This week there were blackouts in several sectors of the country. Photo: José Beltrán
Once again, the lack of electric power during the week that has just ended, exposes the tremendous fragility of the Ecuadorian economy.
It is no longer because of drought, but because the transmission system is collapsing, the country is left without this vital element for the development of the economy, which is electric power.
There are many factors that have led to the collapse of the power generation and transmission systems: improvisation, lack of maintenance, lack of investment, political use of technical positions, non-diversification of investments in the face of climate risks, and corruption in the contracting and operation of the sector itself.
But if one factor is the most important, it is the lack of resources, which limits investment, without which there can be no quality in either generation or transmission.
And the lack of investment comes from the fact that the State squanders resources in perverse subsidies, but also that the management of public finances pulverizes State enterprises and institutions.
The Treasury has the capacity to “negotiate” with public sector companies, with municipalities and prefectures, with public sector entities, the temporary use of the liquidity of all of them. Thus, for example, it can go to Petroecuador, or to CNEL, or to the Municipality of Ambato, and say: you have liquidity, I don't, let's make an agreement, you lend it to me and I will return it before closing the budget.
It turns out that these liquidity agreements are not paid, and then the companies and entities of the State have almost 4,000 million dollars placed in the central Government, which have not been returned within the fiscal year of a fiscal period.
These liquidity agreements then become a loan, which is often forced to be renewed, which goes against the whole philosophy and raison d'être of the liquidity agreements. The State asks for the use of the liquidity of companies such as CNEL, does not pay it back and uses the money to subsidize. What an absolutely perverse system! And then, the transmission lines fall apart.
But it is not only the use of the liquidity taken by the State that kills investment. Also the profits of these companies, which the State takes, and which should be for investment, evaporate in the budget expenditure.
And if this were not enough, when there was investment, it was abysmal, such as Coca Codo Sinclair, a project that still cannot be formally received by the State due to the enormous number of claims and technical problems it contains.
Ecuador cannot take small steps as a child, it has to face an adult task. Deep, radical changes, so that transparency in the accounts and the actions of the governments reflect the reality of things, and that the sun, which cannot be covered with a finger, is not covered up.
As we have said many times, either the major economic reforms (subsidies, pension funds, interest rates, labor legislation, reduction of the public sector) are carried out or the consequences, which are slowly being forged, will be fatal for this nation (O).
Source: eluniverse.com
