Getting the finance right
Over the last year, the single decision of restricting hiring through the so-called special regime, we saved the state USD450 million. In the same direction, to protect our public resources, we implemented an austerity program that removed or merged, depending on each case, 13 ministries and secretariats, in addition to other institutes and other lower-level entities. We reduced the salaries of government officials by 15% and of ministers by 20%, starting from the president of the republic, as it could not be otherwise.
At the same time, we improved tax collection. In 2018 alone, it was over USD15 billion, the best result in the country's history. This improvement included the taxing alleviation program, through which we helped more than 300,000 Ecuadorians make their tax payments. It was essential, furthermore, to reduce the fiscal gap. If we did not do it, the deficit could have increased up to USD8 billion. With the simultaneous effort of spending reduction and optimization, and through the increase of our own revenues, we were able to reduce it to USD3.5 billion. A reduction from USD8 billion to USD3.5 billion—that is acting responsibly.
The Prosperity Plan, as our economic policy is known, already has USD10.2 billion in foreign financing in long term and low interest for infrastructure and productive development. In addition, we can continue protecting the most needed and the excluded, those who are always forgotten. In 2018, we had USD1.4 billion in FDI, a record in our history. We also achieved local private investment commitments for USD9.5 billion for the next five years.
Banecuador has delivered USD1.75 billion and USD370,000 in credits. That is how we are helping to accomplish the dream of thousands of sisters and brothers to have their own business, through the programs People's Bank and Bank of the Street. The National Financial Corporation (CFN) has already lent USD1.3 billion, representing 40,000 direct jobs and thousands more in indirect jobs. Additionally, nearly USD110 million in credit from the National Guarantee Fund were awarded to 1,500 entrepreneurs. In 2018, public banks awarded 100,000 credits for the agriculture sector, totaling USD600 million. And in 1Q2019, USD156 million were added.
Additionally, USD450 million were used to transport more water to the fields through the Agua Segura mission: 116 projects of water and sanitation that benefited 2 million people in 94 cantons. Through the National Plan for Irrigation and Drainage, which provides more work and production in our field, we invested USD86 million in 178 projects for 100,000 peasant families. In line with continuing to carry resources for the economy, we increased social investment by USD400 million. Through the financial system, we will provide USD800 million for productive credit, which will enormously impact job generation.
Economic reforms to attract FDI
We need a modern taxing system that is aligned with the new dynamic of the state that is equitable, progressive, and promotes growth. We achieved investments for USD1.4 billion, in addition to the USD1.9 billion already committed by the signing of agreements to reactivate the oil sector. Additionally, in the 12th oil round, seven in eight blocks received investment offers for USD370 million for exploration and USD800 million more for development. Always thinking of investment in employment and productive activities, we renegotiated USD900 million in contracts with advantageous conditions for the country and retook the modality of participation contracts. We also carried out the most important oil development of the last three decades: Block 45, which will produce USD5.5 billion through 2021.
Regarding electricity generation, we inaugurated the hydroelectric plants Delsitanisagua, which had 275MW, and Minas San Francisco, with 180MW. We revived the project Toachi-Pilaton, which seemed impossible, and we will conclude the connection between Coca-Codo Sinclair and Guayaquil. We work across the country in solar power projects, including the sector of El Aromo, with a 220-MW capacity with a USD170-million investment. The project could cover more than half of the energy required by Manta. Additionally, we have wind projects, wind-generated energy, like Villonaco in Loja, which also will be included in the interconnected national system. And following the global trend, we have started to introduce electric buses and vehicles.
Some 32,000 direct and indirect jobs will be created from an investment already obtained of USD2 billion in the mining sector, which will surpass USD3.8 billion in 2021. The strategic projects and those of second generation will be developed through the responsible use of water under a strict control of environmental impacts. We will continue making responsible decisions in mining. During my period, more than 200 concessions that had been generously awarded were removed after irregularities had been found.
As for our campaign against climate change, the government's policy is clear: We ratified the Paris Agreement and presented to the UN and the Amazon Cooperation Treaty Organization the Amazonian Initiative to halt deforestation and protect the rights of our beloved indigenous peoples. I am an Amazonian myself; I was born in the jungle and am committed to taking care of nature and, at the same time, ensuring the generation of resources that the country requires. These are not contradictory.
Additionally, preserving nature makes great sense for the strategic development of tourism, which generates huge job opportunities for thousands.
With an annual average of 1.8 million visitors, tourism attracts USD1.9 billion and generates 300,000 jobs. Our post-oil future is the tourism sector in the most megadiverse and beautiful country in the world.
Infrastructure projects and PPPs
With an USD800-million investment, we built, rebuilt, and expanded 14 roads and five bridges. We started making the Quito-Guayaquil road corridor a reality. It is hard to believe that there is no highway between the two most important cities in Ecuador. We have to solve that problem by building a corridor that includes tunnels, lateral and elevated areas, as well as the project known as Tren Playero. Similarly, we have awarded a concession for the Machala-Guayaquil road and the Guayaquil-Salinas road. Additionally, we have a concession project for Guayaquil's south viaduct and the road corridor of Jujan-Quevedo-Santo Domingo.
I must mention the committed support that the government has provided to the construction of the metro in Quito. It looked as though the project was halted, but we made it possible through direct investment of USD400 million and a sovereign guarantee for an additional USD620 million. Quito will now have its metro. Also, with a financing of USD200 million, we revived the project of the tram in Cuenca.
Public-private partnerships save the state millions, but more importantly generate thousands of jobs. No matter what angle we take, all these actions together put our economy on the move.
The new face of Ecuador
Ecuador, today, is presenting a new face to the world. We promote our export offerings, investments, and tourism. Our international relations have been refreshed and are now based on the search of a commonwealth and not ideological affinities. They are to create new opportunities to develop the country. Non-reimbursable cooperation will reach USD400 million, and very soon Ecuadorians will be exempted from the requirements of the Schengen visa to enter EU and the EFTA countries. ✖
* Excerpt of a speech given at the National Assembly on May 24, 2019.