Alberto Dahik: “Oil is not the cause of the crisis, but public spending”

Former Vice President Alberto Dahik attributed the crisis in the Ecuadorian economy to the economic model and the pressure on public spending. While he said that low oil prices is the trigger for the deep crisis we are living, along with a set of measures such as 5% tax, the lack of foreign investment, excessive public spending, safeguards.”

For Dahik this is good news, because if oil is not the cause of the crisis but the economic policy, this can be changed and take the country forward.

Dahik was clear. For the severity of the crisis, for the drop of liquidity there is not enough speed in measurements or responses to be given. “Only Russia, Ecuador and Venezuela, are the only oil countries that will not grow in 2016, according to projections from the International Monetary Fund, while all other countries will grow. We’re doing something wrong.”

He said that the problem of the balance of payments is the pressure of public spending. “And the most obvious proof that low oil pricesare not cause of the crisis, is that much before the price of oil fell and the regulations left by the original dollarizers had changed to dramatically lower the liquidity of international monetary reserves, because the pressure exerted by public spending consumed the reserves. Because long before oil dropped the Government resorted to the Central Bank of Ecuador, revalued the gold and took that liquidity from the Central Bank, which is not a right thing, because it should have sold the gold of monetary reserves before taking the money…”