Between October 21 and 23, 70 personalities of different tendencies spoke about the need for the State to handle itself with fiscal responsibility.
The need for citizens to know the figures of the Government’s finances, to become aware of the lessons that the pandemic has left us in the management of these monies, and the need to maintain healthy public finances and thus be able to effectively serve those who need it most, has been one of the consensus reached the 70 participants in the fourth edition of Los Consensos de Cusín, held in Imbabura, between October 21 and 23.
The meeting, which was an initiative of civil society, called by Abelardo Pachano, Ruth Hidalgo, Pablo Lucio Paredes, Patricia Gualinga, Mauricio Pinto, Mario Ribadeneira, Cecilia Paredes and Jefferson Pérez, sought to generate dialogues on relevant issues in the country. This time it was the tax issue.
The Cusín Consensus has been carried out on four occasions. The first was in 1997 and its objective was to draw up the guidelines of the Constitution of 98. The second took place in 1998 and led to the signing of the Peace Agreement that ended the armed conflict between Ecuador and Peru. The third meeting in Cusín it found its base in the institutional crisis after the fall of Jamil Mahuad. Finally, After 21 years, the idea is taken up again, this time under the difficult economic situation that the country is experiencing.
Agree with Mauricio Pinto, businessman and former Minister of Economy and one of the conveners, The initiative arose in 2019, in conversations with Mario Ribadeneira, who was one of the founders of the Cusín Consensus at the end of the 90s. It had been thought, in the first instance, to hold a dialogue on the labor issue. However, the process was crossed with the stoppage of October 2019, and later it was difficult to specify it due to the pandemic. In the end it became clearer that a priority issue was the discussion on public finances.
According to Pinto, the meeting was productive, As basic issues were discussed such as where the State’s money comes from, how it is spent, painful questions about how resources are wasted and how subsidies go to more affluent sectors instead of being efficient and focused.
Explain further that It was not a political meeting or a “gathering of friends” as it has been described, especially from social networks. He assures that they were careful to invite academics, businessmen, social representatives, all citizens who met requirements such as regional diversity, different economic thoughts and gender equality.
For Pinto, the most important thing in an economy is to have the resources and not have to depend on debt. “It’s like in any family, when income goes down, expenses have to be lowered, and if one gets into debt, those resources must be invested in something that gives them returns but in the short term,” he says.. In the case of the State, the expenses include paying subsidies, but these cannot be forever and must generate revenues or results, he says.
Pinto assures that also the existence of a great evasion in the tax issue became clear and that the healthiest thing is to have a progressive system, in which the richest pay more, but in which everyone also pays.
Jaime Carrera, Executive Secretary of the Fiscal Policy Observatory, who was also invited, agrees that the dialogues that took place in Cusín, and that involved people from the left and right, produced a general consensus: “That regardless of ideology, you must have fiscal responsibility and fiscal sustainability, this is the nucleus to sustain social spending and so that in the future the economy can grow.”
A crucial point is to understand that before the pandemic there were already serious fiscal problems. Among the topics of discussion was the importance of society knowing the tax figures and understanding them. In the country, this issue is still very distant. Then, knowing the figures, propose the various solutions so that sustainability is generated. A turning point would be, according to Carrera, that civil society can understand the wounds left by the pandemic: unemployment, poverty, poor response in services such as health.
Explain that these could have been mitigated if Ecuador had previously maintained responsible fiscal policies, such as keeping savings. Now In the future, policies must be rethought so that the economy works. Society’s understanding of this issue is vital, but it recognizes that this knowledge is not yet widespread in Ecuador.
The various participants, including Patricia Gualinga, Mireya Pazmiño, Martha Roldós, Xavier Hervas, Oswaldo Hurtado, Augusto de la Torre, Jaime Carrera, Benjamín Carrión, Otto Sonnenholzner, María Paula Romo, listened to lectures by Andrés Velasco (former Minister of Finance of Chile), Mauricio Cárdenas (former Colombian Finance Minister), Santiago Levy (former IDB chief economist), Jorge Castañeda (former candidate for President of Mexico) and later participated in the discussions. Members of the Government were also present, such as Minister Simón Cueva and the manager of the Central Bank, Guillermo Avellán.
Within 13 points of consensus, participants said that They hope that the Government and the Legislature will mark the route that will lead the country out of this entrapment on the “basis of a State that does not spend more than what society can afford”, that it administers public resources with transparency and without corruption, that its social policy reduces poverty and that it does not mortgage the future or destroy nature. The fiscal and social agreement that we propose is not the solution to all the problems facing the country, but it is a fundamental prerequisite for doing so. “Civil society must monitor the fulfillment of this task, which will only be possible if we maintain a spirit of dialogue.” (I)
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