No news is not always good news
Over a month has passed since the political defeat of President Daniel Noboa in the referendum, and there is a sense of a leadership void. This political setback was followed by a series of changes in the president’s cabinet and a 30-day trip that took him to the United States, the Arab Emirates, and Europe with no precise information of the purpose of these trips except his attendance at the Peace Nobel Prize ceremony in Sweden.
One development that deserves to be mentioned is the appointment of Enrique Herreria, a former constitutional judge of high profile, as legal secretary for the presidency. We applaud this nomination and hope that his presence will allow Noboa to propose changes and amendments to the constitution to help the government dynamize the economy through direct investment and enhance its fight against crime–an ongoing problem without a clear solution.
Several legal proposals sent by the executive to facilitate its work in both areas were rejected by the Constitutional Court because of technical or legal faults, despite some of them having been previously approved in the legislature. Dr. Herreria might be an ally to achieve through the Assembly what was intended to be resolved in the constitutional assembly that Ecuadorians rejected in November.
The end of this year and the beginning of the next pose new challenges for the government. The fiscal deficit by the end of this year will be close to $5 billion—a sum that is difficult to reconcile with the goals under the extension of the program with the IMF. Both Noboa and the Fund will have to work hard by the next meeting, at the end of January, to come up with a strategy to navigate a difficult 2026 and align aspirations with reality. The disbursement of $900 million from the World Bank at the beginning of December, and the coming $620 million from the IMF by the end of this month, are probably behind the drop of close to 200 bp in country risk levels since they will help the government to pay close to $500 million of domestic interest and $640 million in external amortizations.
President Noboa inherited a difficult situation on various fronts: political, economic, and security. Several crises, including the electricity crisis of last year, have reduced his popularity and credibility despite his efforts to transit the difficult road toward the country’s recovery. We still believe in his capability as president to overcome these setbacks, but we also hope to see a clearer agenda from the government for the next three years. No news is not always good news. Noboa should clearly speak to Ecuadorians in order to recover the faith of those who supported him in the previous elections.
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