The Comptroller presented six preliminary findings in the special examination of debt management between 2012 and 2017. Debt exceeded 52% in relation to GDP. The previous government would have exceeded the legal limit of indebtedness in 2016. By December of that year, the consolidated public debt represented 52.54% in relation to the Gross Domestic Product (GDP), when the allowed is not to exceed 40%.
There was $ 65,749 million between internal and external debt, including resources from the anticipated sale of oil that the administration at that time did not recognize as debt, said Pablo Celi, Comptroller General of the surrogate State.
This and five other findings were revealed yesterday by the Comptroller General of the State during the reading of the draft of the final report of the special examination conducted to manage public debt between January 1, 2012 and May 24, 2017. In 2016 the calculation of the consolidated debt was modified with Executive Decree 1218 and caused the level of indebtedness in relation to GDP to fall to 27.4%, since the debt with public institutions was no longer considered.
The Comptroller determined that this maneuver resulted in new obligations “despite having exceeded 40%” and without requiring the approval of the National Assembly.
To the Comptroller’s information requests, the Ministry of Finance justified that the pre-sales are not debt but commercial transactions and the law allows public companies to pre-sell their goods or services.
However, the audit disagrees with this criterion, since it explains that, according to pertinent documentation, the anticipated sale of crude oil served to inject liquidity into the State. The audit committee mentioned difficulties with the Ministry of Finance to receive documentation that, among other things, would justify why certain debt operations were declared as secret and reserved, blocking all access to the relative information.
In this regard, the Comptroller’s Office warns that these transactions occurred under the protection of ministerial resolutions, “without observing the previous provisions regarding terms to make the information public”. The special examination also analyzed the credit agreement signed between Petroecuador and the Industrial and Commercial Bank of China Limited (ICBC), through which the Government obtained financing. Celi clarified that the process is not yet conclusive. Audited persons can submit observations for five days.
Examination of the Citizens Commission is almost ready
One of the first actions of the current State General Comptroller, Pablo Celi, was to form the Citizens Commission for the special examination of the legality, sources and uses of the country’s internal and external public debt, the same whose draft will be delivered in the coming days, as announced by Pablo Dávalos, who is part of the group.
It is a draft because the responsibilities will be determined and once the people present the arguments of their participation, a final report will be made. Along with Dávalos are Ana Abril, Patricio Alarcón, Roberto Aspiazu, Magdalena Barreiro, Alfredo Corral, Ramiro Crespo, Marcelo Merlo, Leon Roldós, Eduardo Valencia and Mariana Yépez.
The supervision was created on January 8, at that time the Comptroller clarified that the purpose is “to observe the procedures and methodology carried out by the technical teams in charge of this control action.”
Likewise, he indicated that “the observers will be able to observe the findings, conclusions and recommendations, in a space of interlocution and interaction for the improvement of the control action, through the contribution of technical criteria, specialized opinions and analytical perspective” (I)