National Assembly takes up response to crime, gang violence; IMF warns that future borrowing will be ‘difficult’; Expat Pallanca’s mayoral bid ends

National Assembly President Virgilio Saquicela said Saturday he will begin meetings Monday to address gang violence and rising crime rates. “For most Ecuadorians, insecurity has become their major concern and I will meet with leaders of the various Assembly benches to build a consensus on how to confront the crisis.”

Saquicela admitted that last week’s police murders and explosions in Guayaquil and three other coastal cities have made the fight against crime and drug trafficking a top priority. “This is a problem that cannot be ignored and we must put aside other Assembly business to deal with it,” he said.

Five police officers were murdered October 31 and November 1 in Guayaquil and more than a dozen small explosions targeted police and other public facilities during the week. The violence followed the government’s decision to relocate more than 1,000 prisoners from the Litoral Prison in Guayaquil to a prison in Portoviejo.

National Assembly President Virgilio Saquicela

Luis Cervantes, assemblyman for President Guillermo Lasso’s CREO party, called Saquicela’s new interest in confronting crime “hypocritical,” claiming that Saquicela and the Assembly’s Correista bloc have paid little attention to crime in recent months. “They voted to clear the records of hundreds of criminals and then they refused to allow police additional authority to maintain law and order,” he said. “Now, suddenly, they realize that the people of Ecuador are furious at the Assembly for doing nothing and are demanding action.”

Saquicela called Cervantes’s charges “absurd,” saying he has been focused for weeks on the crime problem. “In the last two weeks, I have met with the Public Security Council and personally with President Lasso as well as other heads of state functions,” he said. “This is not a political issue. It is one that requires the cooperation of all parties.”

IMF warns that future borrowing will be ‘difficult’
Although it praised Ecuador for reducing its budget deficit, the International Monetary Fund said Friday that the country will face “serious hardship” in accessing future credit. It noted that the country has not had a balanced budget since 2009.

In a statement regarding Ecuador’s fiscal health, the IMF said that “belt-tightening” must continue. “President Lasso has made impressive strides to rein in spending during his two yeas in office despite political obstacles. It is essential that the government stay the course if it is to rebuild confidence both domestically and internationally,” the IMF said.

Lasso’s proposed 2023 budget projects a deficit of $2.6 billion, the lowest in 13 years. In total, the budget projects more than $26 billion in spending.

Critics have called the budget “draconian,” punishing education, health care and the country’s poor.

Finance Minister Pablo Arosemena says there will “very likely” be more funds available than the budget allocates. “We are using a conservative estimate for the price of oil but it would be irresponsible to count on more revenue given the volatility of the market,” he says. The budget is based on a $65 per barrel oil price, $20 below current levels. Over the past decade, royalties from oil have accounted for almost 20% of government’s funding.

Pallanca officially out of the mayor’s race
Cuenca restaurant owner and philanthropist Luca Pallanca will not be a candidate for mayor. The Electoral Dispute Court upheld the decision of the Azuay election board that Pallanca’s failure to vote in the 2021 national election and the fact he is not on voting rolls in the Cuenca canton were grounds for disqualification.

Two local polls taken in September showed Pallanca leading Mayor Pedro Palacios. A native of Italy, Pallanca had gained popularity through his donations of food and household goods to thousands of poor families in the area. He was also credited with negotiating the opening of a roadblock in Molleturo, allowing medical supplies to reach Cuenca, during the June strike.