Government’s improving economy claim is disputed by economists; Blackout periods are too short, expert says; Quito band performance raises an uproar

Although Internal Revenue Service Director Damián Larco claims the economy is improving, economists say the opposite is true. In a Monday television interview, the SRI director said the economy was “on an uptrend,” with October and November sales showing “strong improvements” over 2023.

The Quito Chamber of Commerce’s economic statistics office says Larco is confusing tax receipts with sales. In a statement, the office says every month of 2024 has shown a drop in sales compared to 2023. “We do not have complete data from October, when the electric blackouts began, but all indications are that the numbers are even worse than those through September,” the Chamber said. “Unemployment has increased in 2024 and household income has decreased, which are not signs of economic improvement.”

Some Quito city council members are demanding to know why the grunge band Mugre Sur was allowed to perform at last week’s Quitofest celebration.

Economic consulting firm Kantar Ecuador confirmed the Chamber’s analysis, reporting that six out of ten Ecuadorian households had reduced spending on food and household goods through September as a result of poor economic conditions. “We expect that reduction has continued and grown in October and November as a result of the power blackouts.”

In response to Larco’s report that SRI tax collections have increased 14% for the year, Kantar said the increase was “entirely the result of the higher VAT.”

Blackout periods are too short, experts say
Despite improving conditions at the country’s hydroelectric plants, energy experts insist that the blackout hours prescribed by the Energy Ministry are too short. “Yes, the situation is improving but it is far too early to reduce the suspensions to three hours,” says municipal utility consultant Ricardo Buitrón. “They should be five or six hours to allow for the recovery at the Mazar complex.”

According to Buitrón, the ministry has repeatedly insisted that it will keep the turbines at Paute-Mazar idle but has not followed through. “With the increased production at Coca Coda Sinclair, they have the opportunity to allow the Mazar reservoir to rise but they continue to activate the power plants for the purpose of reducing blackout hours. Because of the recent rain, it would require only a two hour increase in blackouts to accomplish this.”

Two of three plants at Mazar were operating at as much as 40% capacity since Friday, Buitrón said. “This requires a drawdown of one to two meters of the reservoir when it should be allowed to recover.”

Milton López, a former engineer at the Energy Ministry, says the level at the Mazar reservoir, which stood 2,114 meters above sea level on Monday, would be two or three meters higher if the hydro plants had been kept idle over the weekend. “Unfortunately, the decisions made at the ministry seem aimed at pleasing the public, not by the need for long-term sustainability of the power system.”

After President Daniel Noboa announced early Tuesday that all blackouts would end December 20, Buitrón responded “unbelievable” on his X account.

Quito band performance raises an uproar
Quito municipal council members are demanding to know why the grunge band Mugre Sur was allowed to perform at last week’s Quitofest. During its performance, a cardboard cutout of President Daniel Noboa was suspended by a rope, while a band member shouted “hang the son of a bitch, burn the son of a bitch.”

At least nine city council members questioned why the city’s cultural affairs office granted permission for Mugre Sur to perform. “We want an explanation from the cultural director how this decision was made since the band’s reputation was well-known,” said Councilor Fidel Chamba. “Especially during this time of great insecurity, why are we permitting a group that promotes violence to perform? We want this explained to us.”

Chamba and fellow council members have ordered Cultural Director Jorge Cisneros to appear before the full council next week to answer questions.

Cisneros defended the band’s performance, claiming they were exercising their right of free artistic expression. “We understand the objections but are absolutely respectful of the content of artistic works,” he said, adding the representations of violence were intended as satire. He also pointed out that another band performing at Quitofest displayed an image of former president Rafael Correa holding his severed testicles.