Ecuador begins the lasso era with upcoming social and economic challenges

Conservative Guillermo Lasso will take command in Ecuador this Monday, with the aim that the emergency sparked by the pandemic does not overshadow other upcoming challenges, both socio-economic and political. It must do this hand in hand with a fragmented National Assembly that will force it to negotiate in order to achieve a minimum of political stability.

Lasso defeated Andrés Arauz, the political heir of former President Rafael Correa and winner of the first round, in the second round on April 11th. However, the correct represented by the Unión por la Esperanza (UNES) is the party with the most seats in the assembly, in which the indigenous movement of the Pachakutik has also gained strength.

The new president has been raising his hand to his political rivals over the past few months, realizing that without them he will not be able to carry out the most important reforms the country may need to face the various challenges facing them it faces. “An economic crisis, a health crisis, a moral and ethical crisis and a security crisis,” Lasso declared himself after his victory.

Ecuador begins the lasso era with upcoming social and economic challenges
Ecuador begins the lasso era with upcoming social and economic challenges

UNDP representative in Ecuador, Matilde Mordt, said in an interview with Europa Press that the country is facing “major challenges” that are to some extent “shared” by the entire region, although she acknowledges that “challenge.” Number zero “is to contain the coronavirus pandemic and the advancement of the vaccination campaign.

Lasso made speeding up vaccines one of his big campaign promises, which is why he has liaised with corporations and governments to help defeat a virus that temporarily pushed Ecuador to its borders. The South American country accumulates more than 415,000 cases of COVID-19 and more than 14,600 deaths.

On the economic front, one of the reasons the president-elect was optimistic was that recent negotiations on foreign debt prevent it from looming like a sword of Damocles, and there are no major due dates in the years to come. He is confident that he can clear the budget deficit in four years, although the medium-term effects of a pandemic that caused GDP to collapse by 7.8 percent in 2020 remain to be seen.

Regarding taxes, he has promised not to increase them and in some cases even to reduce or eliminate them. Mordt stresses that any future tax reform should be “redistributive” in order to distribute the tax burden and avoid possible scenarios of discontent, as seen in Colombia in recent weeks due to a plan put forward by Ivan Duque’s government.

The UNDP representative also advocates using the “opportunity” that arises from the post-pandemic recovery to propose more sustainable development, for example to tackle an environmental crisis that she believes is “paid little attention”, although the Ecuadorian authorities and the United Nations would work together in various areas with specific programs in key sectors such as fisheries, which employ around 300,000 people.

In terms of employment, despite the pandemic, unemployment rates remain relatively low – around 5 percent – but the UNDP recalls the data “hidden” below, such as the “enormous” informality that exists at the work level and poor quality employment since then Only three out of ten people have what is known as an “adequate” job, ie 40 hours and a salary higher than the base salary.

Mordt recalls that Latin America is “the most unequal region in the world” and Ecuador is no exception. The Gini coefficient, which measures inequality, has deteriorated to 0.500 in 2020 – only half between the two extremes – although there are differences between urban and rural settings where the data are worst.

The incidence of income poverty in rural areas is 47.9 percent, while in urban areas it is around 25.1 percent at the end of 2020, according to official figures, reflecting the collateral damage from the pandemic. Income poverty has risen by more than seven points to 32.4 percent, while in extreme cases it is almost 15 percent across the country.

“In the past we have had poverty rates that have not fallen,” says the head of UNDP, who calls for the adoption of specific programs for some of the most affected groups such as young people, women and indigenous peoples. It is also pointed out that the emergency bonds promoted during the pandemic “do not reach the poorest of the poorest”, where only 33 percent would be covered.

During his term of office, Lasso will face the latent discontent of a population that feels that public services are not coming to an end and that distrust institutions marked by years of bad practices. “Reinforced institutions, more dialogue and agreements are needed to promote social cohesion,” stressed Mordt.

The “governance crisis” affecting the region, in the case of Ecuador, has resulted in the addition of the coexistence of executive and legislative powers, which are forced to coexist in a scenario that the UNDP representative predicts as “complex”, but that has to be negotiated. “Topic by topic” to ensure a minimum of stability.

The President-elect of Ecuador has also included the fight against corruption in its main lines of government, a scourge that “has in some ways undermined the social contract” and has played against a context where “there is a need to strengthen” institutions “in the words of Mondt.

The United Nations has already held talks with the new government to assist them on transparency and the fight against corruption, and Lasso has promised a code of ethics for civil servants to send a clear signal to both members of the public administration and a citizenry, which strives for a minimum of institutional cleaning.

Similar Posts