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Cablegate: Ecuador Econ Weekly: Rice Export Ban; National Development

VZCZCXYZ0000
OO RUEHWEB

DE RUEHQT #2095 2561249
ZNR UUUUU ZZH
O 131249Z SEP 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7724
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6902
RUEHCV/AMEMBASSY CARACAS PRIORITY 2675
RUEHLP/AMEMBASSY LA PAZ SEP 0710
RUEHPE/AMEMBASSY LIMA PRIORITY 1932
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 2795
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS QUITO 002095

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR MMALLOY AND MEWENS

E.O. 12958: N/A
TAGS: ECON ETRD EINV EC
SUBJECT: ECUADOR ECON WEEKLY: RICE EXPORT BAN; NATIONAL DEVELOPMENT
PLAN; LPG FOR CARS

Ref. Quito 1794

1. (U) The following is a weekly economic update for Ecuador that
reports notable developments that are not reported by individual
cables.

GOE Bans Rice Exports
---------------------

2. (U) On September 7 the GOE banned rice exports after local rice
prices rose quickly as a result of strong demand from Colombia and
Peru. According to media reports, the price of rice fell in Ecuador
following the export ban, but some rice is probably being smuggled
out of the country. The government has been particularly sensitive
about price increases for basic foods in the run-up to the September
30 Constituent Assembly and has attempted to limit the price
increases of other foodstuffs through voluntary price controls
(reftel) and subsidies (septel) and export bans.

National Development Plan Unveiled
----------------------------------
2. (U) The Cabinet approved the $4.5 billion National Development
Plan for 2007-2010 presented by the National Secretariat of Planning
and Development (SENPLADES) September 6. The plan has 12 human
development objectives, including poverty reduction, improving
access to education, increasing life expectancy, and improving
competitiveness, among others. Fander Falconi, Secretary of
Planning, projects that the plan will create 120,000 jobs, increase
GPD growth by 1.5%, and reduce urban poverty by 8%. According to
SENPLADES, the plan would be financed by private investment and
public funds such as the FEISEH petroleum fund.

Congress Approves the Use of LPG for Vehicles
---------------------------------------------

3. (SBU) Congress approved an Administration proposal for the use
of liquefied petroleum gas (LPG) for "authorized automobiles"
September 7, as part of its final approval of the Energy Sovereignty
Law (which seeks to stem trafficking in petroleum products). With
the legislative permission in hand, the Correa administration seems
to moving relatively quickly to implement an LPG-for-taxis program.
Taxi drivers have been pushing for permission to utilize LPG, which
is highly subsidized and cheaper than regular gasoline (which is
also subsidized, but to a lesser degree), since the beginning of the
year. The plan will likely add to the GOE's already high energy
subsidy bill, although LPG for taxis might receive a smaller subsidy
than LPG for home use.

JEWEL

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