Lasso warns a Yasuní referendum ‘yes’ vote will require reduction of services, end of fuel subsidies

Jul 6, 2023 | 24 comments

For the first time, President Guillermo Lasso is warning that a victory for the referendum ending oil production in the Yasuní National Park will have dire economic consequences for Ecuador.

An oil production facility in the Yasuní National Park.

“A ‘yes’ vote will force the government to consider how the oil revenues will be replaced,” he said. “Or, we may be forced to reduce the budgets for essential services such as health care, education and law enforcement.”

He added: “Voters should think hard about their decision. This is probably the most important vote they will cast, more important than who is the next president and who joins the National Assembly.”

Lasso proposed another possibility for compensating for the loss of Yasuní revenue. “If the ‘yes’ succeeds, it may force us to eliminate the fuel subsidies, not just for gasoline and diesel but for LP gas as well.”

According to the Ministry of Finance, ending oil production and exploration operations in the Yasuní will cost the government at least $1.2 billion annually, not considering the cost of removing equipment and compensating contractors. “It is difficult to calculate the losses in block 43 and some experts believe they could be far more than the estimates,” Lasso said. “In addition, there is likely to be litigation regarding the unilateral termination of contracts.”

The president agreed that the government of former president Rafael Correa “probably committed fraud” when it rejected petitions to hold the referendum ten years ago. “If the law had been followed and the referendum had been allowed to proceed, we would not face the current situation. If ‘yes’ had won then, we would never have begun oil production in the park and would have found other sources of revenue for public expenses.”

He continued: “But what happened then cannot be undone and we have come to rely on the revenue to fund essential services. This is why I ask voters to study the question seriously before they vote.”

Two opinion polls show strong “yes” support of the Yasuní referendum — 55% and 60% — although the election campaign does not officially begin until the second week of August.

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