Ecuador project 518-0116 · 1992

Project to support the Government of Ecuador's (GOE's) economic reform program, as well as its counter-drug efforts. The project consists of a cash grant of $6.2 million in ESF funds, to be provided in a single tranche, and conditioned upon GOE actions in the area of macroeconomic policy reform, privatization, and counter-narcotics. Macroeconomic conditionality, which includes fiscal, monetary, and exchange rate aspects, will stress inflation reduction, and in particular, reduction of the public deficit. Streamlining of public entities through personnel reductions, elimination of gasoline subsidies, and adherence to a fixed exchange rate, pegged at 2,000 sucres/dollar, are some of the actions which the GOE will undertake. The GOE will ensure that "social safety net" measures (e.g., cooking fuel subsidies, low cost basic foods and medicines, employment programs, etc.) are in place to ameliorate the negative impacts of economic stabilization efforts. The GOE will also adopt a program to reduce the size and role of the public sector in the economy. This will include privatizing up to 12 state-owned enterprises, and increasing private sector participation in executing public works a

Source: DEC abstract, PD-ABF-363 (1992). The source's own text.