After much hesitation, the government reached an extended fund facility for $4.2 billion with the IMF, which according to President Moreno´s statement, will open the door to $6.0 billion from the World Bank, the IDB, CAF, the European Investment Bank, FLAR and the French Development Agency. This is less than half of what Ecuador could receive from the IMF, which is close to $11b, and we are waiting to hear from the aforementioned institutions on their conditions for providing this financing.
The $4.2b will be disbursed in three years and will help stabilize the international reserves and liquidity protecting dollarization. Although the conditions have not been made public, and the agreement must still be approved by the IMF authorities, it is expected that it will contemplate short-term adjustments as well as longer-term structural changes.
Ecuador has not fully honored 13 of the 18 agreements signed in the past. Even though the fiscal goals were mostly achieved, governments failed to honor commitments on structural reforms.
The productive sector, as well as many Ecuadorians have demanded stronger, deeper and clearer action in the economic arena from Moreno and received this agreement with relief. But the president will have to face unions and leftist social groups that have already announced their intention to protest. We hope that Moreno exercises the necessary leadership to reach an ample consensus to carry out adjustments that are difficult and will be painful for the present generation – not an easy task when his level of support reaches just 35%.
This week Moreno also announced that an international “commission against corruption” will come to Ecuador to assess, question, resolve and support investigations and bring to justice the largest cases of corruption involving top authorities from the past government. The announcement was made just when a journalist’s research revealed that Moreno´s brother has a company in Belize, one of the so-called “tax haven” countries.
Local government elections will take place on March 24. The campaigns have picked up over the last two weeks but the general pessimism affecting Ecuadorians has not dissipated – instead it has increased because of the ridiculous number of candidates. In fact, there are 77,000 candidates, who massively promise to eradicate corruption from the public sector.
Polls have not been widely published but we will be attentive to the results of List 5, which is the list supported by Correa, as there are rumors that the lower classes, tired of the government’s inaction in improving economic conditions, are starting to miss the charismatic Correa.
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