillermo and Chilean President Sebastian Pinera are sure to have major political consequences for both nations in the near term.
The fall of Ecuadorian President Guillermo Lasso will have a major impact on his country, which is struggling to attract foreign investors and boost its stagnated economy. Less than two weeks ago, Lasso proposed an economic reform package which would significantly raise taxes and alter relatively popular labor regulations. Although the plan would raise $700 million in state revenue, thus improving state services, the proposition has been met with stringent protests and large demonstrations from the Ecuadorian people.
The announcement that President Lasso was utilizing questionable, albeit legal, tax evasion practices has thrown his already unpopular approval rating into the gutter. The Intelligence Ledger assesses that Lasso's political party, the Creating Opportunities Party, will lose a significant amount of support, thus causing his governing coalition to fall apart. Not only will this stagnate his presidency, but potentially the country's economy as a whole.
Chilean President Sebastian Pinera has held onto his presidency thanks to a strong center-right coalition. With elections looming in November, it is difficult to imagine a worse time for this scandal to break in the eyes of Pinera. It is not unlikely that the elections will see the rise of extremist candidates such as leftist Gabriel Boric and right-wing Jose Antonio Kast.