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Damage from looting in Mexico after Hurricane Otis could reach $22 million

Basic items have disappeared from store shelves in Acapulco, leaving victims of the monster storm dependent on supplies arriving at special collection centers

desabasto en acapulco
A man searches for food inside an Acapulco supermarket that was looted after the hurricane, on October 27.Mónica González Islas
Karina Suárez

“There is still anxiety in Acapulco,” says Alfonso Pérez, 55. This yoga teacher has spent the last seven days trying to help the victims of Hurricane Otis in the Mexican state of Guerrero. Drinking water comes and goes, as does electricity and internet service. The gasoline supply has been restored in dribs and drabs. “There is no place to buy things, there is no store that can sell you something, everything is closed and in the Costa Azul area everything was looted,” he says by phone. Without options to buy groceries, hurricane victims are reliant on the food supplies that arrive at collection centers.

The expansive wave of damage caused by the passage of Hurricane Otis has also left million-dollar losses in businesses, department stores and appliance stores due to subsequent looting and acts of vandalism. The National Association of Self-Service and Department Stores (Antad) has offered a preliminary estimate of the losses caused by looting and vandalism at sale points, which it placed at up to 390 million pesos (close to $22 million).

The government of Andrés Manuel López Obrador on Wednesday announced a reconstruction plan that contemplates tax exemptions, social aid, credit lines and the delivery of household appliances and food supplies for the thousands of victims in the area. The Secretary of Finance, Rogelio Ramírez de la O, said the initiative will cost 61,3 billion pesos ($3.4 billion). “We have the budget to finance all these needs, these programs, fortunately we have healthy public finances,” said the president during his regular morning news conference.

Volunteers sort donations for people affected by Hurricane Otis at the Estadio Olimpico Universitario in Mexico City, on October 26, 2023.
Volunteers sort donations for people affected by Hurricane Otis at the Estadio Olimpico Universitario in Mexico City, on October 26, 2023. TOYA SARNO JORDAN (REUTERS)

The Antad association has asked authorities to reinforce security and take the necessary measures to prevent further looting and acts of vandalism in Acapulco, a seaside resort popular with tourists. “We condemn the acts of plunder by the population, nothing justifies it,” Antad said in a statement. The association added that the priority now must be to guarantee that groceries as well as hygiene and health products reach their destination, while avoiding theft by criminal groups.

Manuel Cardona, director of Government Relations at Antad, told the local media that out of the 135 stores that operate on the coast of the state of Guerrero, at least 73 sale points reported structural damage from the hurricane as well as damage from looting.

Other big players like Walmart have also posted losses. In an interview for Radio Formula, the senior vice president of Corporate Affairs at Walmart Mexico and Central America stated that of the 50 stores they had in Guerrero, 23 had significant losses from both causes. According to the company, in two weeks they will be able to open at least three department stores.

People outside a department store in Acapulco, on October 27.
People outside a department store in Acapulco, on October 27.Mónica González Islas

The hurricane also caused damage to the small business fabric. The National Alliance of Small Business Operators reported that Otis caused large losses for the more than 16,000 small businesses that operate in Acapulco and its surrounding areas, leaving them out of stock. “Small businesses are experiencing difficult times. Otis is the most destructive hurricane in the recent history of the country, and it has exposed the state of vulnerability in which we Mexicans live by not having a deep-rooted culture of prevention,” said Cuauhtémoc Rivera, president of the organization.

Enki Research, a risk analysis firm specializing in natural disasters, has estimated the economic losses due to the recent hurricane at $15 billion. Otis produced wind speeds of 165 mph (265 km/h) that intensified with unexpected velocity, destroying bridges, power lines, businesses, homes, and banks. Acapulco, one of the jewels of the Mexican Pacific, now seems like a setting for a post-apocalyptic movie.

Mexico’s Secretary of Tourism, Miguel Torruco, said on Monday that the cost of reconstruction in Guerrero would be announced no later than next week. The official assured that 12,500 tourists received assistance to leave Acapulco, of which 98% were nationals and the rest foreigners.

Treasury promises tax aid to victims

The Office of the Secretary of Finance and Public Credit (SHCP) will offer fiscal incentives to taxpayers affected by Hurricane Otis to accelerate the reconstruction and rehabilitation of Acapulco. Individuals or legal entities will be able to claim 100% deductions on the purchase of fixed asset goods intended for reconstruction, rehabilitation, or replacement in areas affected by the hurricane, if they are acquired from October to December 2023.

Individuals whose homes are located in areas damaged by Otis and who pay income tax will not have to pay any additional amount on donations or financial support they may receive from legal entities or trusts for reconstruction purposes. Taxpayers who have their tax domicile in the affected areas may break up their payments on added value tax and IEPS (a tax on products deemed harmful to one’s health, such as alcohol and junk food), and employers will also be able to break up their employee-related taxes.

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