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.

Saturday, January 17, 2009

Ecuador looks to lessen impact of global crisis, 8 January, 2009

Ecuador, with a fragile economy 60% based on the sale of petrol, is suffering the effects of the international financial crisis with the fall in the price of hydrocarbons, but thanks to Rafael Correa’s government, it’s maintaining its social spending.

Due to financial gains made by the high price of petrol in the early part of last year, Ecuador can survive the current drop in fuel prices plus the cash flow provided by remittances sent by Ecuadorians from outside.

President Correa, an US educated economist, and his ministers are looking for a way out of the current crisis without interfering in the social programs put in place to ameliorate the already difficult situation of the poor, inherited by this government.

The Ecuadorian authorities have set the average price of a barrel of petrol to fifty to sixty dollars for this year, a calculation which allows a prediction of a fiscal deficit of three thousand million dollars that is no more than 3% of the Gross National Product.

Demonstrating its quick prudential disposition, the government has already designed a response to the different scenarios affected by the prices of crude, with the best, medium and worst views in mind.

The proposal is the establishment of the best alternatives to maintain economic development without discarding the search for financing from regional organizations and friendly countries.

The authorities in Quito have made clear their commitment to maintain social investment as a priority and to continue the work already in progress in strategic sectors.

The country’s budgetary spending will be centered in education, health, telecommunications, hydro electrics and petrol, as described by an official government spokesperson “the policy is not about cutting back, but about making the best use of spending.”

The main aim of the Ecuadorian government is to lessen as far as possible the impact of the global financial crisis. This has been placed in a political economic context characterized by the declaration in December of the moratorium of its foreign debt.

President Correa alleged irregularities in the contract or renegotiation of the debt, a hot subject for a country who is destined to pay 380 million dollars annually to service its external debt.

Another crucial front that the government is embroiled in is the elections, as last year the candidates for the electoral commissions were registered for the general elections April and June next.

This will be the most complex electoral process in the history of the country when the president, vice president and 130 members of the government, plus other position will be elected.

The commissions will have a place thanks to the approval of a new Constitution, put forward by Correa himself, who with his charm, openness and efforts to attenuate the social inequalities, has gained huge support amongst his people.

The Ecuadorians appreciate in the new constitution the search for an authentic democracy in the country based on an equality of rights and plenty of social advantages.

Ecuador faces a difficult year but the ideological validity and practice of its leaders means there will be no looking back at the past.

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