Ecuador: Migrants warn of banking collapse if Lasso wins presidency

Posted on March 9, 2017 • Filed under: Business, Ecuador, Politics
Migrants who left during the crisis could finally return to Ecuador due to improved economic conditions under President Rafael Correa’s government.

The network of Ecuadorean migrants who returned to the country in recent years after having fled in the wake of the 1999 banking crisis have warned that in the event that right-wing presidential candidate and former banker Guillermo Lasso wins the election, many fear he will drive the South American nation into another economic collapse.

Alex Flores, head of the Returned Migrants Association, made up of about 70,000 Ecuadoreans who left the country in the face of financial crisis, warned of the dangers passing power to a corporate-friendly government led by a politician who had a hand in bringing on the 1999 collapse.


“Many people wonder, if he did so much damage, why is he not in prison?” said Flores. “When he was finance minister, he was responsible for creating laws so that the immorality he committed would be ‘legal.'”

Lasso was one of the bank chiefs that co-signed a law in 1998 that made the state responsible for private bank debt. The law paved the way for the government, under then-President Jamil Mahuad, to freeze bank accounts the following year.

The event, known as the “bank holiday,” had a monumental impact on Ecuador’s society and economy, costing citizens more than US$8 billion in a year when the country’s annual GDP was just over US$19.6 billion. Many lost their life-long savings and some 2 million Ecuadoreans were forced to leave the country. Months after the bank holiday in March 1999, Lasso became Mahuad’s minister of finance.

Remember Those Responsible for Banking Crisis, Says Correa

Flores said the danger is that if Lasso becomes president, he will side with the banks and could create what he called “a second bank holiday.”

“That is the serious danger that the migrant community faces if a banker comes to power, because a banker will never lose his or her nature,” said Flores.

Flores recalled that under President Rafael Correa, the National Assembly passed a law to protect Ecuadorean migrants who had moved to Spain but then suffered as a result of economic crisis there. The measures acted to protect Ecuadoreans who had returns to the country from being liable for debts in Spain.

After assuming office in 2007, Correa’s government also launched a campaign to reach out to Ecuadoreans abroad to facilitate their return through a program called “Welcome Home: For a voluntary, dignified and sustainable return.” The program has allowed migrants to bring their belongings back to the country duty-free and enjoy other benefits to try to give them a boost upon their return, such as qualifying for unemployment assistance.

Flores said that Lasso’s bank, Banco de Guayaquil, is one of the institutions buying mortgage debts from migrants triggered by the country’s worst economic crisis, to later enforce an embargo. He says he fears Lasso would ease these banking restrictions.

“It is necessary to remember that although Mr. Guillermo Lasso denies this, one of his proposals for his government program is to internationalize the banking sector. What does that mean? It means bringing foreign banks here,” said Flores.

“For the migrant community in Spain, what do you think BBVA, Banco Santander, Caixa, Bankia and Deutsche Bank will do first? They will seize houses and lands with mortgage debts abroad,” said Flores. Read Article

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