The political sky looks mostly blue after the first 100 days of President Guillermo Lasso’s government. His popularity has hit record highs at 75%, and the government celebrated its 100th day with over nine million Ecuadorians vaccinated, placing Ecuador as Number One in the world in vaccines applied per day.
President Lasso has issued two important decrees to boost private investment in the oil and mining sectors, although potential investors are still waiting for legal measures that need to be approved by the Assembly. He also returned Ecuador to the ISID, eliminated the capital outflow tax for the airlines industry, and the Trade Committee approved important reductions to import tariffs to improve competitiveness. Finally, Lasso fully returned freedom of speech to Ecuador by eliminating regulations that threatened it.
But dark and dangerous clouds coming from the Assembly are threatening a political storm. Pachakutik announced it will oppose any initiative coming from the Executive, and together with UNES and the Social Christians, has declared it will not approve the General Budget for 2021 that was sent last August. UNES, Pachakutik and the Social Christians sum 87 votes, or 17 more than the necessary 70 to reject the budget that could be approved by mandate of law.
This is not good news at a time when the mega "Creating Opportunities" bill and the labor reform aimed at increasing private external and domestic investment and job creation have been announced for the end of this month. Additionally, the budget for 2022, together with the proposed tax reform and the four-year planning, have to be submitted by the end of October. Those instruments are critical to secure $700 million by the end of this year and $1000 million next year under the reactivated agreement with the IMF that might be approved by the Board of Directors by the end of this month. The labor reform will not be part of the agreement but the tax reform and a new bill to improve control of money laundering will be.
The budget for 2022 could experience the same fate as the 2021 budget if it reaches the plenary. But the above-mentioned mega bill will need the 70 votes, which implies that the National Agreement group, which includes CREO and sums 25, will need the votes from Izquierda Democratica (15), the Social Christians (14) and a remaining 16 votes from the other not-so-friendly parties. The worst case scenario is that it does not make it to the plenary, as happened with the economic reactivation bill of 2019.
In any event, the end of September and beginning of October will prove to be a critical time for the fate of our nation.
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