Saturday, June 18th 2005 - 21:00 UTC

Ecuador redistributes oil income

Ecuador's Congress will give preference to social programs over lowering national debt. The country's Congress voted 64-1 to amend the law regulating the so-called Stabilization, Productive and Social Investment and Public Debt Reduction Fund, FEIREP, which feeds on revenue from the country's rich oil exports.

Comment

The fund originally had 70% earmarked for reduction of the government's domestic and foreign debt.

Another 20% went to a stabilization fund for the oil industry in the event of natural disasters or volatile prices in the international crude market and 10% for health and education.

Changes enacted by Congress allocate 35% to industry development and servicing the country's Social Security debt plus foreign debt reduction.

Education and Health's shares jump to 15% each with 5% going to recover environmental damage from the oil industry. Another 5% will go to improve the roads system, 5% to boost science and technology and 20% for the oil income stabilizing fund.

According to official estimates, the fund should accumulate over 920 million US dollars by the end of the year.