ECUADOR DIGESTGovernment projects $5 billion budget deficit; Manta restricts motorcyles to one rider to fight crime

Ecuador’s finance minister Fausto Herrera has presented the National Assembly with a proposed budget of $32.3 billion for the second half of 2013. He says it will mean a $5 billion deficit.

Herrera  says the deficit will be covered in part by a $1.4 billion from China, which will be paid by future oil deliveries. He also said that the government is considering borrowing $200 million from the national social security system.

In February, China provided a $1.4 billion loan that was used for flood control and construction at the Coca-Codo Sinclair hydroelectric plant, scheducled for completion in 2016. That loan too, was backed by future oil deliveries.

Herrera  said that although Ecuador will not issue bonds to finance its budget through the rest of the year, it is considering returning to the capital markets in 2014. Ecuador defaulted on several bond issues from previous governments in 2008, which President Rafael Correa called “illegal and immoral,” and has not retured to the market since.

Herrera’s budget represents a 7.8% increase over the same budget period in 2012.

Manta bans two-person motorcycle rides

In an effort to combat a rising tide of crime, the Manta city council has passed an ordinance prohibiting more than one rider on motorcycles traveling city streets.

Manta police say that a number of murders and hundreds of robberies have been committed recently by two men on a motorcycle, where one drives and the other fires a gun or jumps off to commit a robbery. National police report that crime rates in much of Ecuador are falling but that rates are rising in coastal cities, often connected to the drug trade, they say.

The new ordinance allows traffic police to impound motorcycles with more than two riders and put riders in jail for up to 48 hours.

Some city council members disagreed with the ordinance, saying that motorcycles are the primary means of transportation for some families. “Will the motorcycle be taken away if there is a child or wife riding with the driver? How are these people supposed to get around?”

Employers owe $300 million, government says

A number of high-profile Ecuadorian companies, including the country’s biggest football club, owe $300 million to Ecuador’s social security system, the government says.

To collect back payments, the Social Security Institute of Ecuador (IESS) gave Guayaquil’s Barcelona football club 90 days to pay arrears before they seize its football stadium. The government also seized a high school and university in Guayaquil but said that clases could continue in the facilities as the owners attempt to catch up on payments.

“We cannot afford to be permissive in this situation,” said Iván Espinel, IESS’s Guayas director, who carried out the confiscation of the properties. “The workers of Ecuador deserve and need these funds.”

Photo caption: Ecuador National Assembly