The effect of the closure of ITT will also be seen on unemployment. economy | news

The closure of Block 43 – ITT (Ishpingo, Tambococha, Tiputini) after popular consultation will not only impact the general budget of the state, but also the work that 915 employees are generating directly from contracting companies from these areas . – and indirectly, which are many more.

Economy and Finance Minister Pablo Arosemena cited as an example that about 400 people work in a drill. A Central Bank report projected an increase in the unemployment rate to 0.4% by 2025, or more than 30,000 unemployed per year, due to a decrease in oil production and exports; While the workers have highlighted that the oil activity boosts the economy of the communities and some operations earn them around $150,000.

Constitutional lawyers say in national consultation on Yasuní, Orellana’s local popular will has no legal effect

The cessation of crude oil exploitation in the region, located in the province of Orellana, would result from a popular consultation, in which 58.97% of voters voted to stop the extraction of oil and 41.03% supported its continuation.

Operations at the block began in July 2016 at the Tiputini field, then in March 2018 at Tambocha and in April 2022 at Ishpingo.

The energy minister says that the government will analyze and study for the return of Yasuni, but the execution will be in line with whoever wins the second round.

A Petroecuador report provided by the Ministry of Energy and Mines states that “a monthly average of 915 direct jobs is registered in ITT, of which 71% are from local workers and communities in the region. This will result in 915 direct jobs over the next five years. ” This figure corresponds only to workers of contractor companies.

Similarly, it indicates that “contractor workers and their families receive, on average, approximately $675,691 per month, estimated after approximately eight years” for the work they are doing (after the start of construction of Block 43 ITT). Se) represents an estimated $64.8 million salary income.

Economy Minister during a radio interaction foreverHe cited as an example that 400 people work at one drill and there are dozens of drills, and now with the results of the consultation they will no longer be there, so he wondered what would happen to the jobs there. “Is Leonardo DiCaprio going to come and is Mark Ruffalo going to give jobs to the people who are out of work because they stopped extracting oil in an environmentally responsible way? I think that’s a question To which the new ruler will have to answer.

Economy Minister: Are Leonardo DiCaprio, Mark Ruffalo going to come here to give jobs to the people who lose their jobs because they stop extracting oil responsibly?

The Central Bank report states that “the reduction in oil production and exports, the reduction in public investment and its impact on economic growth will also affect Ecuador’s labor market.”

In this context, it presents the projected increase in unemployment for the period 2023–2025, which was obtained “assuming that labor productivity remains constant”; This hypothesis is necessary to achieve new levels of employment in the event of a deficit in GDP. In this sense, it is important to mention that, in the medium term, there may be aftershocks Productivity is not being considered in the proposed scenario.

By 2023, an increase of 30,693 unemployed people is expected as compared to April 2023. “Because of the non-exploitation of Block 43-ITT in the proposed scenario, no proactive policy is considered to counteract the effects of loss of jobs in the medium term.” higher, as the expected level of GDP by 2025 is much lower than April’s results”, study on macroeconomic implications of keeping crude oil from Block 43-ITT underground indefinitely indicated Central Bank this August.

Thus, the number of unemployed is expected to increase by 0.4% in 2023 to 30,693, for 2024 the figure is 31,688 unemployed (0.4%) and for 2025 it is 44,717 unemployed (0.5%).

For the calculation, they used population projections by the National Institute of Statistics and Census (INEC) and assumed that the global labor market participation rate is constant for the period 2023–2025.

Oil activity also boosts the local economy, according to what workers said when Petroecuador conducted a tour of the area last June. Thus, for example, those who operate boats ferrying employees of the state company and oil companies from Coca to Block 43, commented that this operation brings in an income of about $150,000, which Boca Tiputini There are resources according to the chairman of the community. Marco Greffa, among other things, use them to help people with Mingas and when they get sick.

there is also an association food and drink which provides food service to the oil company and employs 34 employees.

ITT activates river transport, ‘catering’ and cleaning in communities ‘outraged’ by popular consultation

According to Petroecuador, more than 50 local companies are present with transportation services, hardware, supplies, including construction of three-phase fluid separators (water, gas and oil).

Likewise, it indicated that it is the only company that operates in the Yasuní region and that its activity directly benefits seven communities: the Waorani of the Kawimeno and Kichwas: Cinchi Chicta, San Vicente, Puerto Quinche, Lanchama, Boca Tiputini and Puerto Miranda. (yo)