Lasso oil plans will stoke tensions in Ecuador

Significance

He aims to increase incentives for private firms and foreign state-owned enterprises to operate in Ecuador, while reducing the role of national oil company Petroecuador. The reforms, if implemented, may have their intended effect on oil production but they will stoke political tensions and will be challenged by indigenous and environmental movements.

Impacts

• Plans to boost oil production will reassure international investors about the government’s ability to service foreign debt obligations.
• Global campaigns against funding oil investment might limit international investment in the oil sector to some degree.
• Increased oil production and exports will alleviate balance of payments constraints on economic growth.