Diego Borja - Minister of Economy and Finance

Minister of Economy and Finance

Borja served as Minister of Economy and Finance of the Republic of Ecuador from December 28, 2005 to July 7, 2006. In that position he was named Governor of the Andean Development Corporation (CAF), the Inter-American Development Bank, the International Bank for Reconstruction and Development or World Bank, and the International Monetary Fund.

Under his leadership, a reform of the Hydrocarbons Law (Ley de Hidrocarburos) was enacted so the Ecuadorian state could recover 50% of the revenues produced by private oil companies. Before this action, some private oil companies were contributing as little as 18% of their revenues to the public sector while earning profits of as much as 250% per year on their investments.

During his tenure, the Minister of Energy and Mines, Iván Rodríguez, decreed the expiration (caducidad) of the contract with the Occidental Petroleum Co., which was producing 100,000 barrels per day. The expiration was due to repeated violations of the contract and the Hydrocarbons Law. Minister Diego Borja was appointed to a high-level Commission to oversee the transfer and operation of the oil fields that were previously operated by Occidental Petroleum and was instrumental in creating the administrative unit formed to operate these fields.

Other key accomplishments of his tenure were the repurchase of $740 million of high interest rate bonds (Ecuador Global 2012, paying 12% annual interest), as well as a reduction in the overall public external debt stock (both in absolute terms, and also as a percentage of GDP, which fell below the target of 30% of GDP). Inflation and unemployment also fell during this period, and a projected fiscal deficit of 0.8% of GDP was reverted to a fiscal surplus of 1.4% of GDP. Economic growth was also significant, both in the oil and non-oil sectors.

Borja organized the CEREPS oil fund, to establish priorities in public sector investment, directing these funds towards infrastructure investment, the oil and electric sectors, education, health and the environment.

When Borja denounced a change that had been made to the regulations of the Hydrocarbons Law in an attempt to benefit the foreign oil companies, the chief of staff, Jose Modesto Apolo, asked for his resignation. Subsequently Borja denounced Apolo's role in the change to the regulations, and Apolo also resigned his office.