By Luis Fierro Carrión (*)
Twitter: @Luis_Fierro_Eco
On Sunday, April 11, Ecuador will go to the polls to
choose between Andrés Arauz, candidate of Correísmo; and Guillermo Lasso,
candidate of the CREO-PSC alliance (with the support of other political
forces).
These are two diametrically opposed alternatives, in
almost all aspects.
While Arauz said in his proposal on "good
de-dollarization" that he will raise the Tax on Currency Outflow (ISD) to
27%, and that the Central Bank would grant a "fixed quota" for
importers (creating a market distortion, as he himself recognized in his 2009 Master's Thesis); Lasso proposes to eliminate the ISD.
Apart from this exchange control (unique in a dollarized economy), Arauz would probably increase tariffs or
collect safeguards on imports again.
The correista bloc in the Assembly also proposed to
deliver a “universal basic income” in “electronic currency”; candidate Arauz
later rejected that proposal and said, instead, that a $ 1,000 bond would be
delivered to 1 million families by taking resources from the reserve of the
Central Bank of Ecuador. It should be mentioned that these correspond to the reserve of private bank deposits held in the Central Bank; that is, ultimately, it is the
depositors' money. Currently, the international reserve does not cover all
commercial bank deposits, which is why there is a gap of nearly $ 7 billion
between the assets and liabilities of the Central Bank (the Moreno government
began to reduce this gap inherited from Correa, but with the pandemic it has
increased again).
In more general terms, Lasso's proposal focuses on the
generation of productive employment, and he even proposed increasing the
monthly minimum wage to $ 500 (from the current $400); while Arauz focuses on the delivery of cash
transfers, even at the risk of further reducing the net international reserve,
and therefore putting dollarization at risk.
Arauz's pre-announcement that he will increase the ISD
to 27% could possibly lead to an outflow of currency in anticipation of this
measure.
Lasso has proposed to lower five taxes, while Arauz
proposes to increase the income tax and create a wealth tax. Arauz would bet on
strengthening a State-centered model, including increasing public spending; while Lasso would seek
to strengthen the private sector.
Lasso proposes reducing income tax for companies that
create at least 10 jobs.
While Lasso has said that he would strengthen
dollarization, Arauz talks about the emission of "electronic currency" and using the resources of
the international reserve. By refusing to lower public spending and investment,
Arauz will maintain a high deficit and continue with the aggressive public indebtedness process that began in 2014 under Correa; it is likely that his
fiscal policy, his proposal to raise the ISD, the potential use of the BCE
reserves and the issuance of electronic money would lead to Arauz not receiving
the outstanding disbursements from the IMF for $ 2.5 billion. Lasso has said
that he would seek to reduce the deficit.
On issues that interest the young and progressive
voters of Hervas and Yaku Pérez, such as mining, oil exploitation and the
protection of water sources, Lasso's position is closer to the voters of Pérez
and Hervas than the practice of Correísmo, which expanded oil and mining
extraction, even in places of great biodiversity and environmental
vulnerability such as the Yasuní National Park (manipulating the Electoral body
under its control for the purpose of thwarting a plebiscite against oil
exploration in the Yasuni). Lasso proposes to maximize environmental prevention
in mining and oil production, including prior consultation of affected
communities.
This extreme extractivism during the Correa decade
even led to the murder of several indigenous activists who were opposed to the oil and mineral exploitation,
such as Bosco Wisuma, Freddy Taish, José Tendentza, three of the 35 unsolved
murders of the Correa government (others include 15 journalists and people who
denounced corruption , such as General Jorge Gabela, Quinto Pazmiño and his
wife, journalist Fausto Valdivieso, among others).
Correísmo also faces accusations and sentences of
corruption, including Rafael Correa, Jorge Glas, ministers Carlos Pareja
Yanuzelli, María de los Ángeles Duarte, Ricardo Patiño, Walter Solís, Vinicio
Alvarado, Fernando Alvarado, Alecksey Mosquera, María Duarte, Raúl Carrión ,
Ramiro González and Viviana Bonilla, the Legal Secretary Alexis Mera, the
Comptroller Carlos Polit, the assembly members Cristian Viteri and Esperanza
Galván, the president of the Central Bank Pedro Delgado, the directors of the
IESS María Sol Larrea and Iván Espinel (as well as former IESS President Ramiro González), the director of Petroecuador, Álex
Bravo, the Secretary of Intelligence, Pablo Romero, the Secretary of
Communication Carlos Ochoa, and the Presidential advisor Pamela Martínez, among
others. Of these, 8 were imprisoned, and the rest are at large. It is estimated
that the amount of resources lost to corruption reached $ 35 billion.
Arauz has mentioned that he will seek to have the
sentences against Correa and other members of his government annulled.
Lasso has never been criminally charged, and, despite
the fact that the Correa government investigated his alleged participation in the banking crisis of 1999,
he was never accused. Eduardo Valencia, who led the investigation, found
presumptions of guilt of Juan Falconí Puig and Pedro Delgado in the
embezzlement of the CFN that occurred in 1999-2000, but they were never charged
or separated from their positions in the Correa government; Delgado fled to his
“son's wedding” in Miami in 2012 and never returned.
Arauz affirms that virtual platforms are natural
monopolies, and that is why they must be considered public utility goods, as
happened when they turned the right to communication into a public service.
This proposal would be aimed at controlling virtual platforms and their users.
The two government plans could be strengthened in
terms of environmental issues, sexual and reproductive rights, identity issues,
the prevention of animal abuse, and gender and diversity approaches, among
other topics of interests of the Millennial and Gen Z voters.
(*) This is a translated and expanded version of the
column published in Diario “El Universo” on March 5th, 2021.
https://www.eluniverso.com/opinion/columnistas/dos-opciones-opuestas-nota/
The image shows the original version of the article by Andrés Arauz on "good dedollarization".
