Orlando Perez
Special for La Jornada
La Jornada Newspaper
Sunday, December 8, 2024, p. 18
Quito. After 81 consecutive days of blackouts, the impact on the Ecuadorian economy, in various sectors, already exceeds 8 billion dollars, despite the official discourse that the situation is improving and in December the energy suspensions would definitively end.
Considered the worst low water crisis in South America, the greatest impact has fallen on Ecuador, since its neighbors, Colombia and Peru, were better prepared with their thermoelectric park and planning for the use of hydroelectric plants. And the causes have been explained by some experts and focus on two elements: since 2017, there was no adequate maintenance of the thermoelectric plants and with it the energy crisis. surprised at the worst moment, but the political handling of the situation by President Daniel Noboa also contributed, who did not pay attention to the technical reports that already last February and March warned of a critical dry season and, consequently, half-empty hydroelectric dams.
The first symptoms emerged at the end of March and beginning of April, when several unforeseen blackouts occurred and emergency measures were not taken. Even the purchase of electricity from Colombia was not the most immediate solution, since that country also needed to supply its network and could not legally sell more than expected to another country.
Until the first half of November, according to data provided by business sectors, losses already amounted to 7.5 billion dollars. Of that total, until that date, the industrial sector recorded losses of 4 billion dollars. For its part, the commercial sector was affected by 3.5 billion in losses in a country of 17 million inhabitants.
Mónica Heller, president of the Quito Chamber of Commerce, has said in various media: The impacts are immense with the consequent impact on labor, as companies are laying off employees.
Heller acknowledged: The private sector does not want to fire its collaborators, and we are concerned about not having product on hangers during the Christmas period, we are trying to contain (these effects) at all costs. It is difficult to sustain productivity in these conditions.
In the recent two weeks, this cost would have already exceeded 500 million dollars, due to the drop in production, income from tourism, commerce and consumption in general. The president of the Chamber of Industries and Production (CIP),
María Paz Jervis disclosed in a message on her account on the social network We are facing an energy crisis with a high impact on all citizens, without exception. It is unprecedented that the announcement (of the electricity cuts) is made without planning and behind the back of the productive sector.
At the same time, he recognized that private initiative is working against the clock to identify contingency measures that preserve industrial activity.
A well-known businessman in the tourism sector, who prefers anonymity, told The Day which their union does not want to recognize, but the drop in the influx of foreign walkers is 80 percent so far this year compared to 2022, added to the 50 percent impact of the previous year, the situation is catastrophic. In this regard, Holbach Muñetón, president of the National Federation of Chambers of Tourism, explains that some hotels or restaurants in the country have electric generators, but those that do not have will have to close, since there is a high impact due to the cost of diesel. Others will have to invest in generators, says Muñetón, who commented that the price of each of these devices is from 3 thousand to 50 thousand dollars..
Financial relief vs. late payment
To mitigate, President Noboa, through Decree 444 of November 5, 2024, established that entities in the public, private and popular and solidarity financial sector may establish debt deferral programs for up to 90 days, so that deferred installments are moved to the end of the debt amortization table.
However, some small businessmen point out that with this the only thing that is done is stretch into the future a problem that is not going to be resolved in the medium or short term.
According to Heller, at least these financial reliefs seek to control defaults. In fact, in Ecuador, the balance of non-payments reaches 3.61 percent of active loans, as of October 2024, according to figures from the Association of Private Banks (Asobanca). That is, of every 100 dollars that a financial institution lends, 3.61 are in default.
The electricity deficit is between 1,000 and 1,200 megawatts; However, the installed capacity for electricity generation under Rafael Correa’s government was more than 7 thousand megawatts, which produced 14 hydroelectric plants and thermoelectric plants that only required 80 million dollars annually for their maintenance.
For experts, such as Fernando Salinas, president of the Ecuadorian Energy Forum, the lack of investment in new energy sources since the Coca Codo Sinclair hydroelectric plant came into operation in 2016, which supplies about 30 percent of the energy in the country, country, explains this serious situation that deeply affects small and medium-sized businesses that have less financial support.