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Ecuador president hopeful Arauz would scrap IMF economic program

01/20/2021 | 02:02pm EDT

QUITO, Jan 20 (Reuters) - Leftist Ecuadorean presidential candidate Andres Arauz said in an interview on Wednesday that he will not comply with the conditions of a financing package negotiated with the International Monetary Fund if he is elected.

Arauz, 35, an economist who is a close ally of former President Rafael Correa, said he would continue making payments to bondholders but added that the country's social spending would take priority over debt servicing.

"The agreement with the IMF under the current conditions... will not be complied with, because they undermine Ecuadorean families and a program of economic growth in Ecuador," he said in a telephone interview with Reuters.

President Lenin Moreno agreed last year to an IMF package that required painful austerity measures, including cuts in government spending, personnel reductions, and a hike in value-added tax.

Ecuador on Feb. 7 holds elections for a new president and legislature.

A poll conducted this month by public opinion group Market showed Arauz as the front-runner, but that the vote would go to a run-off.

If elected, Arauz would advocate borrowing from Ecuador's own central bank if the country needed other sources of funding, he said.

He said he would respect existing mining concessions in Ecuador, a predominantly oil-producing country that has sought to develop its gold, silver and copper mining industry. But, he said, he would seek greater participation of local communities and would conduct a review to determine if mining companies were complying with environmental rules and investment plans.

He said he disagreed with the terms of a $3.5 billion financing deal with U.S. development lender DFC because it was predicated on project development through concessions to private companies.

He said such projects should be managed directly by the state. The DFC and IMF did not immediately respond to requests for comment. (Reporting by Alexandra Valencia and Brian Ellsworth, Editing by Rosalba O'Brien)


© Reuters 2021
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