The Government will create new round tables. Forum of ex ministers and analysts with liberal tint propose greater fiscal adjustments. IAEN teachers talk about equity and tax justice. Coincidences, but also technical differences resulted from the meeting that the President of the Republic, Lenin Moreno, had with four members of the Forum of Economy and Public Finance, about the proposals to solve the economic situation of the country. –
The meeting took place on Wednesday afternoon in Guayaquil. Analysts Pablo Lucio Paredes, Eduardo Valencia, Abelardo Pachano and Walter Spurrier were summoned to it. The authorities of the economic front participated in the public sector.
The Minister of Finance, Carlos de la Torre, described it as fruitful. “We all agree that we have to reduce public spending more and more,” said the official. However, he warned that if the fiscal problem could be corrected, a drastic cut in the General State Budget will lead to “a paralysis of the economy itself”. There is a shared concern to find a solution to the current level of indebtedness and its conditions. The intention is for public financing to be sustainable in the long term.
To ensure full coverage of International Reserves in the Central Bank of Ecuador (ECB), a cause of alarm for the financial sector, mechanisms to strengthen dollarization will be analyzed, said Verónica Artola, general manager of the institution. The conversations will continue and deepen, in dialogue tables to which other groups will be invited. One of the groups that wishes to participate is made up of teachers from the Institute of Higher National Studies (IAEN), who presented their position to Moreno on January 16.
Another group, also of academics, is taking shape and next week will announce its plan. Among its members is Pablo Dávalos, from the Catholic University of Ecuador (PUCE), who is also part of the Citizen Veeduría, made up of the General Comptroller of the State, which will accompany the special examination of the public debt.
Economist, Master in Political Sciences, director of the political economic report Weekly Analysis and president of the Spurrier group
“An extended dialogue of three hours without personal confrontations, where it could expose criteria on economic policies”, as well as the economic analyst Walter Spurrier , to the meeting held with President Lenin Moreno. Spurrier is a member of the Economy and Finance Forum, of the 20 members, four were invited.
“The four of us were quite critical in the economic policy that the Government is taking.” There was no talk of small changes but of taking different measures. “We hope that some of the suggestions are taken into account.” There were several points in which all agreed, the main one is that an economic policy should have as main objective the welfare of Ecuadorians.
Another important coincidence is that the private investment takes the post, because there will be no public investment due to the lack of resources. “What will result in an increase in production and therefore increase in employment.” The differences between the sides lie in the fact that the public policies that are being carried out lead to these results.
“We say no and they say yes,” says the analyst. Spurrier also indicated that the cabinet required that this team suggest specific measures to achieve those objectives. But analysts believe that we cannot talk about specific measures when the concept of the set of measures and the direction of public policies do not coincide.
For example, the Ministry of Finance uses the deposits that rest in the Central Bank of Ecuador (ECB) to maintain their rhythm of spending, considering them idle. “We do not consider them that way since they are fulfilling the purpose of giving confidence, that the system is solid”.
The best conditions for there to be a clear policy is not to continue to borrow, we must reduce the tax gap. “Public monies should be used with criteria of scarcity, not with shortage of criteria.” When revenues fall, you must decide how to reduce costs. About the Economy and Finance Forum, Spurrier pointed out that in this there is a participation of people who have managed the economy in the last 40 years. “They are not people who think alike in different ways, but they all agree on how things are going.”
The analyst believes that the new economic groups are related to the government and try to play down the importance of the Forum that has professionals with a long history.
PhD, Vice-rector of the IAEN and professor in the Faculty of Economics of the Central University of Ecuador.
With less media noise and under a heterodox vision, twelve academics from the Institute of Higher National Studies (IAEN) also extended to President Moreno a letter with recipes for the Ecuadorian economy.
They salute that the President is open to listen to opinions, no matter where they come from. But they note that in the proposals of the Forum of Economists “there is not a single syllable that speaks of equity” and contradict constitutional precepts. They believe that fully applying the axis of the Forum is to return to models that led to the socio-economic debacle of the late 1990s and early 2000s, since most of its members were linked (directly or indirectly) with the governments of that period.
“We have to reach a minimum consensus,” said Santiago García, vice-rector of the IAEN, who sees the inclusion of the public university as necessary. Teachers contributed 14 elements to the debate.
They also worry about the sustainability of economic growth, improve the particularities of public debt, rationalize public spending, create more adequate employment, strengthen exports, attract more investment among others. Unlike the Forum, they support regulating imports, especially those aimed at luxury consumption or weakening employment in national productive sectors. And they disagree with the premise that there is an excessive burden of taxes.
Supported by figures from ECLAC, IDB, OECD, and CIAT, García says that “Ecuador is not one of the countries with the most tax burden”. In Argentina, the tax burden exceeds 32%, the same for Brazil. Colombia and Chile exceed 30%, while in the country it reaches 21%. “The one who has more must pay more. It is not possible for large companies to have a tax burden proportionally lower than what citizen’s pay,” he said. Hence, they recommend implementing a comprehensive tax reform with the technical assistance of the aforementioned organizations.
They propose raising the value added tax (VAT) by exonerating the products of the basic basket and of greater consumption. Also focus subsidies, especially fuels, “because they do not contribute to a more equitable society.” There are households, García explained, who benefit from the subsidy when they can assume the real price of the products. “The world is not only efficiency and market, we also need social equity,” he concluded. (I)