In the news in recent weeks was the swap of $1,628 million of our debt for the issuance of a new loan of $656 million, representing a reduction in total debt of $972.74 million and a debt service savings of $1,121.54 million. As a result of this exchange and its issuance of blue bonds, $18 million per year for 18.5 years will be allocated to the conservation of the Galapagos Islands. Of that $18 million: $13 million goes directly to funding conservation projects and $5 million goes to a conservation fund to protect the Galapagos Islands and their marine life.

The government announces a debt swap for the preservation of the Galapagos Islands, which would save Ecuador more than 1,100 million dollars

The Galapagos have a history with regard to our debt: At one point in Ecuador’s history, the United Kingdom was proposed to sell them to pay off the debt incurred during the struggle for independence. Fortunately, this initiative did not pass.

Last week marked the 193rd anniversary of the birth of the Republic of Ecuador. However, our external debt is older.

eternal debt

After the Battle of Pichincha in 1822, the Republic of Ecuador ceased to exist. What at that time was Ecuador for 8 years, was called the Southern District of Gran Colombia (formerly Real Audiencia de Quito), which was under the command of the Prefect General who was General Juan José Flores. On May 13, 1830, through an act signed by the Assembly of Nobles of Quito, it was decided to withdraw from Gran Colombia, forming an independent state.

The news of a debt swap does not erase or limit it, but it is an innovative way to reduce it.

By 1830, the year in which the dissolution of Grand Columbia took place, the English debt was £6,625,950. Four years later, in December 1834, the Reference Agreement was concluded, in which it was established that of every 100 units of debts and claims of old Colombia, 50% corresponded to New Granada, 28.5% to Venezuela and 50% to Venezuela Ecuador 21.5%, that is, 1,424,579.25 pounds sterling. The Ecuadorian delegation did not attend this meeting on the distribution of the independence debt, which is considered unfair considering that the debt was contracted before Ecuador’s annexation to Gran Colombia. But there it was.

Between 1834 and 1854, Ecuador did not pay its independence debt to the British. By decree of November 24, 1854, the National Congress recognized 1,824,000 pounds sterling in favor of the debtors, in new Ecuadorian bonds of the consolidated foreign debt and in temporary Ecuadorian bonds. The guarantees of payment were customs duties, fiscal funds, land, alternative rents and the country’s debt on part of the old debt of Peru. And the rest is history. Our debt has only grown and today it is over 60 billion dollars.

Moratoriums and renegotiations have marked the last 98 years of debt

While we were a Republic, we were already in debt. We were born in debt.

The news about the debt swap does not erase or limit it, but it is an innovative way of reducing it, solving a global challenge such as environmental protection. This is the largest debt conversion for nature in the world and a success for the Republic of Ecuador, which is approaching its bicentennial celebration. (OR)