Lasso suffers major setback as Assembly rejects investment law; Blames loss on corruption
President Guillermo Lasso was dealt a stern rebuke Thursday as the National Assembly voted down his Law of Investment. The legislation, intended to attract foreign investment, was a cornerstone of his plan to revitalize the economy and increase employment.
Opponents claimed the law would have been a “giveaway” to international corporations and would have resulted in the privatization of public institutions and the outsourcing of public services.
Following the defeat, Lasso claimed more than a dozen Assembly members attempted to “blackmail” him for their votes, asking for money and special projects. “It is the last straw in a show of indecency that Assembly members approached my office asking for cash and other favors,” he said. “I did not participate in this corruption and attempts at tax evasion and did not give in to those who would change their vote for money. The truth will be told.”
Following Lasso’s comments, a presidential aide said that some of the conversations with Assembly members and the president’s office were recorded.
Lasso singled out Xavier Hervas, the Democractic Left presidential candidate in the last election, for throwing his support behind the effort to defeat the bill. “He spread lies and disillusionment that helped turn the tide against a law that would have generated jobs and more income for Ecuadorians.”
With veto-proof 87 votes against the law, opponents celebrated their victory. The rejection was led by the Union for Hope (UNES), Pachakutik (PK) and the Democratic Left (ID) delegations, who claimed that the law was “a giveaway to multi-national companies” that would come at the expense of Ecuadorians.
“This would have been a gift to mercantile interests, not just in the tax breaks but in the sale of public assets to financial concerns,” said Pachakutik’s Salvador Quishpe. “With this legislation, we would see our highways, our health system and our water taken over by capitalist interests. The property of the people is not for sale.”
Before the final vote, supporters of the law added language to the bill prohibiting private ownership of water sources and water processing facilities but it did not change the outcome.
“This is a victory for the people of Ecuador against the neoliberal agenda of the government,” Assemblyman Darwin Pereira said following the vote. “I think it indicates that the battle lines have been drawn for future attempts to rob the people of their ownership of government. We will always stand with the people and against the government.”
In addition to providing a variety of tax incentives to foreign investors, the law would have established “free zones” in port cities and in Quito and Cuenca, that would allow companies to bypass controls and regulation applied elsewhere. According to Lasso, these incentives would have generated thousands of jobs.
In his remarks, Lasso did not say whether he is considering invoking the “crossed death” which allows presidents to dissolve the Assembly and call new elections.