Power was absolute, but not everlasting
Political events have evolved with amazing speed in Ecuador since May 2017, when President Moreno took office. The new president has managed to dismantle the almighty power structure of former President Correa, who finished as the “head of all powers” (as he referred to himself), dominating executive, legislative and judicial institutions. Last week the head of the Judicial Council, Gustavo Jalkh, and all the members of the Council were dismissed from office by the Citizens’ and Social Control Council. Jalkh was a close collaborator of Correa, and the Judicial Council was a critical piece of Correa’s strategy to control justice in Ecuador. Jahlk and the other members were accused of not fulfilling their jobs according to their Constitutional mandate and of allowing interference by the Executive in the judicial system.
Also, last week the judge in charge of the case of kidnapping of Fernando Balda – a former legislator – decided to try several officers from the past government, including President Correa himself, on criminal charges of kidnapping. However, the judge requested permission from the Assembly to try Correa. Yesterday afternoon, 83 legislators gave the green light for this trial. It appears that Correa, who faces neither charges of corruption (even though his vice president is in jail), nor charges of illegally managing public finances (despite the responsibilities stated in the debt report from the Comptroller General), could face criminal charges that are closer to the mob than to a former president. Hard Correistas at the Assembly, together with other Correa supporters, demonstrated in front of the Assembly, and according to their version, were brutally repressed by the police.
Amidst this turmoil, legislators are debating the economic bill, and a final approval is due by June 21. The law helps increase revenues by approximately $600 million for the 2018 budget by allowing a one-time tax remission, and at the same time limits the primary deficit, which by 2021 is expected to reach 0% of GDP. Transitory regulations allow further financing for this year up to the $10,000 million approved by the Assembly last November. Additionally, Minister Martinez is proposing a bold expenditure cut that will bring the overall balance to -3.9% of GDP instead of the expected -8% without the adjustments, while the primary deficit would drop from 5.2% to 1% of GDP.
These proposed changes will allow for more sustainable fiscal accounts, and together with the approval of the above-mentioned bill might open the door to an IMF loan to help the balance of payments, which, without additional external debt, will take a difficult turn.
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