President Guillermo Lasso dissolved the National Assembly using the powers granted to him by Article 148 of the Presidential Constitution of 2008. This measure is constitutional, as would his removal with 92 votes in the Assembly (Article 129). Legal debate on these issues aside, let’s consider the steps the president can take to put the country on the path to growth. There is no time to waste.

The advertising program must continue. The government has already signed agreements with Costa Rica, South Korea and most recently with our main trading partner: China. These measures are positive because in addition to injecting competitiveness into our economy, providing greater options and opportunities to Ecuadorian consumers and producers, they also represent links to the institutional framework that we lack. These contracts have proven to be an important deterrent against the protectionist impulses of populists, because closing down an open economy means going against all citizens who are used to having access to a universal range of products and being part of global supply chains. For example, AMLO failed to deprive Mexicans of the opportunity to work in maquilas or to have access to Walmart.

It is true that any treaty negotiated by the President must wait for ratification by the next Parliament. But the Government has to negotiate and sign the agreements, and only ratification in the Parliament is awaited. Even if the next Parliament is mostly from their opposition, it is not unreasonable to think that they will ratify them, as they have already done with others. However, because of this, it is important for the Government to remove non-customs barriers to trade, such as the INEN standard regulations, which have a clear protectionist intention, but do not ensure consumer welfare.

(…) The government must negotiate and sign agreements, all that remains is ratification…

A natural addition to dollarization and trade opening is financial integration. The reform must be presented for what it is: injecting competition into the national financial sector, putting local banks in competition with banks from the rest of the world. Ecuador has the potential to be an international financial center like Panama or Singapore. The Ecuadorian Institute for Political Economy presented in the assembly a bill during the Lenín Moreno administration that could be updated and implemented. Another simpler alternative would be to create a kind of free financial zone in which financial and tax regulations that are homologated to those of one of the world’s financial centers would be applied.

Financial integration would give Ecuadorians access to larger loans and put downward pressure on interest rates.

Finally, Ecuador needs labor reform. We need a more flexible labor market to make hiring workers in Ecuador less risky and more attractive.

It is true that the next government could undo the achievements of these months. But the existence of populist threats is not a reason to stop implementing reforms that allow us to progress. (OR)