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What have been the implications derived from Argentina’s crisis and Mexico’s recession for Ecuador?
In Ecuador, the Argentine and Mercosur
crises as well as the slight crisis of Mexico may have an indirect impact
as the risk of Latin America as a whole increases and this derives in
higher costs for our country and a lower investing interest. But directly,
it affects us less because our trade with these nations is incipient yet.
How would you describe the current social,
political and economic situation of Ecuador?
On the economic front, Ecuador has made
considerable progress since 1999 when it was struck by a terrible crisis
as the country’s GDP –in dollars- plummeted one third in one year. The
country impoverished to two thirds and many think that impoverishment
dropped half of the figure before the crisis.
From then on, the Ecuadorian economy has
performed highly favorably, especially due to dollarization, which has
greatly benefited the country’s recovery process though some sectors have
been affected by this year and a half adjustment with fixed currency called
inflation but is in fact a search for new economic standards. Currently
inflation is definitely low and is expected to have one-digit rise in
2002, something we have not seen for a long time now.
On the political front is where uncertainty
lies in some way because of something common to all Latin American nations:
governments that take ‘power’ without power and so they find it extremely
difficult to rule and make the necessary changes to face the challenges
of the time: globalization, economic openness, fast-moving cash flows
across the world. Globalization is not a choice, it is a fact we must
accept and get used to.
On the social front, I think the Ecuadorian
society may have more hopes for a real improvement as long as we preserve
the benefits obtained in the last 18 months in terms of dropping inflation.
There are important challenges ahead and we need greater labor flexibility.
‘The banana conflict relates to the drop in international
prices and the crisis derives from it (…) As to
the CONAIE, I think the Ecuadorian indigenous sector has become aware
of its political strength and
I don’t think it is an ethical problem as such’
Even when the economy seems to be taking a turn
for the better, the government fails to come up with a solution to social
conflicts. Ecuador suffered successive conflicts, for instance banana
producers and the current resistance of the Confederation of Indigenous
Nationalities of Ecuador (CONAIE) to the imminent fiscal reform raised
by President Noboa’s administration. Can this be attributed to a President’s
failure?
It is quite a complex situation. As I
just said, our governments in general –and President Noboa’s is no exception-
are weak with little political support. Apparently, the President finds
its very difficult to simultaneously address the challenges of the banking
crisis Ecuador was suffering –which is still menacing despite much has
been solved. The banana conflict relates to the drop in international
prices and the crisis derives from it. If international prices were
higher now, this conflict would not exist.
As to the CONAIE, I think the Ecuadorian
indigenous sector has become aware of its political strength and I believe
it is not an ethical issue. This does not mean the indigenous sector
does not need higher attention that the country has paid to it. I understand
that the 2002 Budget already submitted for Congress’ consideration including
social spending which comprises considerable figures to solve real problems
of the indigenous groups in the Ecuadorian sierra.
Economists worldwide forecast slowdown
of economies. However, all maintain that Ecuador will be one of the
few countries to grow. What is your view?
I think Ecuador is likely to grow from
5 to 7 percent next year fueled by investment and good expectations
in the oil sector. Ecuador is expected to receive investments from 3
to 4 billion dollars in the next 2 and a half years in the oil sector
both due to the investments in the second oil pipeline that crosses
the Ecuadorian border as well as the exploitation of already identified
oil reserves in our Amazonian region.
* Conducted during the XII CEAL Annual Plenary Session, Buenos
Aires, August 29-31, 2001.
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