Daniel Noboa, Ecuador's president
Ecuador's new President Daniel Noboa delivers his first speech after taking office. AFP

President Daniel Noboa's administration in Ecuador is aiming to bolster security measures by allocating an additional $214 million in funding for 2024. The proposed increase in spending comes as the government intensifies efforts to combat rising violence associated with drug trafficking gangs by deploying military forces in hotspot areas.

Noboa labeled these gangs as terror groups last month after the country witnessed a surge in violence, including incidents when dozens of prison guards were taken hostage and gunmen invaded a TV station during a live broadcast.

The economy ministry said that as per the budget proposal, security spending would reach $3.52 billion in 2024 from $3.3 billion last year, Reuters reported on Wednesday.

Economy Minister Juan Carlos Vega said that the government will also add 15% VAT (Value Added Tax) from April onwards. "We are going to start with VAT at 15% to actively sustain the successful campaign to fight security issues," he said.

The budget sums up to $35.5 billion in total, including $4.8 billion for fiscal deficit.

Noboa took over the office in November last year and so far, he has maintained good relations with the lawmakers, who are responsible for approving the budget. Initially, his attempt to add 15% VAT to fund security was rejected, but he managed to implement 13% permanent VAT, which could lead to 15% when required.

While the country will be putting $4.8 billion toward paying debt in 2024, $11 billion will be required for financing - partially taken care of with debt from multilateral lenders.

Ecuador has not requested the International Monetary Fund for any financial help yet, as per Vice Minister of Economy Daniel Falconi. According to the budget proposed this year, the country is projected to see an economic growth of 0.8%.

Ecuador has witnessed a surge in violence and crime in the last couple of years. According to a report, the country's crime rate was 5.84% in 2017, which rose to 6.84% in 2018. It doubled in 2020 to 14.02%.

Last month, Jose Adolfo Macias, the leader of Ecuadorian drug cartel Los Choneros, was reported missing from the prison, as per the authorities.

This incident took place just a few days after Noboa announced he had submitted a list of draft questions for the referendum in a letter to the Constitutional Court to impose tighter security measures in the country.

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