Ecuador to propose to China the renegotiation of its debt

RIO DE JANEIRO, BRAZIL – Ecuador will propose to China the renegotiation of the payment of its debt of about US$5.2 billion during a forthcoming visit of President Guillermo Lasso to Beijing, said Foreign Minister Juan Carlos Holguín on Monday.

The conservative ruler will travel to China on February 3 to meet with his counterpart Xi Jinping and “deal transparently and directly with the debt payment mechanisms we have today, ” said Holguín in a virtual press conference.

She hoped that Quito “could make a proposal on the payments of that debt”.

The minister added that most of the liabilities must be paid by Quito in the next three years.

Ecuador’s external public debt was approximately US$47 billion, equivalent to 45% of GDP, last October, according to the most recent data from the Central Bank.

The visit of Lasso, a former banker who took office last May, also points to the signing of a memorandum of understanding to initiate the process of a trade agreement with China, Ecuador’s largest creditor in terms of inter-country debt with 12% of the total.

During the government of former socialist president Rafael Correa (2007-2017), Beijing became the main financier of Quito, whose economy has been affected by the fall in oil prices, the main export product, and the covid-19 pandemic.

In September, Lasso announced his intention to meet with his Chinese counterpart with a view to negotiating a trade agreement to increase the sale of bananas and shrimp, the main Ecuadorian products for sale.

With information from AFP