Due to the results of the recent elections, I will make a summary comparison of the political-economic situation between Ecuador and Argentina, in order to conclude that in both countries we have the opportunity to strengthen the economic model in freedom, which generates employment, health, security, education, housing and the well-being of citizens, starting from December 2023

Neither Javier Milei nor Sergio Massa won the first round: an analysis of the electoral situation in Argentina

If Javier Milei triumphs in Argentina, he offers to implement a strong restructuring of the state, keeping only eight ministries: economy, infrastructure, human capital, foreign relations, security, defense, interior and justice, plus the chief of the General Staff.

(…) he must implement urgent measures in the first six months of his mandate because there are high expectations in the country.

In order to better understand the economic situation, I mention a few macroeconomic figures that illustrate some of the differences: the country risk in Argentina issued by JP Morgan in September was 2400 points, while in Ecuador – on October 20 – it was 1750, and in Peru 200 points; According to IMF data, in October 2023 Ecuador’s real annual GDP – projected until December 2023 – would be 1.4% and inflation 2.3%, and for Argentina it would be GDP -2.5% and inflation 121, 7% per year. Annual commercial interest in Argentina is around 133%, and in Ecuador 10-15%, depending on the segment. General poverty in Argentina exceeds 40%, and in Ecuador 25.2%.

Massa vs. Milei: 3 factors that will define which of the two will be the next president of Argentina

Taking into account these data, in both cases we must focus on endogenous problems (which can be controlled) and, in the Ecuadorian case, with the new young leader, clearly diagnose the economic situation he is getting, focusing on: 1. – Attracting direct parties investments in oil and natural gas to increase production and reserves; This will promote the reduction of country risk to acceptable levels; 2.- Restructure the control bodies of the financial system – there are many institutions without proper coordination; 3.- In order for interest rates to drop to the level of Panama and the USA, there must be greater competition: (according to the IMF in its recent report, the financial system is concentrated in four large banks -57% of total assets-) ; 4.- Without stable energy and with reasonable costs, there will be no GDP growth; 5.- Research and exploitation of natural gas from the Gulf of Guayaquil is essential, because we will have cheap energy that pollutes the environment less and with the possibility of reducing subsidies for diesel; In addition, natural gas can be used to produce urea, vital for agriculture; 6.- IESS intervention to diagnose its real situation and change its processes using artificial intelligence; 7.- Renegotiation of external debt, as a result of the effects of the El Niño phenomenon, which could exceed 1000 million dollars in 2024.

Low country risk after Daniel Noboa’s triumph, a ‘tepid’ reaction from the international market, which remains nervous about the 2025 elections.

The new government under the leadership of Daniel Noboa must implement emergency measures in the first six months because expectations are high and it must maintain its credibility. It must be radical against corruption, insecurity and improving the public procurement system. In June 2024, we will write again about how Milei and Noboa fared and we will be able to compare better if Argentina is dollarized. (OR)