The Government met with bank representatives to coordinate the placement and purchase of domestic debt for USD 200 million, and with ambassadors to discuss international aid.
Referential image. Several people walk through a flooded area in Esmeraldas, in the past rains, on June 4, 2023.
The Government will send, next week, a decree law to expedite the processes of public contracting, in the face of the threat of the El Niño phenomenon.
Authorities estimate that El Niño could cause damage in 143 cantons in 15 provinces.
With the decree law, which will be sent to the Constitutional Court, the Government seeks that the Development Bank (BEDE) finance local governments to rent machinery.
And open the way so that equipment seized from illegal miners can be used.
The reforms seek, in the medium term, to expedite the processes of purchasing medicines and supplies for the public health network.
In the worst-case scenario, according to studies by the Risk Secretariat and the Navy Oceanographic Institute (Inocar), the El Niño phenomenon could leave some 35,000 homeless.
How is the impact
At the same time, the administration of President Guillermo Lasso has met with the accredited ambassadors in Ecuador, with businessmen and bank representatives.
He has presented them with a five-phase plan (click on the blue link), which begins with prevention and ends with the reconstruction phase.
The initial part of the plan will cost USD 266 million, without counting the money to attend to the victims and to rebuild roads, houses and other infrastructure.
If the worst scenario materializes, which is that of a moderate-high phenomenon, the costs for Ecuador could amount to USD 4,000 million.
The figure includes not only physical damage from flooding in susceptible areas, especially on the coast, but also the effects on the economy.
In 2024 Ecuador could face an economic slowdown, due to the loss of crops and other productive activities, as well as lower tax collection.
And a reduction in revenue, of at least USD 1,000 million, is not ruled out if the option to stop oil operations in the ITT block wins in the popular consultation in August.
Conversations with the bank
To finance the initial plan, the Government hopes to place Treasury Certificates (Cetes), which are internal debt papers, for USD 200 million.
The buyers of the Cetes would be the private banks, which the Government has asked to join the efforts.
Another USD 66 million can come from a line that Ecuador has with the Development Bank of Latin America (CAF), for road maintenance.
The Government’s position is that there will be an impact that can be mitigated, but not completely eliminated.
This is a situation that would affect, in one way or another, 100% of the population.
When does El Nino start?
According to Inocar, there is an 84% chance that El Niño will begin to manifest itself in the middle of the year .
But whether it will have a moderate or high intensity is something that will only be known at the end of November.
The worst El Niño phenomenon Ecuador has faced in a century was in the late 1990s, when the rains began in November 1997.
The other threat is rising sea levels and river flows, which can cause flooding and surges.
The warming of the Pacific Ocean will also impact fishing activities, especially the tuna catch.
There could also be damage to crops and livestock activities.
Given the size of the challenge, the Government has initiated contacts to coordinate international aid, which will be decisive in the care and reconstruction phases.
Peru proposes a common front
The countries most affected by the El Niño phenomenon will be Ecuador, Peru and Chile, where heavy rains and floods are expected. While in Colombia it will manifest itself with a drought.
Dina Boluarte, President of Peru, has proposed to President Lasso to make a common front with Chile.
The logic is that the three countries come together to mobilize credits from multilateral organizations and international humanitarian aid.
Peru has already declared an emergency in coastal regions where there could be flooding.
Humanitarian care includes ensuring the provision of drinking water in the affected areas, access to health and education.
As well as building shelters and homes for the victims, waste management and prevention of situations of violence.
In addition to support programs for the most vulnerable population, such as coverage with the Contingency Bonus and the Housing Leasing Bonus, which may be extended for six months.
What is known about El Nino
According to Inocar monitoring, there are already clear signs that the El Niño phenomenon is coming.
The sea level has risen 20 centimeters, which is still far from the 40 centimeters it reached during the worst phase in 1997.
The sea temperature off the Ecuadorian coast has risen to 26.5 degrees Celsius, when normal is 24 degrees. In 1997 that temperature reached 28 degrees.
There are 143 cantons in the exhibition area, they are those that are below 1,500 meters above sea level.
And an estimated 1.5 million people live in those areas.
