WASHINGTON, Dec 20, 2019 (BSS/AFP) – The International Monetary Fund on
Thursday approved a delayed loan tranche for Ecuador, releasing nearly $500
million under a three-year aid program.
The IMF board gave the go-ahead for a $4.2 billion loan in March to help
support the oil-rich nation’s economic reforms, but massive protests lead by
indigenous groups erupted in October when President Lenin Moreno scrapped
fuel subsidies, causing gasoline prices to soar.
Protesters blocked roads and oil facilities in the Amazon for almost two
weeks, halting distribution of almost 70 percent of the country’s crude oil.
Moreno is struggling with an economic crisis that he blames on waste and
corruption by his predecessor’s administration, and Congress in November
rejected his initial tax reform bill before approving a modified version in
early December.
The IMF statement made only a glancing reference to capital city Quito’s
difficulties, saying authorities “have appropriately recalibrated their
economic program to include a more moderate fiscal consolidation… in
response to recent developments and to protect pro-poor growth and social
spending.”
“Protecting the poor and increasing the social safety net are central
priorities in the government’s program,” Mitsuhiro Furusawa, the fund’s
deputy managing director, said in a statement.
And he said the government’s “recently approved tax reform will raise
revenues and make the tax system more growth-friendly, simple and equitable.”
The IMF conducts periodic, generally quarterly, reviews of a country’s
performance under the loan programs, including passage of agreed reform
measures.
The board approval Thursday combines two reviews, releasing a total of
$498.4 million to the government.