The effects of the closure of ITT will also be seen on unemployment

The impact of the closure of block 43 – ITT (Ishpingo, Tambococha, Tiputini) after public consultation is foreseen not only for the general state budget, but also for the work that these fields generate directly -915 workers from contractor companies – and indirectly, which are many more.

The Minister of Economy and Finance, Pablo Arosemena, gave as an example that around 400 people work in the drilling rig. The Central Bank report predicts an increase in the unemployment rate of 0.4% or more than 30,000 unemployed per year until 2025 due to the decrease in oil production and exports; while the workers pointed out that the communities’ economy is fueled by oil activities and that some operations earn them around $150,000.

In national consultation on Yasuní, local popular will of Orellana has no legal effect, say constitutional lawyers

The cessation of the exploitation of crude oil in the field located in the province of Orellana will happen as a result of a popular consultation, in which 58.97% of voters voted for the cessation of oil extraction, and 41.03% supported the continuation.

Operations in the block began at the Tiputini field in July 2016, followed by Tambococha in March 2018 and Ishping in April 2022.

The government will conduct analyzes and studies for the withdrawal of Yasuní, but the execution will be up to whoever wins the second round, says the energy minister

A report by Petroecuador, submitted by the Ministry of Energy and Mining, explains that “a monthly average of 915 direct jobs is registered in ITT, of which 71% correspond to local workers and workers from the sector’s communities. This would affect 915 direct jobs over the next five years”. This figure corresponds only to workers of contractor companies.

Likewise, it states that “contractor workers and their families receive an average of approximately $675,691 per month, which projected after nearly eight years” of work (since construction of Unit 43 ITT began) represents an estimated $64.8 million in wage income.

The Minister of Economy, during a dialogue on the radio foreverAs an example, he stated that there are 400 people working in the drill and that there are dozens of drills, and now with the results of the consultation there will be no more of them, so he wondered what will happen to the jobs there. “Will Leonardo DiCaprio come and will Mark Ruffalo give jobs to people who lost their jobs because they stopped extracting oil in an environmentally responsible way? I think that’s a question that the new ruler will have to answer.”

Minister of Economy: Will Leonardo DiCaprio, Mark Ruffalo come here to give jobs to people who lose their jobs because they stop extracting oil responsibly?

The Central Bank’s report indicates that “the Ecuadorian labor market would also be affected by a reduction in oil production and exports, a reduction in public investment and their impact on economic growth.”

In this context, it represents the estimated increase in unemployment for the period 2023-2025, which was obtained “under the assumption that labor productivity remains constant; this hypothesis is necessary to obtain new levels of employment in conditions of GDP losses. In this sense, it is important to mention that, in the medium term, there could be some shocks productivity that are not taken into account in the proposed scenario”.

By 2023, an increase of 30,693 unemployed people is expected compared to April 2023. “Since the proposed scenario does not consider any active policy to counter the effects of the non-use of block 43-ITT, the loss of jobs in the medium term is higher, since the expected levels of GDP -and by 2025 significantly lower compared to the results of April”, according to the Study of Macroeconomic Effects of Keeping Crude Oil from Block 43-ITT Underground for an Indefinite Time Published by the Central Bank this August.

Thus, the expected increase in the number of unemployed is 30,693 in 2023 with a rate of 0.4%, for 2024 the figure is 31,688 unemployed (0.4%), and for 2025 44,717 unemployed (0.5%).

For the calculation, they used the population projections of the National Institute of Statistics and Censuses (INEC) and it is assumed that the global labor market participation rate is constant for the period 2023-2025.

Oil activities also boost the local economy, according to what workers said when Petroecuador organized a visit to the area last June. So, for example, those who manage the boats that mobilize the employees of the state company and oil companies, from Coca to block 43, commented that this operation generates an income of about 150,000 dollars, resources that, according to the president of the community of Boca Tiputini, Marco Gref, use them for mingas and for helping people when they get sick, among other things.

There is also an association hospitality industry which provides catering services to an oil company and employs 34 workers.

ITT activates river transport, ‘catering’ and cleaning in communities ‘outraged’ by public consultation

According to Petroecuador, more than 50 local companies are present with transportation services, hardware, supplies, including the production of three-phase liquid separators (water, gas and oil).

It is also stated that it is the only company operating in the Yasuní area and that its activity directly benefits seven communities: the Waorani of Kawymena and the Kichwas: Sinchi Chicta, San Vicente, Puerto Quinche, Llanchama, Boca Tiputini and Puerto Miranda.

Questions and answers Elections 2023