Businesses warn of ‘depression’ if restrictions are not lifted soon; Moreno pushes National Assembly to pass his ‘humanitarian’ plan

Apr 24, 2020 | 82 comments

National and local business organizations say Ecuador’s economy faces a “depression” if Covid-19 restrictions are not lifted soon. The national Chamber of Industries and Production says that 23,000 businesses face record financial loses and possibly bankruptcy and that 500,000 jobs are at risk.

President Lenin Moreno

Executive Director of the Chamber Pablo Zambrano said Thursday that business is down more than 80 percent nationwide and that almost half of all businesses are shut down entirely. “We are suffering terribly and desperately need a plan to restore the economy,” he said. “The government has ordered us to continue making social security and tax payments but our ability to do this will end within weeks if we are not able to resume operations.”

Zambrano estimates that business loses amount to almost $13 billion since health emergency restrictions went into effect March 16. “We are appealing to the national authorities, the Committee of Emergency Operations in particular, to allow us to open our doors again under protocols that will protect our workers and the public from Covid-19. We understand the grave threat of this terrible disease but our way of life must resume.”

The national Chamber of Small and Medium Enterprises is sounding a similar alarm. “We are 90 percent shut down at the moment and I don’t know how much longer we can expect our members to continue this isolation,” says Chamber Director Gustavo Ruiz. “We need a plan now to reopen the country and believe this can be done safely to protect everyone involved.”

Even with a full resupmption of business, Ruiz says it will take six to nine months for small businesses to recover, and even longer under social distancing guidelines.

On Monday, Interior Minister Maria Romo said that some businesses are being allowed to resume work under strict health guidelines, including the construction industry. She said more allowances will be announced in the coming days.

Moreno demands quick action from the National Assembly
In the face of mounting attacks on his leadership, President Lenin Moreno is appealing to the National Assembly to move quickly to pass the “Humanitarian Law” he submitted last week. “We are at a critical moment to Ecuador’s history and decisive action is required and it is required now,” he said.

The humanitarian law imposes new taxes on workers and businesses in what Moreno calls an “emergency action” to shore up the national ecomomy. “At the same time, we face the challenge of the coronavirus and the collapse of the international oil market,” the president said. “It is a scenario none of us could have foreseen but it is upon us and we must respond forcefully.”

Guillermo Lasso

The legislation is facing strong headwinds from both the political left and right and most analysts say it will not pass in its current form. “It pleases no one and it does not take care of the problem,” says Enrique Ayala Mora, leader of the Socialist Party. “It demands payment from workers who cannot even cover their household expenses and demands far too little from the large corporations that can afford to pay more.”

Like other political players, Mora says that Moreno has failed to develop a national plan of action that Ecuadorians can support. “We need leadership more than ever, we need vision and planning, and the president is not supplying it.”

Center-right presidential candidate Guillermo Lasso says he would be willing to support “drastic measures” given the emergency but says increasing taxes is not one of them. “People don’t have work, companies are facing collapse, so why in the world would you demand they pay more to the government?” he asks. “There are other solutions and they are not being pursued.”

Under the law of emergencies, the National Assembly has until May 20 to pass or reject Moreno’s proposal.

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