An opportunity for President Lasso to reinvent himself
The various unsuccessful attempts to reach agreements with the Assembly are not President Lasso's only headaches. Several massacres in the jail system that have caused the deaths of over 350 inmates since 2021, and violence and insecurity on the streets – especially in Guayaquil, which now has the infamous notoriety of being among the top 10 most insecure cities in the world – as well as a Ponzi scheme among the troops and a few officers of the military, have forced Lasso to change his ministers of the interior and defense, and also to change the military dome of the three branches. A good relationship between the president and the high military ranks are essential to guarantee democracy in Ecuador. Thus, in this space too, Lasso must tread cautiously.
But solving the problems of insecurity and corruption might open paths for the president to reinvent himself. He visited Israel to conduct official bilateral meetings to discuss and coordinate Israel’s cooperation in this arena as part of a wider agenda that included entrepreneurship and innovation. In this context, Lasso was accompanied by various ministers as well as by representatives from the productive sector and authorities of the main Ecuadorian universities. He opened a permanent office for innovation that will facilitate the exchange between the two nations in this area which, if successful, could help to increase private investment and employment.
If quick and tangible results surge from this visit, Lasso might recover lost confidence from the people, boosting his popularity and opening a way for a successful referendum or other constitutional tools needed to make structural changes that would otherwise face the opposition from the Assembly. Hence, Ecuadorians are waiting with hope for positive results from the conversations with China and from the above meetings with Israel.
In the meanwhile, the fourth and fifth reviews of the IMF program finally ended with a technical agreement that awaits the approval from the Fund’s Board of Directors before bringing another $1,000 million to the fiscal coffers. This disbursement, together with record tax collections of $5667 and significantly higher tax revenues in Q1 2022 should allow the government to increase public investment to boost employment without jeopardizing prudent fiscal management.
But the higher GDP growth in 2021, high tax and oil revenues, and an increase in banking deposits and credit do not correlate with the disappointing labor indicators, which as of March 2022 still show 68% of Ecuadorians without an adequate job. All efforts to improve this situation will guarantee a more stable democracy and economic performance. Thus, our best wishes for successful outcomes from the above-mentioned initiatives.
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