VZCZCXYZ0007
RR RUEHWEB

DE RUEHQT #0223 0892154
ZNR UUUUU ZZH
R 302154Z MAR 09
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC 0217
INFO RUEHBO/AMEMBASSY BOGOTA 8075
RUEHCV/AMEMBASSY CARACAS 3483
RUEHLP/AMEMBASSY LA PAZ MAR LIMA 3134
RUEHGL/AMCONSUL GUAYAQUIL 4233

UNCLAS QUITO 000223 
 
SIPDIS 
STATE FOR EEB/IFD FOR JULIA JACOBY 
 
E.O. 12958: N/A 
TAGS: EAID EFIN ECON PREL EC
SUBJECT:  ECUADOR FISCAL TRANSPARENCY REPORT 2009 
 
REF: State 28885 
 
¶1.  The Government of Ecuador is a recipient of U.S. assistance 
monies under the FY2009 Foreign Operations Appropriations Act.  The 
following is a narrative on fiscal transparency in Ecuador, as 
requested in reftel. 
 
¶2.  The Government of Ecuador publishes budget data, which is 
reasonably transparent and reliable.  After the annual budget is 
approved by the legislature, the Administration has considerable 
discretionary authority over actual expenditures.  In recent years, 
tax revenues and petroleum income have exceeded that projected in 
the budget, as have expenditures.  The Government of Ecuador 
publishes both the approved budget and actual revenues and 
expenditures. 
 
¶3.  Ecuador adopted a new constitution in October 2008, and is 
operating under an interim legislative assembly until a new National 
Assembly is elected.  The President, Assembly representatives and 
other elected positions will be elected on April 26.  The new 
administration is required to present the 2009 budget to the 
Assembly 90 days after taking office.  In the interim, the 
government is operating on an extension of the approved 2008 budget. 
 The new constitution also establishes that the administration 
provide the Assembly with a report on budget implementation twice a 
year. 
 
¶4.  The Ministry of Finance publishes budget data on a regular basis 
on the internet.  The Central Bank also publishes aggregate budget 
data.  Revenues and expenditures are included in the 
publicly-available information, although data are often aggregated 
at a fairly broad level.  Data at the sub-account and line item 
level are not published as regularly, but can be obtained upon 
request.  Given these limitations to the published data, a 
non-governmental organization also publishes monthly reports to 
clarify budget numbers. 
 
¶5.  In 2008 the Government of Ecuador changed some budget procedures 
to bring the petroleum reserve funds on budget, reduce earmarking, 
and establish a unified account for the federal budget.  The 
Administration has also stated that it would bring under the budget 
a subsidy program for gasoline and other petroleum derivatives, 
which has been funded indirectly through the parastatal petroleum 
company.  These changes should simplify the complex budgetary 
process and promote transparency. 
 
¶6.  In 2002-2007, USAID provided the Ministry of Finance technical 
assistance to enhance fiscal transparency and improve reporting of 
fiscal revenues and expenditures.  The Ministry of Finance 
implemented a new information system program provided by the World 
Bank, which should improve financial management effectiveness and 
transparency and contribute to better government financial 
reporting. 
 
¶7.  In 2003, Ecuador volunteered to the IMF to report on the 
country's compliance with standards and codes covering fiscal 
transparency.  Ecuador does not currently have a borrowing program 
with the IMF, but does participate in periodic IMF reviews. 
 
HODGES