2024-03-10 11:24:29
Although the budget of 127 public agencies is reduced by $822 million; 33 allocations are also increased by more than $3,663 million.
The tragedy of General State Budget (PGE) for 2024 is that, on the one hand, an effort is made to cut spending and on the other, allocations are increased to a much greater extent.
So, for every dollar of budget cuts in various agencies and institutions; spending on others increases by $4.57.
If the budget proforma for this year, sent by the Ministry of Economy on February 20 to the Assembly, is analyzed, It becomes evident that the optimizations that are made on the one hand are diluted in more expense on the other..
The PGE of the Government of Daniel Noboa, despite the announcements of austerity and a reduction of at least $1,000 million, presents a very different scenario.
Compared to the codified budget (expenditure actually accrued or executed) for 2023, the increase is more than $2,841 million.
Insufficient cuts
Specific, Budget cuts are recorded in 127 state agencies (including ministries, universities, agencies, among others). These add up to -$802.22 million compared to the budget executed in 2024.
At the beginning of January 2024, LA HORA already warned that, according to statements by the Minister of Economy, Juan Carlos Vega Malo, investments in current spending were going to be cut in almost all ministries.
“Everyone, unfortunately, is below the expectations and plans they had. The Minister of Public Works, for example, is actively looking for financing alternatives for new projects or looking at concession opportunities,” Vega Malo said at the time.
In the 2024 proforma, less budget is established, for an amount of -$238.92 million (30% of the total cut), in 15 of the 20 ministries of the Central Government.
Likewise, a cut of -$92.46 million in allocations to secretariats is determined. Of this total, 87.5% corresponds to the Secretariat of Risk Management (-$63.45 million) and the Secretariat of Higher Education, Science, Technology and Innovation (-$17.52 million)
In universities, there is a decrease of -$134.55 million in 23 institutions (16.77% of the total cut).
In many of the cases of cuts, such as those of universities, Risk Management and ministries and agencies linked to security, The Government hopes to offset the allocations when the VAT increase and temporary taxes come into force.
The Government constructed the proforma delivered to the Assembly without those additional millions because the regulations prohibit budgeting based on laws that are not yet in force..
The so-called Organic Law to Confront the Internal Armed Conflict, the Social and Economic Crisis may only be published in the Official Registry in March and begin to be applied from April 2024.
Increasing expenses
The proforma for 2024 establishes an increase of $3,663.32 million in the budgets of 33 public agencies and entities
Of that total, 63.24% or $2,316.79 million is concentrated in the increase in allocations in five ministries: Education, Health, Labor, Public Works and the Interior.
Another institution with a considerable increase is the National Service for Comprehensive Attention to Adults Deprived of Liberty and Adolescent Offenders (SNAI).
According to the budget prepared by the Government, the budget of the SNAI, which is the one that administers and manages the prisons, will grow from $122.71 million to $229 million
In addition, increases are also expected in investment spending and current transfers for sectors such as the IESS, for a total of $1,210 million.
But this will depend on whether the Government manages to raise all the internal and external financing it needs (more than $10,000 million) and partly also on the additional income from VAT and temporary taxes, tax remission and self-withholdings..
In the end, as Alberto Rocha, economist and business consultant, explains, expenses will grow even much more than what is initially budgeted because the additional income, and the little that can be cut, only creates space to allocate resources to other purposes.
“The exercise is to transfer dollars from one pocket to another within the same public sector. The spending needs, and even the arrears, mean that if it is not allocated to one sector it goes to another and in the end the effect is that the state budget is not reduced,” he concluded. (J.S.)
State agencies with the greatest budget cuts | ||||
| USD millions | ||||
| Entity | Coded Budget 2023 | Budget 2024 | Reduction | |
| Ministry of National Defense | 1.630,69 | 1.541,92 | -88,77 | |
| Risk Management Secretary | 82,29 | 18.83 | -63,45 | |
| National Electoral Council | 154,26 | 103,16 | -51,10 | |
| Strategic Intelligence Center | 69,79 | 21,65 | -48,15 | |
| Department of agriculture | 136,62 | 101,07 | -35,54 | |
| National Police | 1.460,45 | 1.433,56 | -26,89 | |
| Geographic Military Institute | 50,51 | 24,20 | -26,30 | |
| National Institute of Statistics and Censuses | 42,19 | 17,56 | -24,63 | |
| Note: Most of these agencies will increase their budgets with the 15% VAT and temporary taxes. | ||||
State agencies with the most budget increase | |||||
| USD million | |||||
| Entity | Coded Budget 2023 | Budget 2024 | Increase | ||
| Ministry of Education | 3.395,40 | 4.615,70 | 1.220,29 | ||
| Ministry of Public Health | 3.217,19 | 4.227,63 | 1.010,44 | ||
| Snai | 122,71 | 229,00 | 106,29 | ||
| Ministry of labor | 28,68 | 65,72 | 37,04 | ||
| Ministry of transportation and public works | 248,98 | 285,90 | 36,92 | ||
| National Assembly | 32,07 | 50,85 | 18,77 | ||
| Ministry of Interior | 78,54 | 90,62 | 12,08 | ||
| Amazon technical secretary | 167,83 | 17,27 | 4,95 | ||