With 124 votes in favor, zero against, zero blanks and a single abstention, the plenary session of the Assembly decided to observe the budget pro forma in the second and final debate. Thus, the motion of the assembly member rapporteur Mireya Pazmiño was approved, who after a debate of around five hours asked to accept the conclusions and recommendations of the report of the Economic Regime Commission, which she chairs, and therefore, observe the proforma.
For five hours, the assembly members debated the inconsistencies of the proforma, criticized some macroeconomic precepts and certain reductions in some items with respect to the codified budget with a cut-off of August 2022, and many of them also criticized the payment of the external debt and the accumulation of international reserves.
The debate started from the report for the second debate that was approved with 9 votes in favour, that is, even with the votes of the assembly members of the pro-government bench, a few days ago by the members of the Economic Regime Commission. Nathalie Arias, a CREO assembly member, had explained in advance why the report had been endorsed and that in essence what it was doing was allowing a democratic debate and respecting diverse opinions.
Among the conclusions of the report, it was noted that the growth indicator in the proforma is optimistic, since it is calculated at 3.1% when other estimates consulted by Finance say that it will be 2.6%.
Said report also considers that the price of crude oil calculated is outside that estimated by international agencies. It is indicated that the WTI price (which is the marker for Ecuadorian crude, but with a penalty) has been calculated by the International Monetary Fund (IMF) at $85.52; by the statist company at $90.91; and by the International Energy Agency (EIA) at $88.58. Meanwhile, Bloomberg calculated three scenarios: $77 the minimum, $92.62 medium and $110 the maximum.
They consider that the price established in the proforma of $64.84 would not be in accordance with reality, but there would be no affectation for entities such as the GAD, since each quarter a recalculation is made for the liquidation of said income.
Thus, one of the plenary recommendations was to adjust the price of crude oil. However, the debate takes place in the midst of a sample of the volatility of oil prices at the international level. It is that crude oil fell last Monday to $77.24 and rose this Tuesday to $78.92. Both figures far from what the assembly members were asking for.
Meanwhile, on the oil issue, legislator Fernando Villavicencio made two recommendations regarding the proforma. On the subject of oil income, he asked the members of the Economic Regime Commission with what cost of oil production the proforma income was established. He assured that the treasury does not receive, as some assembly members think, $65 liquid to the proforma, but he assured that this is false. He explained that there are 22 signed oil contracts for which the State must pay an average fee of $33 to private companies. But they must also pay $10 for Petroecuador’s operating cost, $2 for Amazon Law, $1.75 for transportation, and $2 for marketing.
In this way, he said, it would be costing the State about $48 to produce each barrel. He recalled that these contracts were signed between 2012 and 2016, during the government of the so-called citizen revolution, and the company that has the largest Auca, Libertador and Shushufindi fields. For Villavicencio, one way to generate more resources for the treasury would be to renegotiate oil contracts.
Additionally, he recalled that the price of Ecuadorian crude has a penalty with respect to WTI. On the subject, he said that unfortunately a loss of around $5 is generated, which is taken by the intermediary mafias in contracts with Petrochina, Petrothailand and Unipec. He regretted that these damages have begun to be generated in the correísta government, that it has continued in that of Lenín Moreno and that they continue in the current one.
On the other hand, among the conclusions and recommendations to the proforma, it was requested that the calculations for health be supported, in order to verify the increase of 0.5% of the law. From what has been seen at the moment, there would be a lack of $186 million to meet that goal. It was also requested to allocate more resources to universities. In addition, increase the income for the Undersecretary for the Prevention of Violence against Women and that it reaches at least $18 million. And that the reduction in the budget for public works be reversed and an additional $118 million be assigned to it.
The pro forma, which amounts to $31,503 million, has a deficit of $2,629.9 million, that is, 2.1% of GDP. It also presents a deficit in the balance between income and permanent expenses of $1,460 million, but the assembly members recognized that this is not a breach since by exception they can be covered by non-permanent income.
In accordance with the Constitution, in case of observation of the proforma or four-year budget programming by the National Assembly, the Executive Branch, within ten days, may accept said observation and send a new proposal to the Legislature or ratify it. in his original proposal. The Assembly, in the following ten days, may ratify its observations, in a single debate, with the vote of two thirds of its members. Otherwise, the programming or proforma sent in second instance by the Executive Function will enter into force. (YO)
Source: Eluniverso
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