They spent what they did not have and they indebted the government until they suffocated it,” Economy Minister Richard Martinez said from the Carondelet palace, along with Labor Minister Raúl Ledesma and the private secretary of the President, Juan Sebastián Roldán.
In addition to the 25% increase in Extra and Ecopaís gasolines, which represents 37 cents per gallon, to alleviate the economic difficulties facing Ecuador, the government also decided to eliminate jobs in the public sector that were vacant and lower the salary of ministers and other high-level officials.
“It has been decided to eliminate a total of 25,000 vacancies, which represents a saving for Ecuadorians of more than 400 million dollars,” said Labor Minister Raul Ledesma. Vacancies are unoccupied posts, which could be, but will not be filled according to the principle of efficiency.
Ledesma said that in the adjustment carried out by the government, it was reduced from 30 to 4 advisers per ministry, with some exceptions, reducing the number of advisors that the Executive had 3 times.
The salary of the ministers will be reduced by 10% “to set an example of how the sacrifice must necessarily start at home,” the official said. Public sector employees whose salary is higher than $ 2,368 will also suffer a 5% cut, in addition to a 10% reduction in a previous economic measure, in August 2017.
According to Juan Sebastián Roldán, the president’s private secretary, the measures are intended to “protect” the dollarization and ensure the payment of pensions to retirees.
This is the third economic adjustment presented by Moreno in 2018. The first occurred in April, when the government announced a temporary increase in tariffs on imports and the elimination of ministries and unprofitable public enterprises.
The second occurred in August when he informed the plan of targeting of subsidies and the elimination of ministries to optimize resources.
Finance Minister Richard Martinez said at a press conference that “we have decided to put an end to this kind of absurdities such as subsidies” that in the future would prevent paying teachers and doctors from the public sector who care for the poorest citizens. He stressed that this measure frees fiscal money for “the construction of schools, hospitals and social infrastructure” which is expected to raise about 613 million dollars.
Proforma with deficit
The fiscal box registered this year a deficit of around 8,000 million dollars, forcing the government to issue state bonds and acquire new debt (only last week Ecuador received a credit of 900 million dollars for the cash of China).
The analyst of the Fiscal Policy Observatory, Jaime Carrera, told The Associated Press that the government’s decision “is in the right direction, the high fiscal deficit requires measures to generate revenue for the public sector … although it is still insufficient and the Government would have to do something more next year. ” He added that “it is an important advance and society must understand that public accounts cannot stand on their own and that society should make some kind of sacrifice after the profound distortions of the Correa era (2007-2017).” (I)