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Ecuador receives first disbursement from the IMF amid criticism

Quito, June 5 (Prensa Latina) Ecuador today received the first disbursement of a billion dollars of credit with the International Monetary Fund (IMF), amid criticism of that decision by the National Government.

This Wednesday, the manager of the Central Bank, Guillermo Avellán, told the digital portal Primicias that in December 2024 or January 2025, the IMF will deposit another 500 million dollars, if the Executive meets the goals of the agreement.

The agreement of this South American nation with the IMF to access a questioned credit of four billion dollars includes a tax reform and the elimination of subsidies, as stated in the agreed document.

As part of the alliance, the Government of President Daniel Noboa will have until mid-November 2024 to present to the IMF a plan aimed at increasing tax revenue with measures to “rationalize inefficient tax expenditures.”

Now the IMF demands “permanent and high-quality” tax measures that replace temporary ones, including the collection of taxes on banking and cooperative profits, which will only be paid in 2024.

Added to these conditions is the Ecuadorian Executive’s promise to eliminate the fuel subsidy, which for the Ministry of Finance implied an expense of $3.2 billion in 2023.

Members and indigenous organizations here today maintain their rejection of President Noboa’s policies, “which affect the majority of the population,” they warned.

This Wednesday, the Confederation of Peoples of the Kichwa Nationality of Ecuador (Ecuarunari) issued a statement denouncing measures such as the elimination of fuel subsidies.

Ecuarunari stressed that the governments of former presidents Lenín Moreno and Guillermo Lasso agreed to debate the issue of targeting subsidies due to the social pressure exerted during the popular uprisings of 2019 and 2022.

However, they warned that Noboa’s argument is that targeting distorts the market.

This measure does not seek to solve the economic crisis that the country is going through, since its intention is to guarantee the IMF loans and the corresponding payment of the external debt, Ecuarunari reiterated.

For its part, the Confederation of Indigenous Nationalities of Ecuador (Conaie) also questioned the measures adopted by Noboa in six months of government and warned that the ruler is applying the same recipe as his predecessors, Moreno and Lasso.

The members of Conaie warned about the intentions of wanting to free fuel prices and considered that this measure only deepens inequality and the crisis, representing a new blow to the economy of the majority of Ecuadorians.