Ecuador trade minister opens talks with IMF and hopes to negotiate a settlement with Chevron
By Dion Rabouin
Ecuador is hoping to mend fences with the International Monetary Fund (IMF) and is also eager to settle a long-simmering dispute with Chevron Corp, the country’s trade minister said on Friday, the latest sign of a more business-friendly stance by new president Lenin Moreno.
The country is looking for aid to help bridge a $3.5 billion budget gap this year and an expected $6 billion hole in 2018. A loan from the IMF is its favored method of covering the deficit, Minister Pablo Campana Saenz told Reuters during an interview in New York.
“I think it will be very important for Ecuador to get closer to the IMF,” Campana said. “We haven’t worked together closely in the last eight, nine years.”
The previous administration of President Rafael Correa had butted heads with the multilateral lender over conditions that accompanied loans in the past, including spending cuts. Campana said the Moreno administration opposed eliminating subsidies for the poor but was hopeful that a deal could still be implemented.
“Ecuador is a small dollarized country, and not everything that IMF was requesting in the past we could do at that time,” he said. “Now, hopefully there are some procedures and requests from IMF that could let us work together.”
Ecuador’s finance minister met with representatives for the IMF in early September, but the organization said Friday that they did not yet “have a date for the “formal 2017 Article IV consultation.”
Ecuador is also looking to expand its relationship with the United States and draw foreign direct investment from it and other countries, Campana said, noting that Moreno has declared Ecuador “open for business.” The OPEC nation is seeking bids for public contracts regarding oil and other areas.
Campana also said the Moreno administration is looking to finalize an agreement on a dispute with U.S. oil producer Chevron that has gone unresolved for more than 20 years.
In February 2011 a judge found Chevron liable for environmental and social harms in Ecuador’s Amazon region. The lawsuit has since been appealed multiple times and the parties – Chevron, Ecuador and the Amazon communities affected – remain at odds.
In June, the U.S. Supreme Court ruled in Chevron’s favor, preventing the Ecuadorean villagers and their American lawyer from trying to collect on an $8.65 billion pollution judgment in the U.S.
Prospects look better for plaintiffs in Canada, where courts have ruled against Chevron on two occasions.
“It is the time to sit down, dialogue, clean whatever has to be cleaned and try to solve this issue which would be the best for Ecuador, Chevron and the U.S.,” Campana said. “With a frank dialogue I’m sure that we can solve this one issue that has been a problem for 23 years.”
Credit: The Times of India, http://timesofindia.indiatimes.com