Hope due to the partial end of blackouts
President Noboa offered to end the electricity blackouts by December 20, to the joy of almost all Ecuadorians, who have endured harsh day-to-day circumstances since last September. However, the six major electricity-consuming corporations, including steel manufacturers, mining companies and Petroecuador, do not share the people's happiness. The presidential offer summarized the factors that will contribute to cover the electricity deficit, but it was obvious they did not add up to complete the missing 1800 MW. Thus, the above-mentioned corporations will be totally disconnected from the national electric system from December 16 to January 5, to save around 300 MW.
This bold decision is another blow costing around $100 million to sectors that already have losses of around $4b due to the three months of scarce electricity service. Representatives from those companies have not been subtle in labeling the decision as electoral, and it might be. However, it is also true that small businesses, education, and individuals have endured hard times, with far fewer resources to cope with the problem than the large companies.
In tax-related issues, the temporary bill that allowed the government to collect anticipated tax payments from corporations ends this December. Corporate self-retentions have contributed roughly $1700 million to the General Government Budget this year. Thus, if the government does not extend the measure for 2025, the deficit could increase next year by at least a similar amount.
Even though President Noboa's popularity and support have been declining because of the blackouts, as well as because of the continuing violence and insecurity, a recent poll from Informe Confidencial shows him leading next year election’s voter intentions at 32%, followed by Luisa Gonzalez from Revolucion Ciudadana, at 30%. The recent past failures of polls to accurately predict the outcomes of elections make us cautious in assessing the outcome of the first round. But we, too, think the most probable scenario places Noboa and Gonzalez in the second round. In past elections, the Correistas led the polls by at least 10% over the second runner-up, winning the first round only to lose in the second round. Therefore, this poll shows an apparent change in voter sentiment.
As we have assessed before, unless either candidate wins the election in the first round and secures a large majority in the Assembly, he or she will face serious challenges when trying to form alliances, which can be difficult, temporary, and fragile. This will be especially true next year, when the number of legislators will increase from 132 to 151: a simple majority will require 80 instead of 70 votes, and an absolute majority will demand at least 104 votes instead of 91.
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