Correista candidate Arauz says he would end IMF agreement, focus funding to ‘recover human dignity’

Nov 24, 2020 | 28 comments

If he is elected, Presidential candidate Andres Arauz says he will suspend Ecuador’s loan agreement with the International Monetary Fund, rearrange national funding to provide a living wage for poor Ecuadorians, resume major construction protects and institute an economy based on electronic money.

Presidential candidate Andres Arauz

A protégé of former president Rafael Correa and standard-bearer of the Unión por la Esperanza (Unes), Arauz accuses the Lenin Moreno government of “making a deal with the devil” in negotiations with the IMF and says he would realign government interests with the interests of the people.

“First, we will recover the democratic institutions that have been abandoned by the current government and, once again, make the human being the priority of public policy,” Arauz says. “My first actions as president will be to provide emergency support to poor families who have suffered from both the pandemic and national policies that support the rich and their corporate interests.”

Political analysts say that Arauz and Unes will likely run second to centrist-conservative Guillermo Lasso in the February election, possibly forcing an April runoff election. “The consensus of the polls is that Lasso is well ahead at this point but does not have the 50 percent support needed to avoid a runoff,” says Gustavo Alcivar, economics lecturer at the University of Guayaquil. “Many people do not give the Correistas and Arauz much chance but we are more than two months from the election in a very fluid political environment.”

Alcivar adds that Arauz is in a similar position to Correa in the 2006 campaign. “In the months leading up to that election, no one gave Correa much of a chance but he took advantage of wide public discontent and a political vacuum.”

In recent interviews, Arauz laid out his political strategy which begins by abandoning the IMF loan agreement. “I would not honor that and would negotiate our way out of its condition,” he said. “The agreement is focused on corporate and international financial interests, not the needs of the people.”

Although Arauz says he would keep the U.S. dollar as Ecuador’s currency, he would shift transactions away from hard currency to an electronic currency system proposed but never implemented by Correa. Although critics say the Correistas would attempt to “create money out of thin air” to fund their programs, Arauz says it would be a “disciplined and controlled” system. “It would allow us more flexibility in our planning but its basis would remain the dollar and it will not lead to high inflation, as suggested by some.”

Educated as an economist in Mexcio and the U.S., Arauz worked for the Ecuador Central Bank during the Correa administration.

Taxes would rise and new restrictions would be put in place for large companies under an Arauz administration. “First, I would stop the outflow of money from Ecuador and would enforce the law against off-shoring money that has been ignored by the Moreno government,” he says. “We will keep money and investment in the country. This will provide additional tax revenue to fund projects and programs for the people, especially the poor.”

Arauz says his first year in office would focus on “undoing the economic damage” of the Moreno years. “During the second year, we will begin work on major capital projects such as the construction of schools, highways and hospitals that have been abandoned since 2017,” he says.

Just as important, Arauz says, is “reestablishing” the dignity of the people. “People must have income needed to lead comfortable, productive lives. They must have high quality education and health care. This was the goal of Rafael Correa and I intend to return to this ideal.”

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