Second Fiscal Consolidation and Competitiveness Growth SAL

The FCCGL II provides continued Bank support to the Government of Ecuador's (GOE's) multi-year program of reforms. The medium-term objectives of the FCCGL-II are consolidating the Non-Financial Public Sector (NFPS) fiscal position, reducing the country?s debt, upgrading creditworthiness, improving competitiveness, and enabling high growth for poverty reduction. The second phase is justified by reaching benchmarks and further actions agreed with the Bank in the first operation. The FCCGL-II preserves two pillars of structural reform: (a) fiscal consolidation with debt sustainability, and (b) higher economic growth with improved competitiveness and enhanced markets flexibility. Specific objectives are to: (a) support a non-discretionary fiscal policy and improve tax administration; (b) reverse expansionary spending and improve budget transparency; (c) strengthen control of the public payroll; (d) improve public debt management and promote a simple and transparent management of the oil revenue fund FEIREP; (e) support trade reform; (f) promote competitive pricing and regulatory policies; and (g) increase labor flexibility. These objectives are complemented by a parallel programmatic operation for the social sectors and by an investment operation on institutional reform.