Country risk remains very high despite the fact that the authorities claim that fiscal prudence is maintained and that the monetary reserve position is healthier, both of which are true.

Countries such as Colombia, Chile and Peru have experienced episodes of political violence. In fact, one of the two indigenous uprisings that caused us so much damage was simultaneously accompanied by terrible episodes of violence in Bogota and Santiago. Peru, for its part, continues with very high political instability, which has been going on for several years, accompanied lately by demonstrations in the streets. Why do those countries still have very acceptable country risk and we don’t?

Ecuador’s country risk exceeds 1800 points and remains unstoppable due to threats to impeach the president and mobilizations

The country risk of Ecuador is set at 1,709 points, almost a thousand points more than a year ago

There is a fundamental reason: all of them managed to have macro-fiscal goals that are already a national agenda, national goals. In none of them is there such a completely irrational structure of interest rates as in Ecuador, controlled not by technical but political aspects, and which encourages consumption rather than investment, which has variable passive rates and controlled active rates, and which produces irrational perverse regulatory arbitration.

There is a huge savings in Chile that comes from exporting copper. When its price rises above a certain level, savings are made, and when it falls below a certain level, the government injects funds to avoid recession. Likewise, the fund is used in the event of a major disaster, such as the last earthquake in that country. No president thought of wasting it.

In none of these countries do fiscal deficits occur beyond the goals agreed upon by society.

In none of these countries do fiscal deficits occur beyond the goals agreed upon by society. Fuel is not subsidized in any of these countries, creating an unmanageable fiscal gap. If Ecuador continues to subsidize fuel, the state treasury will not have the funds to pay the debt in the future.

In none of these countries is the state legally obliged to subsidize the pension system. If this continues in Ecuador, the country will not have money to pay its debt in the future. All of these countries have already reformed their pension systems, and the stock market is moving between 20 and 30 times the amount of resources compared to GDP that is moving in Ecuador. Country risk ultimately measures the ability to pay debt. Any announcement of a strike, with the world knowing that the Conaie leaders’ agenda is moving away from the major structural reforms needed to keep our economy viable and therefore solvent, produces an increase in country risk.

None of these countries have regressive subsidies that exceed 6% of GDP, that is, subsidies that deepen poverty, making society more vulnerable to violence and destabilization.

Let’s not complain about the risk of the country, let’s look inside, towards the irrationality of society, and remember that more than ten years ago, having the resources of the country to pay, it ignored the foreign debt, declared it illegitimate and did not pay. And that counts. Unless we change, country risk will remain high. (OR)