Reaction is mixed to budget cuts; Vice-mayor tests positive; Ecuador receives health system loan; Latam announces Ecuador plans

May 21, 2020 | 45 comments

The reaction to President Lenin Moreno’s budget cuts, announced Tuesday morning, ranges from outrage and threats of civil unrest to warnings that they do not go nearly far enough.

President Lenin Moreno

Alianza Pais National Assemblywoman Ximena Peña says she is most concerned about the impact of wage cuts for 40,000 public sector employees and the termination of 14,000 to 20,000 others who work for agencies that will be dissolved. “These actions will have a devastating impact on families trying to recover from the health emergency and their reduced spending ability will mean the economy will recover at a slower rate,” she said. “A slow recovery in the retail sector also means a reduction in production, affecting private sector jobs.”

Peña said she is also concerned about a lack of details regarding the elimination of the subsidy for gasoline and diesel fuel. “We need more protection for consumers and public and commercial transport services in the case of cost increases in the future,” she said.

Social Christian assemblyman César Rohón worries that the $4.3 billion budget reductions cover only 25 percent of the $12.7 billion shortfall. “We will need more cuts, much more, to overcome the crisis of overspending and waste that has persisted for years,” he said. “Yes, we are on the right track but the president needs to tell us how he intends to take care of the rest of the deficit and, in particular, pay down the national debt.”

Members of the Assembly’s Citizen’s Revolution bloc attacked the cuts for favoring the wealthy at the expense of the poor. “Attacking the working people and eliminating subsidies is all part of the Creole neoliberal plan to hand the country over to business interests,” said Assemblyman Pabel Muñoz. “The so-called Humanitarian Law that gutted the rights of workers was the first step of this plan and Moreno’s new measures are the second. The workers of Ecuador will not stand idly by. There will be trouble.”

Azuay Prefect Yaku Perez

Azuay Province Prefect Yaku Perez attacked the fuel subsidy elimination as a “sheep in wolf’s clothing,” saying the impact will be felt most directly by poor and middle-class Ecuadorians. “Fuel prices may be low now but they will rise in the future,” he said. “By making the change now, the government hopes to avoid the trouble of last October but I predict that more strikes are on the way as the Covid lockdown ends.”

Others worry about a “trickle down effect” of the budget cuts. “If the court upholds the 10 percent reduction to universities, many more people will lose their jobs and these losses are not being counted,” says Santiago Machuca, professor at the Central University. “And then there is the damage to students who will not be able to attend classes and could be denied a professional career. The damage of this will be long-lasting.”

Virus update

Vice mayor tests positive for Covid
Cuenca Vice Mayor José Pablo Burbano and his family will quarantine together for 14 days after he tested positive for the Covid-19 virus on Wednesday. “I call on all Cuencanos to take care of themselves and their fellow citizens during the time of the pandemic,” he said in a radio interview. “If we do, we will be able to resume our normal lives much sooner.”

Latam Airline announces its Ecuador plans
Latam said Wednesday that it planned to resume operations in Ecuador at a reduced level “sometime in June as determined by the government.” The airline said the first flights would be on its Quito-to-Guayaquil route but at less frequency than before the Covid emergency. “We will increase our schedule gradually as economic conditions permit,” the airline said. “We will follow all necessary safety protocols to protect passengers from the Covid-19 virus as recommended by the government and international health authorities.” Last week, Latam announced a second round of employee layoffs but said it would rehire workers in the future as appropriate. In addition to the resumption of national service in Ecuador, Peru, Chile and Argentina, Latam said it would begin international service in June or July.

Ecuador receives $250 million to strengthen health care
The Inter-American Development Bank has approved a $250 million loan to help Ecuador mitigate the effects of the Covid-19 virus on its health care system. The Bank said funds can used to bolster the country’s public health system in general as well as to combat the coronavirus specifically.


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