Ecuador Defaults on Foreign Debt Payment for January
Feb. 18, 1987
QUITO, Ecuador (AP) _ The government has disclosed it failed to make the interest payment on Ecuador's $8.1 billion foreign debt last month because of the country's serious economic problems.
''The suspension of the last scheduled payment of the foreign debt service was not due to any premeditated strategy, but to a real impossibility of meeting the obligations as a result of the critical situation of the country since last year because of the abrupt drop in oil prices,'' Economic Planning Secretary Oswaldo Davila said late Tuesday.
Until the drop in world petroleum prices, nearly 70 percent of Ecuador's export earnings were provided by oil.
It was the first public admission by a government official that Ecuador didn't make the scheduled payment in January of interest on its foreign debt. The amount of the payment was not disclosed, but officials have said Ecuador is scheduled to pay about $1.3 billion in interest and principle this year.
Opposition leaders sharply criticized the government Wednesday for the default.
''This is the first time that the Ecuadorean government has unilaterally not made the payment on the foreign debt,'' said former President Osvaldo Hurtado, leader of the center-left Christian Democrat Party and a bitter foe of the Conservative President Leon Febres Cordero.
Until world oil prices collapsed at the beginning of 1986, Ecuador had been viewed by international bankers as a bright spot in Latin America's gloomy debt picture - an oil-exporting country run by a pro-business government that paid its bills on time.
But the government has warned for months that it might not be able to maintain that record of meeting debt payments unless it renegotiates the payment schedule on more favorable terms.
Central bank general manager Carlos Julio Emanuel and other members of the country's debt renenegotiation team returned from New York Friday after trying to reach an agreement with creditor banks on rescheduling payments.
Team members flew immediately to the Galapagos Islands to continue analyzing the situation and haven't been available to discuss their meeting.
Meanwhile, former central bank general manager Rodrigo Espinoza said the decision not to pay the interest due in January appeared to be a tactic to pressure creditors into granting the country more favorable repayment terms.