Moreno’s economic plan called ‘confusing,’ faces strong headwinds in the National Assembly

Nov 13, 2019 | 9 comments

President Lenin Moreno’s massive economic reform law appears to be dead on arrival in Ecuador’s National Assembly and most legislators say there may be no way to fix it. Many claim that, by its sheer size, the plan is unconstitutional.

The National Assembly is considering President Lenin Moreno’s economic reform law.

The 190-page “Economic Growth Law” document contains 442 articles and provisions and requires the reorganization of 22 government programs and offices. To make matters worse, the emergency executive order under which the law was presented requires the Assembly to act on it within 30 days.

In addition to raising some taxes and closing tax code loopholes, the legislation would make changes to civil aviation and social security regulations, elder and weapons laws, restructure the university funding formula and rewrite the laws governing the Galapagos Islands.

“If I was being kind I’d call the package a potpourri but, to be honest, it’s really just a mess,” says former deputy finance minister Carlos Ramos. “I agree with the assembly members who say it is probably unconstitutional because it covers too many things. Even if there was support for it, I don’t believe it can be properly considered and debated in 30 days.”

An assemblywoman take a selfie during Tuesday’s session. (El Comercio)

A fundamental problem with the law, Ramos says, is that it attempts to please everyone and, in the end, pleases no one. “The president is under pressure from the International Monetary Fund [IMF], the business lobby, indigenous groups and creditors and it is impossible to accommodate all those constituents.”

According to Assemblyman Esteban Melo of the leftist Citizen’s Revolution bloc, the plan violates the constitutional rule that a proposed law can only deal with a single subject. “Because of this, I am asking the president of the assembly to throw out the legislation and ask the government come back with a coherent package,” he says. “Let’s debate raising or lower taxes but if we’re considering changing university rules this should be considered separately.”

Gabriela Larreátegui of the conservative SUMA party agrees. “As of now, we do not even know how to proceed with this. There are serious issues to be debated, especially regarding taxation, but the issues must be presented in a coherent way.”

She adds: “Practically speaking, there is only one item in the law that has unanimous support and that is the tax on beer.”

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