Ecuador -- Concluding Statement of the IMF Mission
January 31, 2003
1. An IMF team has been working in Ecuador since January 20 to complete the annual assessment of the Ecuadoran economy (Article IV consultation) and to discuss an economic program that could be supported by a new Stand-By Arrangement with the Fund. We have met with senior members of the new Government; officials in the Ministry of Finance, the Central Bank and other economic agencies; and representatives of the social and business communities. We would like to acknowledge the diligence, professionalism and courtesy of all those we have met, which has greatly contributed to help us complete our work.
2. The new Ecuadoran government has been very courageous in its first few days by quickly taking measures to address the difficult fiscal situation and has developed a comprehensive program of far-reaching structural reforms. Key components of the reform program include: civil service reform and tax reforms, which will help to contain public spending and ensure buoyant revenues; completion of the task of dealing with closed banks and return blocked deposits; and steps to improve the efficiency of public enterprises. Overall, this program will greatly strengthen the government's accounts and improve competitiveness, consistent with maintaining dollarization and sustaining healthy economic growth. A strong and stable economy will, in turn, provide the best basis for addressing Ecuador' social problems and raising the living standards of the poor.
3. Based on this program, the mission has reached agreement ad referendum with the authorities on a letter of intent and memorandum of economic policies. These documents are now being reviewed internally by IMF staff in Washington, and would then be submitted for approval by Fund management. The authorities' request for a standby arrangement would then be considered by the Executive Board of the IMF. We are working with the Ecuadoran government to complete this process as quickly as possible.