The export sector, through the Corporación de Gremios Exportadores del Ecuador (Cordex), joins other manufacturing unions in rejecting the abolition of electricity subsidies for the industrial sector to be applied by the Government and confirms that their abolition will negatively affect the competitiveness of the export industry, as well as the stability employment in the country.

Cordex reminded that with the subsidy that has been in effect since January 2018, the industrial sector has a rate incentive during working hours from 10:00 p.m. to 8:00 a.m. “The purpose of this measure was to promote the creation of jobs in the country, to encourage industries to use night shifts. Industries were paying a rate of $0.05 per kilowatt/hour during those hours and will now have to pay $0.075 per kilowatt/hour,” Cordex calculates.

Shrimp farmers and industrialists react to the end of electricity subsidies, classifying it as a ‘coup by the outgoing government’ and an ‘attack on the industry’

According to Cordex, the impact will be manifested through an increase in production costs by 10 percent due to the increase in the price of electricity. But what is most worrying is that 8 thousand jobs are threatened in Ecuador.

The decision to cancel the privilege is known from a letter signed by the Minister of Energy, Fernando Santos Alvite, addressed to Luis Bonilla, director of the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources.

In the document, Santos points out that appropriate analyzes were conducted on information that corresponds to the stated incentive. Based on that, he ordered to “implement the cancellation of this tariff incentive for the consumption of electricity in the industrial sector”. It is stated that the measure corresponds to the mechanism of encouraging energy efficiency for large regulated consumers in the industrial, commercial and service sectors.

The text specifies that “there are no plans to issue savings certificates for 2024, but they will be received during the first quarter of 2024 with the aim of including them in the price list guidelines for 2025”.

A single basic wage would be another blow to competitiveness

Meanwhile, José Antonio Camposano, president of the Cordex Board of Directors, stated that the measure destroys competitiveness: “The new increase in the price of energy for all industrial sectors that work at night is another blow by the government to national production! “. That is what he expressed in his report

2024 Base Wage: Employers Propose Increase of $4.12 According to Technical Parameters

The increase of the Single Basic Wage (Uniform Basic Wage) for 2024 is currently being analyzed by members of the National Work and Wages Council (HVNS), who have already met twice, but without consensus. The employer sector proposed an increase of $4.12 on the SBU currently in force, which is $450, while the labor proposal is to equal that of the vital basket, ie to $550, which is an increase of $100 on the current wage. .

Cordex indicated that he hopes that the authorities of the new national government are open to dialogue to find mechanisms of promotion, a manufacturing sector that promotes exports, unlike the current administration, “which has only devoted itself to increasing costs for Ecuadorian companies and foreigners who have invested in Ecuador.”