Sunday, August 7, 2022

Ecuador faces huge challenges after indigenous attack

Quito ( Associated Press) – Ecuador faces the challenge of recovering its economy and funding commitments it has made with indigenous leadership, after signing a deal a day earlier to demand a price cut for two weeks. A standstill of over and ended violent protests. Gasoline among other necessities.

According to production ministry data, economic losses amount to $1,000 million, with an average of $55 million per day in the public and private sectors, reported Minister Julio Prado, who called for “accelerating productive reactivation”. ,

For her part, the education minister, Maria Brown, indicated that 1.8 million students were affected by the suspension of face-to-face classes, while 575,000 did not receive school meals.

Atallo Cedeno, the manager of the largest state-owned company, PetroEcuador, said in a press conference that as a result of the national strike, a loss of about $513 million, including crude oil, has been recorded. Not sold, start-ups of over 1,000 wells were halted by protesters and 34 drilling rigs resumed operations.

“We found that the operation was dismembered, dismantled, destroyed, electrical cables, transmission cables for pumps, fans stolen, everything found in their path was stolen. “They are not strikers, they are attackers,” he said, adding that production is expected to increase to 90 per cent in a week.

Shortly after the protests began, Ecuador invoked major acts of force to protect itself from lawsuits and fines for non-compliance with its contracts and obligations to sell crude and pay suppliers. It is not yet decided when the force majeure will be lifted.

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The cost to the country should be assessed with a comprehensive look that considers quantitative and qualitative, assured the president of the College of Economists, Santiago García, who estimated the cost of production losses between $500 million and more than $100 million. had guessed. oil fields.

In a statement to The Associated Press, Garcia recognized that the impact of social mobility should also be taken into account in the country’s farming regions, where he says six out of every ten people are poor.

“The country will now have to invest and channel the resources to take care of this sector,” he said.

On the other hand, the fuel price would drop from 2.55 per gallon of additional gasoline to 2.40 and 1.90 per gallon of diesel to 1.75 to $3,100 million, which would mean “double the financing, not only because of unemployment, but because Ecuador is short of fuel.” Of every 10 gallons of fuel, only three are national products”, explained Garcia of the College of Economists.

One of the demands of the Confederation of Indigenous Nationalities of Ecuador (CONAIE) demanded a reduction of 40 cents per gallon of gasoline and diesel, but after the signing of a peace agreement, established it at 15 cents and a commitment to work went. Dialogue Tables is a program to target fuel subsidies.

The government signed decrees considering a 50% subsidy on urea, a five-dollar increase in the Human Development Bond, a waiver of public bank loans for loans of less than $3,000 and a fuel reduction at 15 cents per gallon of additional gasoline. And diesel, is over $800 million.

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“We have had to go through a struggle of this magnitude … to agree that we need to make the citizens, the rural people, the priority,” García said.

Jose Hidalgo, manager of the Development Studies Corporation (CORDES), disagrees with García’s reading. Before the strike, Ecuador’s fiscal deficit was double digits of gross domestic product (GDP), representing $2,000 million, “but there is now a more fiscal fallout, which will hit growth in the first quarter of 2022. 3.8 % and for the second quarter, which includes June, “it will certainly be lower,” he said.

Hidalgo believes that the real cost is “the price that the state paid to free the country from abduction.” CORDES estimated daily losses of five million dollars in tourism, five million dollars in flower exports, 10 million dollars in retail, three million dollars in the poultry and livestock sector, even during stagnation or property damage. Without evaluating stranded transport. , private and public property, he said.

This adds about $200 million to the Hidalgo oil field due to reduced crude production and exports.

With regard to fuel, he assured that “this is clearly a decision that was made under extreme pressure and will not bring any benefit from an economic point of view”, as it has been shown that subsidies benefit medium and high access areas. does, he concluded.

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Associated Press Ecuadorian correspondent Gonzalo Solano contributed to this report.

Nation World News Desk
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