On a national network, Jamil Mahuad announced the elimination of gas and electricity subsidies, a reduction in the diesel subsidy and the creation of the Solidarity Bonus to compensate it. It was September 1998. Six months later, in another chain, his government declared a bank holiday and, ten months later, dollarization.
The constant devaluation caused a new price lag and the effect was not maintained; the bond, yes, and in two decades the State has allocated more than $5.9 billion to pay it and another $4.6 billion in aid that has been incorporated over the years; This adds up to $10.5 billion, not counting the first seven years, of which the Ministry of Economic and Social Inclusion (MIES) does not have data, nor do the emerging bonds given in the pandemic.
Amarilis was then 26 years old and had two small children. She and her husband were unemployed. When she heard the announcement, she went to form the long line to register as a beneficiary. Every woman who was not affiliated with the Ecuadorian Social Security Institute (IESS) and who was the mother of at least one child under the age of 18 was going to receive that bonus of 100,000 sucres from November; and adults over 65, 50,000 sucres.
He began receiving it a few months later, as they initially gave priority to the elderly and pregnant women. And with that money she bought groceries and gas. Before Mahuad, the 15 kilo tank cost 4,900 sucres; With that announcement, he raised it to 25,000 sucres.
“The social impact of the program was monumental, because in a few weeks we had registered 1.2 million beneficiaries, which corresponded to 10% of the population at that time.” This is described by Mahuad in his book This is how we dollarize Ecuador. There it is explained that, if the economy had been dollarized, the measure taken on the issue of subsidies would have been maintained, because the price in dollars paid for imported gas and diesel would also have been established in dollars for the consumer. “Unfortunately, this measure could not be maintained because the constant devaluation of the sucre against the dollar quickly produced a new price gap.”
Today there are 1,446,164 beneficiaries: 70% of them receive this aid, which was renamed the Human Development Bonus; and the remaining 30%, the other monetary transfers created later: pensions for older adults and people with disabilities, which are $50, $100, $150 and $240. In addition to the bonus to minors for the violent death of their mother.
In 2021, $111,413.04 were delivered to minors who were orphaned by femicide
The MIES has data from 2006 on the bonuses delivered, although this system has been applied for 24 years by the six presidents who followed Mahuad. He mentions in his book the cost of the Bono Solidario program: $217 million annually ($58 million for two months, which was paid in 1998). For this 2022, $1,256 million are allocated in the budget.
In all these years they have helped alleviate poverty; not to eliminate it, but to reduce its effects (there are more than 5 million people who live with less than $84 a month). But the country has not managed to grow at high rates for them to come out of it; some have been earning more than twenty years and “they are going to retire with the bonus,” says Jaime Carrera, executive secretary of the Observatory of Fiscal Policy, who indicates that poverty in Ecuador has been at best 20%. of the population and is now more than 30%.
The middle class in Ecuador is shrinking and moves into vulnerability and poverty
And it is that in order to achieve this objective, it points to four elements: economic growth, attention to education and public health, delivery of cash and —basically— job creation. And in Ecuador there has only been the third, which is the bonds. For this reason, he considers that work must be done and a national agreement must be reached to achieve the other factors.
Mrs. Amarilis, now 50 years old, no longer collects it. When the Ministry of Social Welfare launched the credit program for the beneficiaries to set up their business, she applied and began selling kitchen items (cups, plates, pots) in her house. At first she did well, but then the clientele went down.
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The amount of the credit was deducted from the bonus month by month; this was for a year. He later wanted to renew the credit, but it was denied. And they also removed her from the list of beneficiaries. By then, she already had three children. She cashed in for about six years. “That bothered me, I had the desire to grow the business, and they kicked me out without giving me any reason. It only came out that I could no longer receive it, and I remember that all of us who gave us that loan and went to the Banco de Fomento office were kicked out.”
The venture lasted only one more year. She now works as a domestic worker, she earns the basic salary of $425 and is affiliated with the IESS.
During the pandemic, $255.5 million was earmarked for emerging bonds
Before the arrival of COVID-19, the State allocated $750 million for all the bonds. But since 2020 those resources have been increasing. That year of the pandemic, $927 million were paid in those assistances and in 2021 it increased to $1,243 million. A similar value appears in this year’s budget: $1,256 million, according to data from the Fiscal Policy Observatory.
Since April 2020, Family Protection Bonuses against COVID-19 began to be paid, of $ 120 and for four phases. With this bonus, $145 was also provided to the most vulnerable families in Galapagos who stopped receiving income due to the suspension of tourism on the islands.
In addition, the Nutritional Support Bonus of $240 and the Contingency Coverage for Economic Contraction of $90 were created.
Bonds are concentrated on the Coast
Guayas is the province that receives the highest government assistance with bonds. There are 285,593 beneficiaries, equivalent to almost 20% of the total number of people living in a situation of poverty, extreme poverty or vulnerability.
Other provinces of the Coast are also the ones with the highest number of beneficiaries: Manabí (13.80%), Los Ríos (8.65%) and Esmeraldas (5.80%).
While Pichincha is in fifth place, with 80,844 beneficiaries, which corresponds to 5.59% of the total, according to data from the Ministry of Economic and Social Inclusion. (I)
Source: Eluniverso
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