Blueprint to fix economy as Ecuador prepares for a future without Correa

Posted on November 30, 2015 • Filed under: Economy, Ecuador, Politics

A DEEPER INSIGHT INTO THE CULTURE OF ECUADOR – READ THIS BOOK report: Credible media reports say that president Rafael Correa, conscious of the depth of the recession, would prefer not to have to deal with it under his leadership – hence his announcement not to run in 2017. So do some of his neighbors in Quito. Bolivian president Evo Morales, reflecting the Boliviarian presidents’ nonchalant way of commenting on each other’s affairs, said Correa will leave to improve ties with his family, above all his Belgian wife, Anne Malherbe, citing a private telephone call. What Correa’s successor – be he former vice president Lenín Moreno or an opposition politician like former banker Guillermo Lasso, who has already announced his candidacy – the ways out of the crisis can, to some extent, already be sketched. Whatever the reforms, they will hurt.
…One of the main risks from the current downturn is, of course, unemployment. Lasso correctly identified jobs as the economy’s key requirement, considering that “underemployed” (people who don’t have a steady job) account for the majority of the workforce. It would be hoped for that deregulation and the retreat of the state from its current exaggerated positions would lead to more private-sector jobs. Key here will be local and foreign investment, for which institutional confidence would be the most important basis.

Admittedly, the Correa administration continues to seek to drum up support, thanks to the new public-private-partnership law. This however under the current political, legal, and institutional framework unfortunately falls short of requirements, particularly considering the progress among competitors in the region, particularly its direct neighbors, which have both larger domestic markets, free trade agreements with leading trading partners, and large infrastructure projects with private-sector participation. Here, Ecuador needs to stop blocking trade with Colombia and Peru, letting its exorbitant duties up to 45 percent expire (if not rolling them back sooner than planned) to secure their support for its accession to the free trade pact with the European Union.

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