Ecuador: the government announced that it will not forgive debts of up to 10,000 dollars as indigenous groups have been demanding

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Government authorities have indicated that this measure is unfeasible. An indigenous organization threatens a new mobilization

Ecuador: the government announced that it will not forgive debts of up to 10,000 dollars as the indigenous groups are demanding

By

Yalilé LoaizaFrom Quito

Ecuador: the government announced that it will not forgive debts of up to 10,000 dollars as the indigenous groups have been claiming

The Minister of Government, Francisco Jiménez, announced that the Ecuadorian public bank will not forgive debts of up to USD 10,000. Jiménez was the representative of the Executive during the dialogue tables with the indigenous sector, which were installed after the protests of June 2022. (REUTERS/Adriano Machado)

Given the demand of the National Confederation of Peasant, Indigenous and Black Organizations (Fenocin) that the President of Ecuador, Guillermo Lasso, order the public bank to forgive overdue loans between USD 3,001 and the USD 10,000, the Ecuadorian government indicated that these debts will not be forgiven, although they will propose other financial relief mechanisms.

In an official statement, the Government Ministry indicated that “There is no financial viability to increase said mechanism” and he assured that “restructuring and rescheduling facilities, as well as access to credit under preferential conditions, as the National Government has been implementing, are maintained.”

The government minister, Francisco Jiménez, referred to the cancellation of debts on the morning of November 23 in the media outlet Ecuavisa. In the interview, Jiménez pointed out that the government has forgiven around 26,000 loans of up to USD 3,000 in Banecuador for an amount of more than USD 58.8 million: “There is a forgiveness process, the ceiling is established up to USD 3,000, in that In this sense, 26,000 operations have been carried out”, assured the Secretary of State.

Ecuador: the government announced that it will not forgive debts of up to 10,000 dollars as the indigenous groups have been claiming

Debt forgiveness up to USD 3,000 is in force, but an indigenous organization demands that the benefit be extended to debtors of up to USD 10,000. (BanEcuador)

For his part, the Minister of Finance, Pablo Arosemena, reported that Banecuadorr cannot forgive overdue debts of up to USD 10,000 as that decision would affect the bank's ability to grant new loans. This measure would prevent the public bank from receiving USD 190 million in income: “As the Ministry of Finance we are members of Banecuador's Board of Directors and we are not going to support this measure,” he assured.

The Fenocin, which warned of new mobilizations in case the government does not agree to its request, also asked for the cancellation of overdue debts at BIESS, which is the bank of the Ecuadorian Institute of Social Security .

Given this demand, the expert lawyer in Social Security, Patricia Borja, explained on her Twitterthat current regulations, both in the Law that governs BIESS and in the Constitution, prevent this type of action. The first regulation, in its article 22, prohibits the Bank from forgiving the obligations in its favor. While the Constitution “provides that no State institution may intervene or dispose of funds and reserves, nor impair the assets of the Social Security Institute,” according to Borja.

Ecuador: the government announced that it will not forgive debts of up to 10,000 dollars as the indigenous groups have been claiming

The Fenocin has announced new mobilizations in case the government does not forgive debts of up to USD 10,000.

The expert sent a message to Gary Espinoza, leader of the Fenocin and indicated that “it is improbable and unheard of that a leader of an organization proposes and rather, demands, under pain of new mobilizations, the application of measures without any support.”

Fenocin called, but immediately suspended, a set of new protests for last November 15 in four coastal provinces of Ecuador, with the intention that President Lasso sign an executive decree that allows modifying the content of the Fiscal Sustainability Law to forgive debts of up to USD 10,000 with public banks.

After learning of the government's announcement about the refusal to forgive public bank debts up to USD 10,000, the leaders of Fenocin spoke out.

Ecuador: the government announced that it will not forgive debts of up to 10,000 dollars as the indigenous groups have been claiming

Then After 18 days of protests, which took place in June 2022, the Ecuadorian government and the indigenous movements signed a peace act to analyze the demands of these organizations.

The leaders of the Fenocin assure that the National Government has broken its word despite the fact that this proposal was dealt with in the dialogue tables that were mediated by the Ecuadorian Episcopal Conference.

Likewise, the Fenocin insists that the government must order the cancellation of debts not only in public banks but also in private financial institutions.

The organization has described as “a mockery the failure of the National Government to sign the Executive Decree for the forgiveness of debts of up to USD 10,000″. Espinoza indicated that on November 24 the members of Fenocin will meet to call for a regional mobilization.