Recently, serious analysts questioned the fiscal deficit figures. The minister says one thing, the analysts say another and claim that the deficit will be bigger.

Many have asked me who is right. My answer is “unreason”, because this issue of the deficit, which is already common, and which will continue to grow more and more, is the result of society’s lack of understanding, much more than the management of ministers or governments.

The fiscal deficit in 2023 will be close to 2.819 million dollars, assures Minister Arosemena and contradicts analysts’ figures

A society that has in its DNA: “cut taxes, give me subsidies and invest more” is simply crazy.

In 2015, this columnist wrote a book entitled Detonating and Non-Causing Petroleum, in which he showed that the source of the crisis already looming in Ecuador is not the drop in the price of oil, but the gigantic growth in public spending, which rose from 23% of GDP- and to 43% between 2007 and 2014. That jump, in just seven years, was the largest made by a country in Latin America, more than Hugo Chávez’s Venezuela, more than the Kirchners’ (Néstor and Cristina) Argentina, or Lula’s Brazil Silva. But not only in that wave of the invasion of socialism of the 21st century, no one doubled public spending, but no one reached 43% of spending in relation to GDP. Namely, during that period, Ecuador became the country with the highest public consumption in relation to GDP on the continent and the fastest growing one.

A large part of this brutal consumption consists of perverse subsidies, which the “irrationality” of society has not dismantled.

Ecuador’s debt rating falls again days after the election of a new government

The deficit is already becoming unmanageable and analysts have rightly noticed this, and as a result of the growing illiquidity of the Ecuadorian Social Security Institute (IESS), this deficit in synergy with the cash situation of the social security pension fund, becomes an explosive cocktail, which with the lit fuse of lack of funding (we closed external financing) makes this deficit toxic and deadly.

We squandered the best opportunity we had between 2007 and 2014. There is no room for trifling today.

The recipe for a Civil Revolution would be simple: if they arrive, take over the Monetary Reserve, negotiate with the phone companies to get cash, hand over the Sacha field, on terms that are surely more shameful than the contracts awarded. in the past, which have been terrible for Ecuador, and thus could give a sense of relief, spending until the next election. The problems will not be solved, and then by 2025 the situation will be infinitely worse.

The results of the presidential election reduced country risk for Ecuador, but the results of the Yasuní consultation increased it again

If the second option wins, I hope it will reveal the truth to the country and produce the only recipe that can work: a societal agreement to solve the structural problems, which, as explained on a previous occasion in this column, align the stars in such a way that we can come to economic, political and social situations that can be as painful as the episodes of 1999.

We have years of low growth, years of stagnation. We squandered the best opportunity we had between 2007 and 2014. There is no room for trifling today. (OR)