Ecuadorian Government to Renegotiate Foreign Debt and Change Budget
Ecuador"s President Alfredo Palacio stated Friday that the Government needs to improve the distribution of budget funds, and restructure the servicing of foreign debt to boost social development in the country.

¿Only this way we will give an answer to the people, 80 percent of whom live under the poverty line,¿ Palacio stated in comments for national radio stations.

¿Economic-social and cultural rights are enjoyed by only 20 percent of the citizenry, which is a big mistake,¿ he added.

The Head of State criticized the fact that social investment in the country is 80 dollars per capita when in other countries of the region it reaches 500 dollars.

Such numbers prove there is no contribution to human development, he emphasised, whilst also expressing his desire to have a true democracy.

Referring to the 6.6 percent economic growth attained in the country in 2004, he said it was fictitious, because the revenues came from the sales of petroleum and the remittances from Ecuadorian resident abroad.

"This means we live without working, and thanks to the high prices of oil in the international market," he noted.

The Head of State expressed his support for the better management of natural resources and a better distribution of state budget.

He warned it is impossible to use 40 percent of the country´s income to pay foreign debt, since the money is needed to boost productivity and society.

"The Executive has the mission of investing resources in four basic sectors: health, education, social protection and productive reactivation," he said.

"If I invest in health, I am going to increase production; if I invest in education, I am going to increase production, but to achieve that goal we need to reactivate production," he added.

Palacio said the only factors which really influence macro-economy are production and employment.

"That is why I do not say I am going to increase the number of jobs, this is not about opening new posts, it is about opening to production and subsequently I"ll have the rest," he highlighted.

Re-structuring the payment of the foreign debt does not mean the country stops paying, but that "we need to work out the math well and know how we can pay it," he stressed.

He hopes to be presented with a redistribution of the Fund of Stabilization, Investment and Repurchase of the Public Debt (FEIREP), not its elimination, the President repeated.

The fund, created from petroleum revenues, will have to be modified to guarantee the development of national industry and social development, he concluded.