Ecuador’s presidential candidates are promising gifts to voters they probably can’t deliver on, according to political analysts.
Both Lenin Moreno (Alianza País) and Guillermo Lasso (Creo) say they will create hundreds of thousands of new jobs, 800,000 and one million, respectively, but Juan Morona said such numbers make little practical sense. “In the first place, where is the capital, either from private enterprise or the government for these jobs?” he asks. “Second, is there really the need considering the skill level of the work force? Lasso says the jobs will come from stimuli to businesses but this will take years considering the current depressed state of the economy. Moreno says his jobs will be higher paying but how does he upgrade worker skills in the short term? The candidates say the jobs will be created in four years, which is totally unrealistic.”
On Saturday, Moreno promised to established a “People’s Bank” to provide small loans to self-employed entrepreneurs and vendors in small communities. The loans of up to $20,000 would be paid back over a 15-year term. In the same speech, he said he will build 40 technical schools to teach new trades to workers in depressed areas. Earlier in the week, he said he would increase the Human Development Bonus — also called the “poor bonus” from $50 to $150 a month.
According to political writer Julio Echeverría, the poor bonus was targeted for phase-out by President Rafael Correa. “Correa correctly called the bonus an anachronism and an insult, and said it should be replaced by a program to train the poor for better jobs.” As for the funds for new technical schools, Echeverría asks: “Where is the money?”
In several recent speeches, Lasso promised to maintain the government gasoline and LP gas subsidies even though they cost the country several billion dollars a year. “This is entirely unrealistic,” Echeverría says. “Three months ago, Lasso made the point that the country cannot afford the subsidies and should let the market dictate prices. This is money the country desperately needs for basic services.”
Since the February 19 election, Lasso has also promised to allow local communities to vote on mining and oil extraction projects in their areas. “This will deliver votes, especially from indigenous communities in the Amazon and Azuay and Loja Provinces, but it will mean the government relinquishes one of its major sources of income since, obviously, people will vote against the projects,” says Vicente Albornoz, economic analyst and professor at the University of the Americas.
Albornoz says that the campaigns have created an atmosphere of “unreality” that both candidates exploit. “This is the political season and promises are expected. The problem is that Ecuador’s economy is in recession and many of the promises are simply not practical under current conditions. Some of Lasso’s tax cuts will stimulate business but others will simply remove revenue needed for roads and education. On the other hand, Moreno says he will continue programs that have increased the national debt and are simply unsustainable.”
He adds: “Unfortunately, it looks as if the country will not face economic reality again until after the election.”