In an interview with La Hora, the foreign minister, Juan Carlos Holguín, assured that, after the official visit of President Lasso, there is all the political will to change the conditions of the debt and sign a commercial agreement
Juan Carlos HolguinForeign Minister said that Ecuador is at the best moment, both macroeconomically and politically, to achieve China two important goals. On the one hand, renegotiateand even make transparent the conditions of the contracts debt signed in previous governments, and that have been detrimental to the country.
On the other hand, through a kind of fast track, being able to specify this same year 2022 a trade agreement that promotes Ecuadorian agri-food production, and that underpins investment opportunities in the country.
China as a financier, according to Holguín, it is not a goal in the short and medium term.
Q: What exactly did the Chinese government commit to in relation to the renegotiation of the debt with Ecuador, especially in the contracts tied to payment with oil?
It must be understood that these contracts are effectively signed and shielded. Therefore, the objective of the trip was to find the political will so that Ecuador can present its proposal that these contracts can be renegotiate and open.
On the day of the meeting with President Xi Jinping, we went a step further. President Lasso gave a detailed explanation of how the collaterals of the debt are guaranteed in export oil companybut especially with intermediaries.
We are currently seeing the damage to Ecuador in the American justice system.
Q: Does that mean that the door was opened for you to be transparent and check everything?
It was specified that there are technical meetings to analyze the specific proposal of the Ecuador. The total amount of maturities is $5.2 billion. Of which, there is $4.1 billion to be paid over three years to 2024.
Ecuador has asked that those maturities be considered in a scheme of extension of the term of installmentswithout it being essential for there to be a drop in the interest rate.
On the other hand, there are some $2,000 million, within those $4,000 million, where the complete disengagement of the oil payments. This would generate income from savings in freight and intermediary expenses of more than $400 million annually for Ecuador.
Ten days before the trip, technical teams from the ministries of economy of both countries, together with the China Development Bank, the Eximbank and the country’s Bank of China, already worked in previous tables
I cannot give details about the negotiation, but we seek an agreement in which they have their payment guarantees (which will no longer be oil) and Ecuador have the guarantee that their interests are not harmed by contracts signed in previous administrations.
Q: In addition to renegotiating past commitments, are you also looking at new Chinese debt?
macro photography of Ecuador Now it is very different from previous years. I believe that one of the successes of this Government has been to be able to end the year with very important figures for the positioning of Ecuador abroad. As a result of this, last week we had a loan of $700 million from the World Bank. This type of credit is generally given to economies such as India or Mexico. They were achieved under historical conditions
Ecuador It will try not to seek debt, but when it needs it, especially for infrastructure projects, it will seek support from initiatives such as B3W (Build Back Better World)(B3W) in the United States.
There is no discussion about new mechanisms of chinese debtbut there is an openness to explore transparent options in good conditions in the future.
Q: So the bet is to make China a trading partner rather than a financier?
We are focused not on issues of debtbut to the importance of FTAwhich allows us to explore new Asian markets with a new silk route.
The main beneficiary sector will be agro-exporter that are already having a lot of success in China with products like shrimp, banana, pitahaya, broccoli, quinoa, among others.
The FTA It is a sensitive issue, due to the imbalance in the size of the two markets, but there is the political will to have an expeditious and transparent negotiation.
The important thing will be to have an attached room that can safeguard the interests of our industrial and agricultural producers. The small and medium are the ones who will benefit the most
There is already a negotiating team led by Minister Prado. This same week the fourth deputy from the private sector will be convened. The goal is to complete everything by November 2022.
Q: In which sectors are Chinese investments being sought and how will the mistakes of the past be avoided?
not only with China but with any country, the Government has put on the table that the hiring processes they must be transparent. Even within the Public-Private Alliances, contests will be held so that, for example, there is no possibility of direct contracting with public companies that were detrimental to the quality of the works and the financial interests of Ecuador.
Ecuador is interested in chinese investments in clean energy, mining, health, logistics, among others. Thus, one of the results of the official visit is that Sinovac is exploring Ecuador, among other South American countries, to set up a vaccine production plant. Not only for Covid, but also pentavalent, among others.
Also, a meeting was held with Alibaba, which is one of the main logistics operators in the world,
We have been able to hold these meetings when we are about to present our Investment Law, which has a strong component for some of these industries.
