The government is not at the moment of announcing the closing of jobs in the public sector, on the contrary, it is waiting to reactivate employment with its first emergency law. And there is no decision on subsidies. The Minister of Economy and Finance, Juan Carlos Vega, talks about the work they are doing to cover the “huge deficit of the fiscal fund” that the new government took over on November 23, and how the Law on Economic Efficiency and Job Creation approved by the National Assembly will help them with pardons , retentions that will be immediate and the reprogramming of the ministry’s debt with the Central Bank.

With this law, how much of that $4,000 million debt or $5,789 million deficit they estimate will close in 2023 will they be able to cover?

The new tax law has two important aspects for the fiscal fund. The first is the issue of forgiveness, that is between 800 and 900 million dollars that could be given in the first months of next year. Withholdings must be calibrated sector by sector, but they help to have a more stable monthly flow that could increase the fiscal treasury by about $100 million per month. On the other hand, new investments, economic growth promoted by the law will also have a fiscal effect, initially it may have some fiscal sacrifice, but over time what the law promotes are very large investments in infrastructure, energy, which can bring much more taxes in that sense… I think he attacks several important points as a start, as the first signal when he moves with the Government.

Also debt re-profiling that will give them a break in their finances.

Of course, debt re-profiling over the next 18 months will reduce our cash requirements by about $800 million, which also helps us. Savings in some form on debt repayment to the Central Bank next year.

With all the remaining debts, how will these funds be completed?

We cooperate intensively with multilateral financial organizations, with the governments of friendly countries in bilateral, sovereign loans. We just had a meeting with the Canadian ambassador who also has support in this regard. But they will start happening during 2024.

And when will we knock on the door of the International Monetary Fund (IMF)?

We have a very close relationship with the IMF, at least one day a week I meet with them, we exchange opinions, comments, it was a very important ally for Ecuador, especially after the pandemic, Ecuador is perhaps one of the countries that received the largest loan that the Fund gave relative to its size. The IMF has been very supportive and they are here to help us put together a technical program that also allows us to access other sources of financing with other multilateral and other development banks.

But there is still no date for us to sit down with them and say we need the bridge loan that President Nobo requested in Washington?

We will probably visit Washington again in the second half of January, we plan to visit all the multilaterals, the State Department, which are all very important allies for moving Ecuador forward.

In the interview, you mentioned the subsidy plan, you gave a date for it to be ready. The last national strike in 2022 ended with dialogue tables and targeting parameters were defined, will you adhere to them?

It is not an announcement that these measures will be taken, not at all, simply as a technical government agency we must analyze all the alternatives we have at hand. One of the most important things we can do within the Executive Branch itself, and especially from the point of view of public companies, is to be efficient, to save costs. What the president mentioned is that we’re looking for, hopefully, more than $1,000 million in annual savings, all of that adds up. But as a technical entity we analyze the most important points that were discussed in the country and the obvious issue of subsidies, that there is a lot of money that goes out, but so far no political decision has been made to do it and have targeting mechanisms because what one of those issues wants is not to influence to the poorest, nor to give subsidies to the richest or to external entities that are smuggled. Studies are being done, tools are being presented…

That is, you come up with a plan. Doesn’t this mean that the Government has made a decision to cancel subsidies or to focus?

Not at all. No decision. Just as a technical organization, we first have to collect technical studies that have already been done and, on the other hand, present new alternatives, even multilaterals have shared alternatives from other countries that can be useful in this regard.

When they talk about billions of dollars in cuts, are they going to eliminate public sector jobs?

I don’t think we are at the moment when we need to announce layoffs because what we want by law is to encourage employment. The core of the law is the encouragement of quality employment based on investments, youth employment. I think that right now we are not in a position to lose jobs, but it is a process of restructuring the economy where the private sector can create employment through investments, so that maybe some people who are in the public sector can move there. . This time is a matter of internal processes, restructuring of some business costs, some inefficiencies that we identify.

When will they pay thirteen to the public sector?

The thirteenth for the public sector has already been paid. Part was paid yesterday (Monday), the other part was paid today (Tuesday) and we are going to at least make up the backlog, especially privileging smaller local self-government units, namely parish councils, then municipalities, and also counties. We made some additional emergency payments, important transfers were made to local governments. While managing resources, we adhere to the most urgent payments.