The document will be delivered to the President next week. In those days the National Assembly will receive the economic law. More than $ 100 million were released for late payments.
On Monday, May 21, the newly inaugurated Economy Minister, Richard Martinez, will deliver to the President of the Republic, Lenin Moreno, a proposal to repeal Executive Decree 1218, an instrument created by the previous government with which he changed the methodology for measuring public debt
In the special examination of public debt management, between January 1, 2012 and May 24, 2017, the Comptroller General of the State concluded that using that decree, signed by former President Rafael Correa, “lowered artificially “the level of indebtedness when it was close to the legal limit allowed (40% of GDP).
In this regard, the control body recommended the Ministry of Finance to prepare a project to repeal the current document from October 20, 2016. With this, the measurement of the debt against the Gross Domestic Product (GDP) will stop considering only the debt consolidated (which excludes internal obligations).
Martinez, who on Thursday, May 17, gave his first interview as Minister to Ecuavisa, said that until Friday, May 18, eight of the 18 audit recommendations will be evacuated. The others will be dispatched in the following days.
The Comptroller General also pointed out that any indebtedness not included in the fiscal budget for 2018 must be met according to the Public Finance Planning Code (Coplafip), in order to “gradually adjust” the debt.
In other words, the Government will be able to execute the approved financing for about $ 8,300 million. “This year allows us to act without any inconvenience (…) if more is needed, because we have to proceed as determined by law and request authorization from the Assembly,” explained Martinez.
The long-awaited law that will make the economic program viable will be ready before May 24 “with issues that are generated to restore competitiveness to the productive sector.” It will include a reform to replace the debt ceiling with new macro-fiscal rules.
“The important thing is not the weight of the debt on the GDP, but the ability to pay that the country has. Nor can it be left extremely open for later irresponsible use. ”
Until January 2018, according to the Ministry of Finance, consolidated debt stood at 34.3% in relation to GDP ($ 35,709 million). The figures have not been updated since then, so Martinez ordered their immediate publication, as well as all the recommendations of the Comptroller.
In other actions, the official ordered the transfer of more than $ 100 million of repressed payments and that correspond to vulnerable groups, elderly people, children’s programs, and provision of goods and services. It also established a payment plan, “emergent armed”, to cover pending compensation to retired public servants.
The disbursements must be completed until the end of May or maximum in the first days of June. Reiterating his commitment to make the situation of the national economy transparent, Martínez prepares a detailed report on the current conditions of the country, which will be exposed to Moreno.
Based on this diagnosis, he will reveal his strategies, framed in a structured fiscal programming. He was asked about the Government’s intention to raise the tariff ceilings to 375 subheadings, to which he replied that all the issues are evaluated.
While he served as president of the Ecuadorian Business Committee, between 2015 and 2018, Martínez was critical of this proposal and other similar measures, considering them barriers to trade.
Reforms of Coplafip
One of the recommendations of the special examination of the public debt provides the Ministry of Finance to reform Coplafip and its regulations, since it repealed norms that clearly prevented the composition of indebtedness.
3 ministerial resolutions of 2010 on the secrecy and reserve of the debt must be suppressed.
The Comptroller’s Office also recommended including pre-sale oil contracts in outstanding debt balances. (I)