The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Wednesday, January 16, 2008

Ecuador's Correa Vows to Restructure Finances, Administration

By Stephan Kueffner

Jan. 15 (Bloomberg) -- Ecuadorean President Rafael Correa said he wants to reorganize the country's administration and finances to reduce inequalities and fight corruption.

Creating seven regional administrations beyond the Quito and Guayaquil metropolitan areas and taking away budget earmarks for specific causes will decentralize the Andean country and reduce government waste, he said today.

``We know this will meet the resistance of vested interests,'' Correa, 44, said in a speech to the constitutional assembly marking his first anniversary in power.

Correa said plans to build new hydroelectric plants and improve the country's highways would reduce lop-sided income distribution and poverty. Wearing a white shirt embroidered with indigenous symbols, Correa toned down his usual criticism of the private sector, political adversaries, and the media.

``There was less rhetoric than on other occasions,'' opposition assemblyman Pablo Lucio Paredes said in an interview. ``The speech was centered on facts -- exaggerated, true, or untrue -- leaving less room for attacks.''

Paredes, a member of the Future Now political movement, said that Correa's occasional criticism of business revealed that the president still fails to see what Ecuador needs to develop its economy.

Correa said he wants future budgets to contain earmarks only for local governments and universities. Pre-set spending allocations for items such as irrigation projects or funds for development agencies promote corruption and limit the government's ability to prioritize spending, he said.

Municipal Government

Municipal governments are currently guaranteed 15 percent of the country's income. Correa said he would maintain that funding level and ensure that local officials would get funds electronically, rather than having to ask the Finance Ministry.

Ecuador's 24 provinces would continue to function below the nine regional administrations he proposed.

Creating regions with clearly defined administrative powers would limit the influence of the bureaucracy in Quito, the capital, said Maria Paula Romo, a member of Correa's Alianza Pais party.

``Right now, getting a legalized copy of a high school degree demands a trip to Quito,'' she said in an interview after Correa's speech. Correa needs the assembly's approval to create the regions, she added.

Spending on hydropower projects and roads will help integrate Ecuador and reduce its reliance on imported refined fuels and electricity, Correa also said.

Electricity Projects

He pledged to start construction of four major hydroelectric projects in the first four months of this year, and invest $1.5 billion in roadway construction in 2008, affecting 28 percent of Ecuador's road network. With the completion of planned power plants, Ecuador could become self- sufficient in electricity by 2013, he said.

Correa said that social spending last year for the first time in decades topped servicing of international debt.

``Social spending will take priority over payments to financial speculators,'' Correa said today.

Correa, who calls himself a friend of Venezuelan President Hugo Chavez, has previously said Ecuador won't pay back ``illegitimate'' debt. The Andean country has made interest payments during his term.

The country's benchmark 10 percent note due in 2030 rose 0.1 cent yesterday to 97.9 cents on the dollar, yielding 10.2 percent.

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