Has the government put paying its creditors ahead of funding the fight against Covid-19?

The resignation of Health Minister Catalina Andramuño Saturday ignited a firestorm between the country’s public health professionals and Ecuador’s Ministry of Finance. In her letter of resignation, which was leaked to the press, Andramuño complained that she was asked to fight the coronavirus without sufficient funding, a mission she called “impossible.” She also complained that political priorities were being placed ahead of rapidly growing demands to control the virus.

Ecuador finance minister Richard Martinez

Some government critics are claiming that the Moreno government has decided to pay its creditors instead of transferring more money to the anti-Covid-19 effort.

Although Finance Minister Richard Martínez responded to Andramuño that the health ministry had, in fact, received addition funding, the claim was belied by a leaked email in which Martínez told Andramuño that there were no more funds forthcoming and that her ministry “must work within the previously assigned budget.”

The charge that the government was putting creditors ahead of the health emergency was bolstered by comments made last week by Deputy Finance Minister Esteban Ferro in which he said money to pay creditors would not be diverted to the virus fight. “The market has no need to worry about Ecuador,” Ferro said in an interview with LatinFinance. “We are putting our fianacial obligations first and our creditors will not be disappointed.”

Ecuador Surgeon General Iván Cevallos

Public hospital administrators and health workers organizations have complained bitterly about a lack of supplies to handle the health emergency. “We are unable to follow even the most basic World Health Organzation recommendations for the virus without additional money,” says Ecuador Surgeon General Iván Cevallos. “We don’t even have enough medical masks and gloves to do our job. I understand that the government has $800 to $900 million available and it is unconscionable that this is not applied to this crisis,” he said.

While some economists claim that Ecuador has no alternative but to pay its debts, saying that future loans hang in the balance, others agree with Cevallos that public health should come first. Former Central Bank presdient says Andrés Arauz the priority must be the fight against Covid-19. “This is a once in lifetime emergency that could easily become a disaster,” he says. “The government should look to seek payment deferments or renegotiate some of the debt so money can be applied where it is needed most, the health of the Ecuadorian people.”