The 3.5% annual growth of the Ecuadorian economy, which exceeded estimates, has generated optimism in the business sector but rejection in social and union organizations, which affirm that the majority of Ecuadorians live in poverty and question a labor reform promoted by the Executive. Presidential spokesman Carlos Jijón attributed the growth “higher than expected” to an “economic recovery” whose fundamental pillar was vaccination against COVID-19, which exceeds 12 million citizens out of a total of 17.6 million inhabitants. . In 2020, the Ecuadorian economy contracted 8% due to quarantines to curb the pandemic and the paralysis of a large part of the productive sector.
The economic analyst and professor Vicente Albornoz agreed that vaccination allowed the expansion of the economy by reactivating sectors such as tourism, gastronomy, entertainment, and transportation, among others. In dialogue with The Associated Press, he also highlighted the increase in world demand for oil, iron, bananas, cocoa, and shrimp, Ecuador’s main export products. Jijón also highlighted the recovery of 280,000 jobs although he acknowledged that a serious problem facing Ecuador is unemployment. To remedy this, the government announced a labor reform that it will send to the National Assembly in the first quarter of 2022 and that will seek to “facilitate the hiring of more Ecuadorians so that they have access to decent employment.”
The government’s goal is to reactivate the economy through foreign investment -which is estimated to be at least 30,000 million dollars in the four years of Guillermo Lasso’s mandate- and the elimination of the fiscal deficit, which has decreased so far during his administration. from $ 7 billion to $ 4 billion, Jijón added. For his part, the Minister of Production, Julio Prado, affirmed that in Lasso’s seven-month tenure, the country received 2.2 billion dollars in private, foreign, and local investments. The head of the Federation of Chambers of Industries, Pablo Zambrano, told AP that the economic recovery is reflected in the growth of exports, which reached 24,000 million dollars, 20% more than in 2020. Zambrano also highlighted the elimination of tariffs, which brought a reduction in costs in raw materials and capital goods, the return of Ecuador to the International Center for Settlement of Investment Disputes of the World Bank, and the setting of a trade agenda with countries such as the United States, Mexico, and China. Regarding the employment situation, Albornoz said that by raising the basic salary from $ 400 to $ 425, the government opted for “social peace”, another important element for economic growth.
But the optimism of the business sector is not shared by unions and social and indigenous organizations. Nelson Erazo, president of the Popular Front – which groups together various groups of educators, students, peasants, and workers – assured AP that the real situation of the majority of Ecuadorians does not reflect economic growth. “42% of Ecuadorians live in poverty and 35% of them are in extreme poverty,” said Erazo, adding that 1.3 million jobs were lost as a result of the pandemic, of which this year only 280,000 were recovered. The leader said that while the companies have had profits of more than 7,000 million dollars, there are Ecuadorians whose salary is less than the basic one and receive only 200 dollars a month when a basic basket has a cost that exceeds 700 dollars. This, he added, is the consequence of a law that allowed employers to reduce wages by up to 50%.
In turn, he argued that the labor reform proposed by the Executive will “aggravate” the quality of life of Ecuadorians because “it seeks to eliminate job stability, impose 12-hour workdays and six days a week”, with modalities of employment contracts. test for five months and four years to acquire stability, which will make working conditions precarious and will not generate new jobs. The unions announced for January a day of mobilizations and stoppages in demand that the national government understands that “the economic reactivation is not based on the fact that only the companies are well but that the workers are in better conditions,” said Erazo. The union demands coincide with the announcement of the Confederation of Indigenous Nationalities, which demands, among other points, the freezing of fuel prices.