QUITO – Guillermo Lasso, who unexpectedly won the Ecuadorian presidency on promises to revive an economy plagued by the coronavirus, vowed on Monday to eliminate the fiscal deficit and revamp oil deals.
Lasso, a banker, took 52% of the vote in the run-up to a campaign to assert his free economy against economist Andres Arauz’s promise of a return to socialist greatness. Lasso’s victory was probably aided by a campaign spoiling the ballot, invalidating one in six ballots.
Markets welcomes the news after months of concern that Arauz’s social spending plans will upset the government’s delicate finances. Ecuadorian bonds rose Monday morning, according to its traders’ notes in July 2035 which was the highest level since September.
The International Monetary Fund (IMF) has recommended increasing value-added tax as part of its $ 6.5 billion rescue package for the Andean country. But Lasso ruled it out on Monday, though he said he still intends to eliminate the fiscal deficit within four years.
“We are not going to raise taxes, we are not going to raise VAT,” Lasso told reporters. “We must be ambitious and achieve a deficit of zero in four years’ government. We will not be dependent on debt. ”
The 65-year-old Lasso, who takes office on May 24, will have to find ways to get a set economy going while using the same pro-market book as President Lenin Moreno, which has sharpened government finances, but struggled to create jobs. and did not call for re-election.
Lasso said he would also propose new risk-sharing contracts with private companies in the country’s main oil sector to increase crude production, although he said he would respect all contracts with companies currently operating.
He also told reporters he was wary of oil drilling in the Yasuni National Park in the Amazon region of Ecuador, and said he supported an audit to determine the cost of environmental restoration to determine whether the extraction from the oil wells was really is profitable.
FREE TRADE AGREEMENTS
Lasso’s third campaign for the presidency was to raise foreign investment to create jobs and to expand investment in the agricultural sector. On Monday, he pledged to pursue free trade agreements with several countries, including the United States and China, to attract investment.
“I hope he keeps his promise to create jobs, because seven out of ten Ecuadorians want formal jobs,” said Juan Pablo Hidalgo, 33, a neighborhood activist in Guayaquil, Ecuador’s largest city. “This is a moment when we all need to be united.”
In contrast to his fighting style on the campaign, Arauz accepted mercy on Sunday.
But on Monday morning, he put an end to ‘political persecution’, a reference to the absentia conviction of his mentor, former President Rafael Correa, on charges that he accepted bribes in exchange for public contracts.
“We will not prosecute anyone,” Lasso told reporters, adding that he would make the justice system work independently.
Lasso will also face a significant challenge from Yaku Perez, an indigenous leader who nearly made the presidential election over an environmental platform that includes a proposal to ban industrial mining.
Perez led a ballot box campaign in Sunday’s election that led to an increase in zero votes and possibly helped Lasso’s unexpected victory.
Perez’s Pachakutik party will be the second largest in Congress and could be a major obstacle to Lasso’s economic development plans.
Any economic setback will rest on a restructuring of the country’s designated COVID-19 vaccination campaign, plagued by allegations of nepotism and a revolving door of resigned or dismissed health ministers.
“We hope he leads the country in the right way, and that money is well invested,” said Katerina Ramos, 19, a Guayaquil student.
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