That amount is more than seven times what the State has as official reserves.
The Dollarization Observatory warned that wealthy families and Ecuadorian private business groups have USD $ 27.6 billion invested abroad as of March 2020, according to figures from the Central Bank of Ecuador (ECB)
According to statistics: households and companies have $ 21.2 billion abroad and banks have $ 6.4 billion.
“The lack of control over capital outflows has led to the privatization of reserves,” says the observatory.
They point out that this amount is more than seven times what the State has as official reserves, which are USD $ 3,393 billion.
The Observatory realizes that, additionally, the private sector has USD $ 18.7 billion in “circulating reserves”, which are US notes and coins within the country.
“If we used exclusively electronic means of payment for internal transactions, the official and bank reserves would be much higher,” they explain.
Lastly, they make several recommendations to avoid this outflow of capital, such as increasing the domestic liquidity ratio, multiplying the tax on assets abroad and arranging for the repatriation of part of the offshore wealth of Ecuadorian companies.
“As Tax Justice Network has documented, the majority of this Ecuadorian wealth is in the United States and Panama,” says the organization.
Source: Dollarization Observatory
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