Some demand more information about the requirements of the IMF loan package

Feb 28, 2019

The government has provided few details about the $10.28 billion International Monetary Fund (IMF) loan package announced last week and some current and former officials are demanding more information.

Richard Martínez, Ecuador finance minister

Finance Minister Richard Martinez defended the reticence on Wednesday, claiming that full disclosure must wait for final approval by the IMF board of directors.

Former finance minister Jaime Vera, who says he is not necessarily opposed to the deal, insists that the terms of the agreement be fully disclosed as soon as possible. “There are strings attached to loans from the IMF and they can put severe restrictions on governments,” he says. “There are almost always requirements that tax revenue be increased and given Ecuador’s low level of taxation, I expect that to be the case here. I expect we will have an increase in the IVA tax, which is one of the lowest in Latin America.”

Gina Benavides, Defensoa del Pueblo

Vera said that Argentina is an example of what happens when the public is not fully informed about an IMF loan conditions. “The government kept information from the people and once they found out there were mass demonstrations that paralyzed the country. We need to avoid that in Ecuador.”

Ecuador’s Defensora del Pueblo, the national ombudsman office charged with defending the rights of the people, is also concerned about the slow release of information. Director Gina Benavides reminded the finance ministry on Wednesday that the loan package must be approved by the National Assembly following a full debate. “All the requirements for the loans must be made public as soon as possible,” she says. “It is the people who will bear the burden of new taxes and rules and they deserve to know the facts. I urge the ministry to release the information as soon as possible.”

Of the $10.28 billion in loans, $4.2 billion will come directly from IMF with the balance coming from the World Bank, the Inter-American Development Bank, the Latin America Development Bank, the European Investment Bank, the Latin American Reserve Fund and the French Development Agency.

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